Mrs. Elsie Addo Awadzi, the Bank of Ghana’s Second Deputy Governor, has expressed appreciation to the Bank of England, for its constant support in bolstering supervisory cooperation in Ghana and Africa in general.
The Second Deputy Governor made these remarks while speaking to a diverse group of dignitaries at the Bank of Ghana/Bank of England Regional Event, which included Her Excellency, Harriet Thompson, British High Commissioner to Ghana, participants from the Bank of Ghana, African Central Banks, and regional institutions, among several others. The theme of the event was -MicroPrudential Supervision of Credit Risk.
“This week’s event is the third MicroPrudential Supervision training event in a row that has been extended to staff of sister Central Banks in Africa. We are grateful to the Bank of England for appreciating how important these regional events are in supporting the Bank of Ghana’s efforts to strengthen cross-border supervisory cooperation in the region.
“Indeed, these regional events help to build the supervisory capacity of Central Banks in the region through peer learning, and help us find cutting-edge solutions to supervisory concerns that are common to us, particularly as we strive to promote more effective regulation and supervision of Pan-African banks that operate in several African countries and beyond.”Mrs. Elsie Addo Awadzi
Mrs. Awadzi mentioned that the events hosted by both banks have been crucial in ensuring Ghana’s banking sector is robust and competitive. The second deputy governor listed a number of issues that the banking industry in Ghana is now dealing with, and urged the Bank of England to offer a hand in resolving these issues.
Mrs. Awadzi equally asserted that the training session is a good opportunity for African bank supervisors to address hurdles and find common solutions that work for our region, all while learning from the Bank of England’s and other advanced supervisory authorities’ experiences.
“The theme for this three-day event – MicroPrudential Supervision of Credit Risk – has always been critical in promoting the safety, soundness, and resilience of the banking sector. A number of factors account for high credit risk faced by banks in Africa. These include poor credit underwriting standards by some banks, weak credit market infrastructure such as credit reporting systems, challenges in loan enforcement in the face of defaults, and macroeconomic challenges that impact the real sector, among others.”Mrs. Elsie Addo Awadzi
The second deputy governor acknowledged the challenges that Covid-19 posed in the Ghanaian banking sector and added that the Central Bank’s banking sector reforms have protected the banking industry from the pandemic.
“On the part of Ghana, the Bank of Ghana’s banking sector reforms over the last several years have helped to cushion banks somewhat against the impact of the pandemic. Following an Asset Quality Review conducted by the Bank of Ghana in 2015/16 which unearthed significantly impaired assets and insolvency in the banking system, the Bank of Ghana resolved nine banks from August 2017 through January 2019 without causing upheavals in the system. A mandated recapitalization exercise, the implementation of the Capital Requirement under Pillar 1 of Basel II/III, and the adoption of IFRS 9’s Expected Credit Loss computation by banks from 2018/2019 enabled the banking system to rebuild adequate capital buffers that positioned banks to better withstand the economic shock from the pandemic.”Mrs. Elsie Addo Awadzi