Ghana’s financial sector wrapped up 2024 on a strong footing, with total assets soaring to GH₵525.59 billion, marking a substantial 34.6% increase from GH₵390.17 billion recorded in 2023.

This robust growth, revealed in the 2024 Financial Stability Review, underscores the resilience and expansion of the sector despite a challenging macroeconomic environment.

While the sector’s absolute growth was impressive, its relative size compared to the broader economy saw a modest dip. Financial sector assets accounted for 45.2% of Ghana’s Gross Domestic Product (GDP) in 2024, slightly lower than the 46.4% share recorded in the previous year.

Banks Remain the Powerhouse of the Sector

The report confirms that banks continue to dominate Ghana’s financial sector, holding 76.4% of total sector assets. This concentration highlights the banking industry’s central role in driving financial intermediation, liquidity provision, and credit allocation.

Following banks, pensions accounted for 16.4% of total assets, reflecting the growing role of long-term savings in the economy. The securities industry contributed 3.8%, while the insurance sector held 3.4%. Collectively, these non-bank financial institutions (NBFIs) play a vital role in broadening access to finance, diversifying investment channels, and cushioning economic shocks.

A notable feature of the 2024 review was the deepening interconnectedness within the financial system. Banks’ exposure to other financial institutions rose to GH₵286 million, with a striking GH₵272.73 million of this exposure linked to the securities market.

However, the reverse relationship was far more significant. Other financial institutions’ exposure to banks surged to GH₵11.56 billion in 2024, compared to GH₵8.14 billion the year before. This growth points to the increasing reliance of NBFIs on banking channels for liquidity, settlement, and investment purposes.

Securities, Insurance, and Pensions Drive Cross-Sector Funding

Breaking down the NBFIs’ exposure to banks, securities firms led the pack with GH₵5.9 billion, indicating the strong funding and investment linkages between capital markets and the banking sector. Insurance companies followed closely, holding GH₵3.1 billion in bank-related assets, while pension funds accounted for GH₵2.6 billion.

These interconnections reflect a financial ecosystem where banks act as both service providers and investment counterparts to other market players. This structure can promote stability through diversification but also heightens the risk of contagion if vulnerabilities in one sub-sector spill over into others.

Net Claims on Banks See Significant Growth

The report further revealed that other financial institutions held net claims worth GH₵11.27 billion more with banks at the end of 2024, up from GH₵7.94 billion in 2023. This 41.9% jump reflects an acceleration in deposits, placements, and other bank-based investments by NBFIs.

For banks, these inflows represent a valuable source of stable funding, especially from pension funds and insurance companies, which typically operate with long-term liabilities. However, the concentration of these claims in the banking system calls for vigilant risk monitoring to ensure liquidity buffers remain sufficient in the face of shocks.

The strong growth in financial sector assets is a positive signal for Ghana’s economic resilience and its capacity to mobilize domestic capital. The increasing participation of pensions, securities, and insurance underscores the gradual deepening of Ghana’s financial markets beyond traditional banking.

However, the sector’s declining share of GDP suggests that while finance is expanding in absolute terms, the real economy is growing even faster. Policymakers may view this as an opportunity to strengthen the synergy between financial growth and productive investment, ensuring that asset expansion translates into tangible economic benefits such as industrial development, SME financing, and infrastructure growth.

The growing interdependence between sub-sectors is a double-edged sword. On one hand, it supports liquidity flows and investment diversification. On the other, it raises the stakes for regulatory oversight, as distress in one segment could have ripple effects across the entire financial system.

The trajectory of financial sector growth will hinge on macroeconomic stability, interest rate trends, and regulatory reforms aimed at strengthening market confidence. With banks holding over three-quarters of sector assets, reforms in capital adequacy, asset quality management, and technological innovation will remain crucial.