• About
  • Advertise
  • Privacy Policy
  • Contact
Sunday, October 12, 2025
  • Login
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
No Result
View All Result

Continued sluggishness in new lending by banks could undermine growth momentum – BoG

Stephen M.Cby Stephen M.C
July 26, 2021
Reading Time: 12 mins read
Stephen M.Cby Stephen M.C
in Economy, One Top Story
0
Continued sluggishness in new lending by banks could undermine growth momentum – BoG

Dr. Ernest Addison - Governor of the Bank of Ghana

The Bank of Ghana (BoG) has expressed worry about continued sluggishness in new lending by banks in the country as it may undermine the growth momentum of the economy. The BoG highlighted in its press release to climax its 101st Monetary Policy Committee (MPC) meetings on Monday, July 26, 2021 that the economy is still on its track of a rebound after it has been hit heavily by the coronavirus pandemic.

“The growth rebound which began in the last quarter of 2020 has continued into the first half of 2021. However, the Committee was concerned about the continued sluggishness in new lending by banks which could undermine the growth momentum”.

Meanwhile, the BoG attributed the slow growth in lending to increased credit risks on account of uncertainties in the business environment due to the impact of COVID-19 pandemic on the real sector.  Another factor cited by the Bank of Ghana is the very high yields offered on Government securities due to increased Government borrowing.  This continues to crowd-out private sector investment needed to keep the growth momentum of the economy.  

“This crowding-out effect continues to keep the credit to GDP gap below the long-term trend and is likely to delay recovery of the economy and discourage banks from strengthening their credit underwriting processes to manage credit risks from lending to underserved sectors of the economy”.

Growth in gross Advances

RelatedPosts

Ghana Climbs Credit Ladder as Moody’s Issues Major Upgrade, Signals Strong Economic Comeback Under IMF Reforms

Ghana’s Debt Relief Gains Momentum As IMF Hails Major Breakthrough with Five Nations Deal

Ghana Secures IMF’s 5th Review Approval — $385 Million Boost to Strengthen Economic Recovery

According to the BoG, gross advances recorded sluggish annual growth of 5.7 percent, relative to 15.7 percent growth in the same period of 2020. Similarly, private sector credit growth has remained sluggish over the past year, broadly reflecting the heightened credit risks associated with the COVID-19 pandemic.

Moreover, annual nominal growth in private sector credit slowed to 6.8 percent in June 2021 compared with 14.2 percent in the corresponding period of 2020. In real terms, private sector credit contracted marginally by 1.0 percent compared to 2.8 percent growth a year earlier.

2Q==

Overall, the BoG noted that the banking sector performance reflected sustained growth in customer deposits, investments, total assets, and profits and key financial soundness indicators remain healthy in relation to liquidity and solvency.

ADVERTISEMENT

Against the backdrop of its macro-prudential risk assessments, the Committee expects the banking sector to withstand mild to moderate credit risk shocks. But warned that “a new wave of the pandemic in Ghana could further elevate credit risks and would require close monitoring of banks’ capital and liquidity buffers”.

Inflation eased sharply

Furthermore, the BoG indicated that headline inflation has eased sharply and reverted within the medium-term target band, driven mainly by the tight monetary policy stance and some base drift effects. Consequently, the Bank expressed optimism that inflation will continue its downwards trend in the second half of the year.

ak6vi7sdym7jqi4ypg5k
Makola market

This is because two readings since the last MPC meeting showed significant decline in headline inflation from 10.3 percent in March 2021 to 7.5 percent in May 2021, before ticking up to 7.8 percent in June 2021.

“The latest forecast remains broadly unchanged with inflation projected to remain within band and around the central path in the forecast horizon barring any upside risks from fiscal pressures”.

Policy rate maintained

Upon a review of the recent development in the economy, the MPC of the Bank of Ghana decided to maintain the policy rate at 13.5% after it surprised economic agents and experts in its last meetings in May with a cut in the policy rate by 100 basis points to 13.5%.

“On the whole, the Committee assessed that the risks to inflation and growth were broadly balanced and decided to keep the policy rate at 13.5 percent”.

READ ALSO: 4.3 million more people registered for mobile money in H1 2021

Tags: 101st MPC meetingsBank of Ghanaeconomygrowth momentumnew lending by banks
Please login to join discussion
Previous Post

Education Minister urges newly inaugurated UG Council to ensure global competitiveness

Next Post

Anti-LGBTQ+ Bill, bold attempt to bring finality on Ghana’s position- Francis-Xavier

Subscription Form

Related Posts

Ghana Climbs Credit Ladder as Moody’s Issues Major Upgrade, Signals Strong Economic Comeback Under IMF Reforms
Economy

Ghana Climbs Credit Ladder as Moody’s Issues Major Upgrade, Signals Strong Economic Comeback Under IMF Reforms

October 11, 2025
Ghana’s Debt Relief Gains Momentum As IMF Hails Major Breakthrough with Five Nations Deal
Economy

Ghana’s Debt Relief Gains Momentum As IMF Hails Major Breakthrough with Five Nations Deal

October 10, 2025
Ghana Secures IMF’s 5th Review Approval — $385 Million Boost to Strengthen Economic Recovery
Economy

Ghana Secures IMF’s 5th Review Approval — $385 Million Boost to Strengthen Economic Recovery

October 10, 2025
Ghana Cedi Crowned Africa’s Best-Performing Currency in 2025 — World Bank Applauds Strong Policy Discipline
Economy

Ghana Cedi Crowned Africa’s Best-Performing Currency in 2025 — World Bank Applauds Strong Policy Discipline

October 10, 2025
Economist Sounds Alarm: Ghana’s Overdependence on Imports Threatens Economic Future
Economy

Economist Sounds Alarm: Ghana’s Overdependence on Imports Threatens Economic Future

October 9, 2025
BoG Gold Reserves Soar to 37.06 Tonnes — Record 21.3% Surge Boosts Cedi Stability
Economy

BoG Gold Reserves Soar to 37.06 Tonnes — Record 21.3% Surge Boosts Cedi Stability

October 9, 2025
Lawyers Declare Odo Broni as Recognized Wife of Daddy Lumba
Entertainment

Lawyers Declare Odo Broni as Recognized Wife of Daddy Lumba

by Esther Korantemaa OffeiOctober 12, 2025
Minister for Lands and Natural Resources, Hon. Emmanuel Armah-Kofi Buah
General News

Mahama’s Galamsey Fight Non-Negotiable – Lands Minister Declares

by Evans Junior OwuOctober 12, 2025
Mining consultant Ing. Wisdom Edem Gomashie
Extractives/Energy

Mining Consultant Challenges GoldBod CEO’s Claims on Gold Purchases 

by Prince AgyapongOctober 12, 2025
Ecobank Ghana Empowers the Next Generation Through Digital Inclusion
Banking

Ecobank Ghana Empowers the Next Generation Through Digital Inclusion

by Stephen M.COctober 12, 2025
GES Urges Parents to Accept Placements and Prepare Wards
General News

GES Urges Parents to Accept Placements and Prepare Wards

by Silas Kafui AssemOctober 12, 2025
Cameroon Goes To The Polls
Africa

Cameroon Goes To The Polls

by Comfort AmpomaaOctober 12, 2025
Lawyers Declare Odo Broni as Recognized Wife of Daddy Lumba
Minister for Lands and Natural Resources, Hon. Emmanuel Armah-Kofi Buah
Mining consultant Ing. Wisdom Edem Gomashie
Ecobank Ghana Empowers the Next Generation Through Digital Inclusion
GES Urges Parents to Accept Placements and Prepare Wards
Cameroon Goes To The Polls

Recent News

Lawyers Declare Odo Broni as Recognized Wife of Daddy Lumba

Lawyers Declare Odo Broni as Recognized Wife of Daddy Lumba

October 12, 2025
Minister for Lands and Natural Resources, Hon. Emmanuel Armah-Kofi Buah

Mahama’s Galamsey Fight Non-Negotiable – Lands Minister Declares

October 12, 2025
Mining consultant Ing. Wisdom Edem Gomashie

Mining Consultant Challenges GoldBod CEO’s Claims on Gold Purchases 

October 12, 2025
Ecobank Ghana Empowers the Next Generation Through Digital Inclusion

Ecobank Ghana Empowers the Next Generation Through Digital Inclusion

October 12, 2025
GES Urges Parents to Accept Placements and Prepare Wards

GES Urges Parents to Accept Placements and Prepare Wards

October 12, 2025
Cameroon Goes To The Polls

Cameroon Goes To The Polls

October 12, 2025
Subscription Form
The Vaultz News

Copyright © 2025 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2D
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships

Copyright © 2025 The Vaultz News. All rights reserved.