The Bank of Ghana has reported that the private sector credit-to-Gross Domestic Product (GDP) gap remained negative at the end of August 2025, marking its lowest level on record.
In its September 2025 Monetary Policy Report, the Central Bank noted that the persistent decline highlights the limited flow of credit to businesses. The credit-to-GDP gap measures the difference between actual credit to the private sector and its long-term trend, serving as an indicator of macro-financial risk.
A positive gap suggests that lending is growing faster than the economy, while a negative one shows slower credit growth. The current negative position, the Bank said, points to the need for stronger policy measures to boost credit delivery and support economic recovery.
Despite the weak credit performance, the report highlighted continued improvement in the soundness of Ghana’s banking sector. The Banking Sector Soundness Index was significantly above its long-term trend and nearing pre-Domestic Debt Exchange Programme (DDEP) levels.
The Central Bank attributed the progress to improving solvency, adequate liquidity, and stronger earnings by banks. However, it cautioned that non-performing loans (NPLs) remained high despite a slight improvement.
“The ongoing macroeconomic recovery, supported by measures being implemented by banks to address loan defaults, should help reduce the build-up of new NPLs and enhance asset quality,” the report stated.
Analysts say restoring credit growth is crucial for sustaining Ghana’s economic rebound, as private sector lending remains the main driver of investment and job creation.
