Credit to Public Sector Contracts Declined to GH¢4.8bn in 2025 – BoG
Credit extended to the public sector declined sharply in 2025, falling by 25.5 percent to GH¢4.8 billion, according to the latest Monetary Policy Report released by the Bank of Ghana.
The development reflects a slowdown in government borrowing from the domestic banking system during the year under review, as authorities continued efforts to stabilise the economy following fiscal consolidation measures.
Data contained in the central bank’s January 2026 Monetary Policy Report showed that while lending to the public sector declined significantly, private sector credit expanded, signalling a gradual rebalancing of credit allocation within the financial system.
Credit to the private sectorwhich includes loans to businesses and households, grew by 19.2 percent to GH¢106.2 billion in December 2025. This compares with a stronger growth rate of 26.3 percent recorded in 2024.
However, despite the nominal increase, the report noted that real private sector credit growth weakened in 2025, reflecting the impact of inflation and tight monetary conditions on lending activity.
Growth in Gross Loans Moderates
Overall credit conditions in the banking sector remained positive, though the pace of growth slowed compared with the previous year.
The stock of gross loans and advances in the banking industry increased by 16.2 percent to GH¢111.0 billion in December 2025, compared with a stronger 24.1 percent growth recorded in December 2024.
Analysts say the moderation in credit growth reflects cautious lending by banks as they continue to strengthen balance sheets following the financial sector adjustments linked to the Domestic Debt Exchange Programme.
Services Sector Dominates Credit Allocation
In terms of sectoral distribution, the services sector remained the largest recipient of bank credit, accounting for 37.1 percent of total industry lending at the end of December 2025. This represents a significant increase from 31.7 percent recorded in December 2024.
The commerce and finance sector ranked second, receiving 24.3 percent of total credit, although its share declined from 27.0 percent the previous year.
Meanwhile, the manufacturing sector recorded a marginal increase in its share of bank lending, rising slightly to 10.7 percent in December 2025, up from 10.5 percent in December 2024.
Together, the services, commerce and finance, and manufacturing sectors accounted for 72.1 percent of total credit within the banking system in 2025, compared with 69.3 percent recorded a year earlier.
Utilities Sector Receives Least Credit
The electricity, water and gas sector received the smallest share of credit within the banking industry.
According to the report, the sector accounted for just 3.0 percent of total credit in December 2025, down from 4.1 percent recorded in 2024.
Financial analysts say the continued dominance of the services sector in credit allocation reflects the structure of Ghana’s economy, where service-based activities such as trade, telecommunications and financial services remain major drivers of economic activity.
The data from the central bank suggests that while government borrowing from the banking sector has slowed, banks are gradually redirecting lending toward private sector activities expected to support economic growth and job creation.
