Banks Strengthen Capital as IMF Exit Nears
By Praisebell Rosemond Larbi
Ghana’s banking industry is moving proactively to reinforce capital buffers ahead of what analysts describe as a potentially tighter liquidity environment from 2027, when the country begins a new cycle of substantial external debt repayments. Although banks have spent the last two years rebuilding balance sheets after the Domestic Debt Exchange Program (DDEP), the sector is now preparing for fresh macro-fiscal strain as the IMF-supported program winds down in 2026 and the government faces renewed financing pressures.
Industry watchers say lenders are repositioning their portfolios, tightening risk controls, and shifting toward more diversified income sources in anticipation of reduced fiscal space. “Banks are not waiting for shocks to hit before adjusting. The external repayment schedule from 2027 is significant, and institutions know liquidity conditions will tighten,” a senior treasury analyst said.
Ghana will be required to service external debts estimated at about USD 2.5 billion in 2027 and USD 2.4 billion in 2028, raising concerns about government borrowing patterns, interest rate movements, and liquidity conditions in the domestic market. Although the IMF program has helped stabilise inflation, improve reserves and restore some investor confidence, the post-program horizon presents uncertainties. For banks, this means strengthening capital adequacy, limiting concentration risks and improving operational efficiency well ahead of time.
Data available to the media indicate that banks have begun rebalancing their asset mix, reducing exposure to government securities and increasing allocation to private-sector credit and trade-related instruments. This shift reflects both regulatory pressure and internal assessment of sovereign risk following the DDEP.
At the same time, lenders are expanding non-interest income streams. Fee-based activities, including payments, trade finance, remittances and digital banking services are becoming more central to revenue strategies. Several banks are also developing diaspora-focused products and scaling up regional settlement services under the African Continental Free Trade Area (AfCFTA), with the goal of positioning Ghana as a competitive financial hub for West Africa.
Despite these strategic shifts, the sector continues to show broad improvement in fundamentals. Total assets increased 33.8% to GH¢367.8 billion in 2024, supported by higher deposits, improved capitalization and a gradual pick-up in private-sector lending. Deposits, which remain the main source of funding for banks, grew 28.8% to GH¢276.2 billion, reflecting stronger customer confidence and continued expansion in digital onboarding channels.
Profitability, however, presents a more mixed picture. Return on Assets (ROA) stayed above the 5% threshold for much of 2024 but dipped to 4.81% in November before recovering to 5.04% in December. Return on Equity (ROE) also moderated to 30.8%, down from 34.2% the previous year. Analysts attribute this to more cautious balance-sheet management, higher impairment provisioning, and slower credit expansion, factors that reflect prudent risk controls rather than weakening operational performance.
A senior banking consultant notes that the slightly lower profitability numbers “signal the industry’s deliberate effort to consolidate the balance sheet and manage exposures conservatively.” He added that banks are taking lessons from the post-DDEP environment and prioritizing resilience over aggressive growth.
Looking ahead, the sector is expected to continue improving capital adequacy and stress-testing frameworks as Ghana approaches the expiration of the IMF program. While macroeconomic indicators have broadly improved, banks recognise that the upcoming external repayment cycle could affect liquidity, domestic interest rates, and government financing conditions.
“2027 is not far away. The banks that prepare early will be the ones best positioned to navigate the next phase,” the consultant said.
