The finance minister, Ken Ofori Atta, has indicated that the banking sector remains well-capitalized, liquid, and financially viable, with strong buffers to help the recovery process.
Banks reported a good balance sheet position as of September 30, 2021, notwithstanding modest reductions in annual growth rates of some key balance sheet indicators this year compared to the same time last year, he said.
Per the finance minister, the banking industry’s total assets climbed 16.9% year on year to GH170.3 billion at the end of September 2021.
“This represents a decline in growth from the 22.2 percent in September 2020, attributed to the lingering impact of COVID-19. Year-to-date growth in assets of 14.0 percent in 2021, however, marginally exceeded the corresponding growth of 13.0 percent in 2020, reflecting the gradual rebound in economic activities this year.”
Ken Ofori-Atta
Mr. Ofori Atta made the remarks at a presentation to Parliament on Wednesday titled “Building a Sustainable Entrepreneurial Nation: Fiscal Consolidation and Job Creation.”
In September 2021, the finance minister highlighted that investment growth slowed as banks shifted a share of excess liquidity towards lending in the third quarter of 2021. He further stated that investments in bills and securities increased by 30.0 percent year-on-year to GH81.2 billion at the end of September 2021, compared to 36.6 percent in September 2020.
Mr. Ofori Atta said that gross loans and advances rose by 4.8 percent in the year to September 2021, compared to 1.7 percent last year in 2020.
Banks reported a steady comeback in credit growth in September 2021, according to the minister, in keeping with forecasts of a net loosening of the stance on loans to businesses and households, as well as a rise in credit demand, as indicated in the August 2021 round of credit conditions survey.
“The annual growth rate of gross loans and advances, however, declined from 14.4 percent to 9.0 percent during the review period. 137. The industry continued to record strong and sustained growth in deposits attributed to liquidity flows within the domestic economy.”
Ken Ofori-Atta
The banking industry committed to youth employment
The minister iterated that commercial banks have fully committed to implementing measures to address the country’s high rate of youth and graduate unemployment. The banks will seek out and maximize the entrepreneurial abilities of these young people.
“In addition, the banking industry has committed GHC75m, over the next three years, to collectively engage in skills development program for a minimum of 150,000 young graduates and youth entrepreneurs by engaging in activities. To achieve this, the banks have pledged to review their internal processes and procedures to facilitate easier access to credit by SMEs”.
Ken Ofori-Atta
The government has also made policies to address the country’s youth unemployment problems.
“Mr. Speaker, this understanding of the youth employment challenge, as well as extensive consultations with stakeholders including youth associations and educational institutions across the country, have led to the development of the YouStart initiative which proposes to use GH¢1 billion each year to catalyze an ecosystem to create 1 million jobs and in partnership with the Finance Institutions and Development Partners, raise another 2 billion Cedis.”
Ken Ofori-Atta
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