Ghana’s banking sector is expected to see significant improvements in the coming years as the country recovers from its debt crisis and its business environment strengthens, according to Fitch Ratings.

In its latest report, Fitch noted that Ghanaian banks have posted strong profits in 2023 and 2024, largely driven by high yields on treasury bills. These profits have played a crucial role in rebuilding banks’ capital bases, which were significantly impacted by losses from the Domestic Debt Exchange Programme (DDEP) in late 2022.

Although some of the effects of these losses were masked by accounting practices, Fitch anticipates that sustained profitability will allow banks to restore their capital buffers by 2025. This recovery is expected to help banks meet regulatory capital requirements once temporary relief measures expire.

The DDEP concluded in 2023, and Fitch expects Ghana to complete its external debt restructuring by early 2025. A key Eurobond exchange in October 2024 has improved the country’s access to international financing and eased pressure on the cedi, leading Fitch to upgrade Ghana’s credit rating.

Looking ahead to 2025, Fitch forecasts a more stable economic environment, with stronger GDP growth, lower inflation, and a stabilised exchange rate. These factors are expected to reduce risks in the banking sector, setting the stage for continued growth and resilience in Ghana’s financial institutions.

Source:TheDotNews