BoG Targets 10% NPL Ratio by 2026
By Praisebell Rosemond Larbi
The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has announced that the central bank is pursuing an aggressive strategy to reduce the banking sector’s Non-Performing Loan (NPL) ratio to 10 per cent by the end of 2026, as part of broader efforts to strengthen asset quality and safeguard financial stability.
The current NPL ratio stands at 19.5 per cent as of October 2025, underscoring lingering credit risks within the sector despite recent improvements in macroeconomic conditions. Dr. Asiama said the reduction target reflects the BoG’s determination to ensure that banks remain resilient and well-positioned to support economic recovery as interest rates begin to ease.
He made the disclosure in a speech delivered at the Governor’s Day Annual Bankers’ Dinner, organised by the Chartered Institute of Bankers, where he outlined the central bank’s priorities for the period ahead. According to him, the improving macroeconomic environment provides an opportunity for banks to undertake intelligent and well-structured loan restructuring, without weakening prudential standards or undermining financial discipline.
“As we turn toward 2026, the central question is no longer whether stability can be restored. The question is how that stability is used,” Dr. Asiama stated. He added that if 2025 marked the rebuilding of confidence, then 2026 must focus on putting that confidence to productive use in support of a stronger and more competitive Ghanaian economy.
Beyond asset quality, the Governor urged commercial banks to deepen their support for Ghana’s export-led growth agenda as the country prepares for the next phase of economic expansion. He called for stronger export finance desks, enhanced support for agro-processing and non-traditional exports, and more deliberate engagement with opportunities under the African Continental Free Trade Area (AfCFTA).
Dr. Asiama stressed that banks must play an active role in financing export-oriented enterprises, managing trade-related risks, and helping firms transition from domestic markets to regional and global value chains. He encouraged banks to design export-ready loan products, build sector-specific expertise, invest in digital trade platforms, and deploy risk-sharing and hedging instruments to support exporters throughout the trade cycle.
Reflecting on developments in 2025, the Governor described the year as one defined by difficult but necessary decisions aimed at restoring confidence and discipline. He noted that inflation, which exceeded 23 per cent at the beginning of the year, declined steadily into single digits by November, while the cedi appreciated cumulatively by more than 20 per cent, signalling a return of order to the market.
Dr. Asiama said the disinflationary trend enabled the Monetary Policy Committee to cut the policy rate by a cumulative 1,000 basis points during the year, an outcome he said would not have been credible without sustained policy discipline. He added that reforms also strengthened the banking sector, reducing the number of undercapitalised banks from eleven at the end of 2024 to five by November 2025.
Looking ahead, the Governor disclosed that the BoG is laying the groundwork for long-term financial sector growth, including progress in modernising the payments ecosystem through the National Payment Systems Strategy for 2025–2029, which focuses on interoperability, cybersecurity, instant payments and infrastructure modernisation.
