Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, says decisive monetary tightening, market discipline and far-reaching banking sector reforms implemented in 2025 have helped stabilise the economy, restore investor confidence and return inflation to single-digit levels.
Speaking at the 2025 Governor’s Day Annual Bankers’ Dinner organised by the Chartered Institute of Bankers, Ghana, in Accra, Dr Johnson Pandit Asiama said the overriding challenge, when he assumed office earlier in the year, was not a lack of policy tools, but a deep erosion of confidence in policy signals, coordination and consistency.
He noted that market behaviour at the time reflected uncertainty rather than conviction, weakening the effectiveness of even well-intended policy actions. As a result, he said the central bank’s first task was to re-establish monetary and market discipline.
Dr Johnson Asiama said early decisions by the Monetary Policy Committee (MPC) were deliberately firm, pointing to the 100-basis-point increase in the policy rate in the March meeting as a clear signal of the Bank’s commitment to disinflation and the anchoring of inflation expectations.
He stressed that the move was not intended to project toughness, but to restore credibility. This, he said, was reinforced by governance reforms within the MPC, including the adoption of transparent majority voting and the publication of individual votes to strengthen accountability and public confidence in monetary policymaking.
The Governor said operational reforms followed swiftly. In June, the dynamic cash reserve requirement was recalibrated to align domestic currency deposits with cedi reserves and foreign currency deposits with foreign currency reserves, correcting structural liquidity mismatches within the banking system.
In September, the policy rate corridor was widened from 100 basis points to 200 basis points to improve short-term liquidity management and sharpen policy transmission. Net open position limits were further tightened in October, removing allowances for net long foreign-currency positions and reducing speculative exposures on bank balance sheets.
Open Market Operations were also re-engineered, with the introduction of longer-tenor sterilisation instruments and the eventual return of the 14-day bill as the main instrument, restoring clarity to short-term rate.
According to Dr Asiama, the impact of these measures was swift. Inflation, which stood above 23 per cent at the beginning of the year, declined steadily into single digits by November, reaching levels last recorded in 2019. Over the same period, the cedi appreciated cumulatively by more than 20 per cent, reflecting what he described as a return of order rather than speculation in the foreign exchange market.
On the back of sustained disinflation, the MPC was able to reduce the policy rate by a cumulative 1,000 basis points over the year, a sequence the Governor said would not have been credible without the earlier phase of firm discipline.
He said market confidence also improved significantly, with issuance becoming more structured and trading volumes on the Ghana Fixed Income Market more than doubling by October compared to the previous year.
Beyond macroeconomic stability, Dr Johnson Asiama said 2025 also focused on strengthening the resilience and integrity of the banking system, which entered the year still affected by the Domestic Debt Exchange Programme.
The Bank of Ghana Governor revealed that while eleven banks recorded capital adequacy ratios below the prudential threshold at the end of 2024, that number had fallen to five by November 2025 due to recapitalisation efforts, supervisory engagement and improving macroeconomic conditions. He stressed, however, that remaining capital gaps must be closed and buffers rebuilt.
Asset quality, he said, was treated as a systemic risk rather than a background statistic.
Banks have been given clear timelines to reduce non-performing loan ratios toward the prudential benchmark of 10 per cent by the end of 2026, with loan restructuring encouraged where appropriate as interest rates decline.
Governance standards were also tightened, with boards reminded that oversight responsibilities must go beyond symbolism. Local governance in foreign-owned banks was strengthened, alongside clearer expectations on outsourcing, data protection and operational resilience.
At the system level, the Governor said macro-prudential supervision had shifted from diagnostics to prevention, with enhanced stress testing, forward-looking assessments and capital planning aligned toward Basel III standards to ensure the system can absorb shocks without transmitting them.
Dr Johnson Asiama announced significant reforms in the microfinance and specialised deposit-taking institutions sector, including the adoption of a comprehensive Microfinance Sector Reform Strategy aimed at resolving structural weaknesses and rebuilding public confidence.
The reforms introduce a new institutional architecture covering microfinance banks, community banks, credit unions and last-mile providers, while restructuring the ARB Apex Bank as a strategic policy instrument for the sector.
He said financial integrity remained a priority as Ghana undergoes its third Financial Action Task Force mutual evaluation, stressing that compliance must move beyond paperwork to effective risk identification, timely reporting and decisive enforcement across banks, SDIs and forex bureaux.
Looking ahead to 2026, Dr Johnson Asiama said the focus would shift from restoring stability to putting that stability to work, with sharper supervisory attention on credit quality, governance, underwriting discipline and export financing.
He called on banks to play a more active role in supporting Ghana’s export agenda, particularly in agro-processing, non-traditional exports and AfCFTA-related trade, stressing that strengthening export finance would expand the country’s foreign exchange base and deepen financial system resilience.
“If 2025 was the year confidence was rebuilt, then 2026 must be the year that confidence is put to work – carefully, productively and with judgment in service of a stronger, more competitive Ghanaian economy,” the Governor said.
For more news, join The Chronicle Newspaper channel on WhatsApp: https://whatsapp.com/channel/0029VbBSs55E50UqNPvSOm2z
