Ghana’s banking sector is poised for gradual recovery following the conclusion of the Domestic Debt Exchange Programme (DDEP) and the rebuilding of capital buffers, according to Fitch Solutions. However, the ratings and research firm cautions that high levels of non-performing loans (NPLs) could continue to weigh on bank profitability in the short term.
In its latest report, “Sub-Saharan Africa Banking Key Themes for 2026: Banks Navigate Easing Cycles and Consolidation Trends,” Fitch Solutions noted that Ghanaian banks are beginning to stabilise after the impact of the debt restructuring. Improved capital positions are expected to strengthen resilience across the sector, even as asset quality challenges persist. As of October 2025, NPLs in Ghana stood at a relatively elevated 9.5 percent.
The firm highlighted that monetary policy across sub-Saharan Africa is entering a more accommodative phase, which is expected to support stronger loan growth in 2026. According to Fitch Solutions, banks across the region are likely to experience faster credit expansion, driven by improving macroeconomic conditions, easing inflationary pressures and renewed demand for loans.
“We forecast that loan growth will accelerate across the region’s largest banking markets, with sub-Saharan Africa recording its strongest growth by the end of 2026,” the report stated. This, it explained, reflects pent-up demand, brighter economic prospects and a gradual reduction in government borrowing as fiscal consolidation efforts intensify.
Fitch Solutions observed that in recent years, Ghanaian banks like many across the region have significantly increased their exposure to government securities, attracted by high yields. In several sub-Saharan African markets, government instruments now account for between 20 and 35 percent of total banking assets, compared with just 10 to 15 percent before the COVID-19 pandemic.
However, as policy rates decline and returns on government securities soften, banks will face growing pressure to redirect capital toward private-sector lending in order to maintain profitability.
The firm described this shift as positive for businesses and the wider economy, as increased access to credit would help support investment, expansion and job creation. It added that the transition is likely to be more pronounced in countries like Ghana that are pursuing fiscal consolidation and reducing their reliance on domestic borrowing.
Fitch Solutions also pointed out that the monetary policy environment across major sub-Saharan African economies has clearly turned toward easing. Since February 2025, central banks in the region’s largest markets have either cut interest rates or paused after earlier reductions a trend expected to continue into 2026.
While these conditions should support credit growth and economic activity, Fitch Solutions warned that persistently high NPL levels, particularly in Ghana, may continue to limit banks’ risk appetite and constrain profitability in the near term.
