Ghanaian Banks to Benefit from DDEP Closure – Fitch
By Praisebell Rosemond Larbi
Ghana’s banking sector is expected to benefit from the closure of the Domestic Debt Exchange Programme (DDEP) and the gradual restoration of capital buffers, although elevated non-performing loans (NPLs) will continue to weigh on profitability, according to Fitch Solutions.
In its latest report titled “Sub-Saharan Africa Banking Key Themes for 2026: Banks Navigate Easing Cycles and Consolidation Trends”, the UK-based research firm said Ghanaian banks are entering 2026 on a firmer footing following the conclusion of the DDEP, which had severely strained balance sheets and eroded capital positions across the sector.
Fitch noted that the end of the debt restructuring programme removes a major source of uncertainty for banks and should support improved investor confidence, balance sheet repair and a gradual return to more normalised banking operations.
However, the firm cautioned that high asset quality risks remain a key constraint, with Ghana’s non-performing loan ratio standing at 9.5 percent as of October 2025. This, it said, will continue to pressure earnings through higher provisioning costs and limit banks’ ability to fully capitalise on the improving macroeconomic environment.
Despite these challenges, Fitch Solutions expects a more accommodative monetary policy stance across Sub-Saharan Africa, including Ghana, to support stronger credit growth in 2026.
“We forecast loan growth will accelerate across SSA’s largest banking sectors, and the region will experience the strongest growth rate by year-end,” the report said.
According to Fitch, the expected acceleration in lending reflects pent-up demand for credit, improving economic growth prospects and a gradual reduction in government crowding-out of the private sector as fiscal consolidation efforts intensify and sovereigns seek alternative financing options.
In recent years, banks across Sub-Saharan Africa, including Ghana, significantly increased their exposure to government securities, attracted by high yields during periods of tight monetary policy. Fitch estimates that in some markets, government securities now account for 20 to 35 percent of bank assets, up sharply from 10 to 15 percent before the COVID-19 pandemic.
As policy rates decline and yields on government securities compress, Fitch warned that banks will face increasing pressure to reallocate capital toward private-sector lending in order to sustain returns.
“This transition will be positive for businesses and the wider economy as more credit becomes available to support growth initiatives,” the firm said, adding that the shift will be more pronounced in countries pursuing fiscal consolidation and reducing domestic borrowing needs.
Fitch also highlighted a broader regional trend toward monetary easing. Since February 2025, central banks across the largest Sub-Saharan African economies have either cut policy rates or paused after earlier reductions, and the firm expects this easing cycle to continue through 2026.
For Ghanaian banks, the combination of lower interest rates, reduced sovereign risk following the DDEP, and improving macroeconomic stability presents opportunities for balance sheet expansion and renewed private-sector lending. However, Fitch stressed that managing credit risk and reducing NPLs will be critical if banks are to translate these gains into sustained profitability.
The outlook suggests a cautiously improving operating environment for Ghana’s banking sector, with recovery prospects increasingly dependent on asset quality management, prudent risk-taking and the pace of economic recovery in 2026.
