Ghana’s non-performing loans rise to 23.6% in April

The banking sector in Ghana is facing high non-performing loans (NPLs).

Recent data from the Bank of Ghana shows a slight increase in April 2025. The NPL ratio rose to 23.6% in April, up from 23.4% in March. This continues an upward trend that started earlier this year. In December 2024 and January 2025, the NPL ratio was at 21.8%.

When excluding loans classified as “loss,” the NPL ratio drops to 9.0%. This indicates that many distressed loans are already recognized as impaired and provisioned against.

The high NPL ratio is a major concern for regulators and stakeholders. It reflects ongoing asset quality challenges despite growth in overall balance sheets. Total advances in the sector reached GH¢92.2 billion in April 2025, an increase of 18.3% year-on-year. However, this credit growth has not improved asset performance.

The capital adequacy ratio improved to 17.5% in April, up from 17.1% the previous month. This improvement was supported by regulatory reliefs; without them, it would be at 15.8%.

Industry analysts cite post-COVID credit restructuring and macroeconomic volatility as reasons for high NPL levels. Although there was some improvement in late 2024, recent data suggests a plateau or reversal of gains.

Looking ahead, analysts recommend better risk management practices and stronger credit underwriting standards to prevent further asset quality deterioration.