Ghana: Non-performing loans up 15% in 2015

Mar 21, 2016

The significant decline in loan repayments reflects the country's economic difficulties.

New official figures seen by Business Day Ghana have revealed that non-performing loans (NPL) in Ghana have increased by 14.9 per cent to 4.52 billion cedis (€1 billion) between December 2014 and December 2015.

According to the latest Bank of Ghana's Financial Stability Report, credit to the private sector accounted for 96.1 per cent of all non-performing loans in December 2015.

The significant decline in loan repayments reflects the country's difficult economic environment, with credit to the private sector growing by only 6.3 per cent at the end of December 2015 compared with 21.2 per cent at the end of December 2014.


In addition, credit to households contracted by 8.1 per cent last year compared with a 23.7 per cent growth recorded the prior year.

Plummeting global commodity prices have pummelled Ghana’s economy. The country has multiplied Eurobonds to balance its budget, which recently led credit rating agency Moody's to drop the sovereign rating of Ghana from "B2" to "B3", with a negative outlook.

The US agency justified this decision by citing the country's growing debt burden. "The first driver of the downgrade is Ghana's deteriorating fiscal strength as reflected in the significant increase in the government debt ratio to an estimated 67.2 per cent of GDP in 2014 from 54.8 per cent in 2013," it said in a statement.ADNFCR-2976-ID-801814957-ADNFCR