News Guide Africa

Tag: Bank of Ghana (BoG)

  • BoG’s FX intermediation cut back sparks concerns amidst Cedi volatility

    BoG’s FX intermediation cut back sparks concerns amidst Cedi volatility

    The Bank of Ghana (BoG) has scaled back its foreign exchange intermediation efforts, planning to sell up to US$800 million in December, down from previous months.

    This decision follows a period of significant intervention, with the central bank injecting an estimated US$10 billion into the market between January and November 2025 to stabilize the cedi.

    The BoG’s has attributed the decision to reduced FX demand during the festive season, when market activity typically slows down. The central bank has already auctioned US$100 million on December 2 and another US$100 million on December 4, with plans for twice-weekly auctions open to licensed banks. However, this has raised concerns among market players, with some warning that it could lead to cedi volatility.

    Oil market players call for intervention

    “We need the Bank of Ghana to intervene to stabilize the forex market,” said Duncan Amoah, Executive Secretary of the Chamber of Petroleum Consumers (COPEC). “The swoop on black market forex dealers has had a very dire impact, triggering sharp rate jumps within hours.”

    The cedi has appreciated 31% year-to-date against the dollar, trading at GH¢11.42 to the dollar as of December 10, 2025. However, the recent crackdown on black market dealers has led to a surge in rates, with the dollar selling at around GH¢12.30 on the open market.

    Amoah warned that if the BoG doesn’t intervene, the situation could worsen, pushing fuel prices up. “The fuels market will respond immediately,” he said. “Ghana’s petroleum market needs about US$400 million, and if the open market behaves the way it is doing, they may not be able to hold prices further.”

    The BoG’s new Foreign Exchange Operations Framework aims to support reserve accumulation, reduce excessive short-term volatility, and intermediate FX flows in a market-neutral manner. However, market players are urging the central bank to take swift action to address the current volatility.

    “The managers of the economy have done a tremendous job, but there’s a danger if they don’t intervene properly,” Amoah said. “The situation is not desirable, and authorities need to assess the full impact of the arrests.”

    New FX Framework

    In November, the Bank of Ghana announced that its Board had approved a new Foreign Exchange Operations Framework to clarify the objectives and principles guiding its FX operations.

    According to the regulator, the framework reinforces its commitment to macroeconomic stability under the inflation-targeting regime and a flexible, market-driven exchange rate system.

    The framework is expected to deliver three core objectives:

    – Support reserve accumulation to provide a buffer against external vulnerabilities.

    – Reduce excessive short-term volatility in the FX market by addressing disorderly conditions without undermining exchange-rate flexibility.

    – Intermediate FX flows in a market-neutral manner, using inflows from the Gold Purchase Programme or export surrender requirements.

    This means the Bank of Ghana will channel FX inflows into the market in an orderly, transparent, and non-directional manner.

    The Bank says future interventions will follow a “structured discretion-under-constraint” approach. This ensures interventions do not target specific exchange-rate levels but instead address market failures, including the absence of hedging tools.

    “Reserve accumulation and intermediation objectives will be achieved through transparent and well-communicated operations,” the Bank noted in its recent statement.

    Seasonal trade mount pressure on Cedi

    Apparently, seasonal demand for foreign exchange is once again putting pressure on the Ghanaian cedi as import-dependent businesses move to secure dollars, pounds and euros ahead of the peak Christmas trading period.

    The annual surge in fourth-quarter demand has intensified competition for limited forex supply, unsettling traders who rely on predictable access to foreign currency to restock goods for the festive season.

    As at last week, the impact is already visible across the market. While the interbank rate quotes the dollar at GH¢11.43, the pound at GH¢15.21 and the euro at GH¢13.28, retail pricing tells a markedly different story.

    At forex bureaus, the dollar was selling at around GH¢12.30, with the pound and euro trading at GH¢16.40 and GH¢14.40 respectively.

    The widening spread between official and retail rates has become a key signal of tightening conditions, reflecting growing competition among importers and increasing pressure on dealers struggling to meet demand.

    The central bank maintains that it is closely monitoring liquidity pressures and stands ready to deploy additional monetary policy tools to contain volatility as the festive season approaches. But the coming weeks will be crucial because the balance between seasonal demand and policy response is likely to determine how the cedi ends the year.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Mould explains Bank of Ghana’s role in government debt payment

    Mould explains Bank of Ghana’s role in government debt payment

    A recent social media post has sparked debate on whether the Bank of Ghana’s (BoG) use of its reserves to pay Government of Ghana (GoG) debt can be classified as market intervention.

     

    According to Alex Mould, a finance and energy expert, such transactions are not market intervention, but rather a simple lending process.

     

    “When GoG debt is in US dollars, BoG’s payment of the debt using its reserves is not market intervention,” Mould explains. “However, if GoG debt was in cedis and BoG sold forex to lend cedis to GoG, it could be considered market intervention plus lending.”

     

    Mould highlights that if GoG used its own cedis from the treasury to buy USD from BoG, it should not be considered market intervention, but a pure forex transaction between a bank and its client. Additionally, mopping up cedis by selling dollars (forex) to the open market is seen as market intervention.

     

    “BoG’s role in the forex market is to manage its reserves and facilitate international transactions,” Mould notes. “The bank does not create forex, but rather obtains it through exports, international loans/grants, and interbank market participants.”

     

    In its normal course of operations, BoG exchanges forex from exporters for cedis and sells forex for international current account operations. The bank’s intervention in the forex market occurs when it sells or buys forex to influence the exchange rate outside of its day-to-day needs as a market participant.

     

    “The circa US$10 billion in question can only be attributed to BoG’s total forex sales over the period, not its interventions,” Mould concludes. “This clarification highlights the importance of understanding BoG’s role in managing the country’s forex reserves and facilitating government transactions.”

  • BoG beats deadline as ‘Exposure Draft Guidelines’ for Non-Interest Banking published   …matures by Dec. 24

    BoG beats deadline as ‘Exposure Draft Guidelines’ for Non-Interest Banking published   …matures by Dec. 24

    In a significant move to deepen financial inclusion and promote stability in the banking sector, the Bank of Ghana (BoG) has released a comprehensive set of guidelines for the regulation and supervision of Non-Interest Banking Institutions (NIBIs).

     

    The guidelines, titled “Guideline for the Regulation and Supervision of Non-Interest Banking”, provide a framework for licensing, governance, and supervision of non-interest financial products and services.

     

    This move is expected to enhance financial inclusion, ensure regulatory compliance, and promote stability in Ghana’s banking sector. The draft will become a working document by December 24, 2025, all things being equal. This falls within the ‘before end of 2025’ timeline set by the central bank to get NIBF operationalised in the country.

     

    “The guidelines are part of BoG’s efforts to regulate non-interest banking in line with the BOG’s Procedures for Issuance of Directives, 2020,” said the Bank in a statement.

     

    According to the guidelines, NIBIs will be required to operate with sound financial footing and transparent governance. The guidelines prescribe minimum paid-up capital and fees, and foreign-owned NIBIs are required to bring in at least 60% of the required capital in convertible currency, to be invested in non-interest compliant instruments.

     

    “The move is expected to enhance financial inclusion, ensure regulatory compliance, and promote stability in Ghana’s banking sector,” said the statement.

     

    This has been made possible tireless effort and consistent advocacy by the Bank of Ghana expert team led by Professor John Gartchie Gatsi, Advisor to the Governor of the Bank of Ghana.

     

    Key provisions of the guidelines include:

     

    – Licensing and Approval: The central bank will review all non-interest banking licenses and may subject pending applications to additional scrutiny.

    – Compliance Testing: Institutions must demonstrate successful compliance with Non-Interest Banking (NIB) principles before full operation.

    – Documentation: Non-English submissions must be accompanied by certified English translations, and the Bank may require verification or certification of supplied information.

    – Timelines: Processing timelines for applications will follow Acts 930, 1032, and section 5 of Act 774.

     

    The guidelines also define various types of NIBIs, including full-fledged non-interest banks, rural/community banks, specialised deposit-taking institutions, microfinance institutions, and foreign non-interest subsidiaries.

     

    The Bank of Ghana has invited comments from the banking industry and the public on the Exposure Draft, which is available on the BoG website at www.bog.gov.gh. Interested parties can submit comments to bodletters@bog.gov.gh by 24 December 2025.

     

    The release of these guidelines is expected to enhance the integrity of non-interest banking in Ghana, offering clearer rules for market entry and operation while protecting consumers and promoting stable financial practices.

     

    Speaking on the guidelines, Prof Gatsi said, “The guidelines are designed to ensure price stability and financial stability while fostering new banking and finance jobs.

     

    “The guidelines are part of the Bank of Ghana’s efforts to promote financial inclusion and support real-sector growth, and align Ghana’s financial system with the Sustainable Development Goals.”

     

    The move is seen as a significant step towards promoting Islamic finance and other non-interest banking products in Ghana, and is expected to contribute to the country’s economic development.

     

    By Adnan Adams Mohammed

  • Non-Interest Banks: BoG considers new liquidity tools  …as operationalisation nears

    Non-Interest Banks: BoG considers new liquidity tools  …as operationalisation nears

    The Bank of Ghana (BoG), as part of an effort to roll out full operationalization of Non-Interest Banking and Finance (NIBF) in the country, is developing new liquidity management tools tailored to non-interest banking institutions, ensuring they can manage excess funds effectively.

     

    As liquidity management is a key requirement in monetary policy management, but policy instruments like repos, open-market operations, and reserve requirements of banks are structured based on conventional interest bearing, that do not attract noninterest banks.

     

    According to the central bank, liquidity management for non-interest institutions will be guided by asset-backed structures and risk-sharing models rather than conventional interest-based instruments, but will still meet the same prudential benchmarks. However, it explains that, if no non-interest liquidity management tools are available, non-interest banks may invest excess liquidity in conventional ones but will not take interest.

     

    “Short term and long term Sukuks are liquidity management tools, and the Bank is working together with the Securities and Exchange Commission to develop their guidance in parallel to create liquidity tools attractive to non- interest banks” the Bank noted in a frequently asked questions note published on its website.

     

    “Further, we have learnt of liquidity management tools deployed by other central banks, which we shall add to the portfolio of liquidity management instruments.”

     

    Meanwhile, the central bank outlined some new liquidity management tools it will be implementing, such as:

     

    A safe custody account which will allow participants to deposit excess funds in their possession for a period of 3 or 7 days; A non-interest note which shall entitle the participating institutions to subsequently obtain interest-free loans up to the amount they initially deposited with the central bank; Non-interest backed securities – The bank may invest in non-interest financial certificates issued by multilateral financial institutions normally in the form of sukuk structured on different products; and Lenders of last resort instruments for example, intraday facilities are being considered.

     

    The BoG is working with the Securities and Exchange Commission to develop guidance on Sukuk, creating attractive liquidity tools for non-interest banks. Transparency and consumer protection are integral to the non-interest banking guidelines, with clear disclosures and independent reporting.

     

    These developments aim to promote financial inclusion, broaden economic opportunities, and provide consumers with more choices while ensuring fairness and non-discrimination in the financial system.

     

    By Adnan Adams Mohammed

  • Digital credit regulation: BoG trains media on legal regime 

    Digital credit regulation: BoG trains media on legal regime 

    The Bank of Ghana (BoG) has trained selected journalists to help deepen public understanding of the fast-growing digital credit landscape in the country.

     

    The session forms part of the central bank’s broader effort to promote responsible lending practices and ensure that consumers are better protected as digital financial services continue to expand.

     

    Speaking at the event, the Bank’s Director of Communication, Bernard Otabil, underscored the critical role of the media in shaping public perception and promoting financial literacy.

     

    He noted that as digital credit services become more accessible through mobile phones and online platforms, it is increasingly important for the public to receive accurate, timely, and clear information.

     

    Mr. Otabil emphasised that media engagement is essential to narrowing the information gap surrounding digital lending.

     

    According to him, the rise of instant mobile loans, fintech-driven credit products, and online lending platforms presents both opportunities and risks.

    While these innovations improve access to finance especially for underserved populations they also raise concerns about transparency, data protection, and potential predatory practices.

     

    “The media remains one of our strongest partners in ensuring that consumers understand their rights and responsibilities when accessing digital credit,” Mr. Otabil said. “By working closely with journalists, we can amplify messages on responsible borrowing, regulatory safeguards, and the need for customers to use only licensed and compliant service providers.”

     

    He further explained that the Bank of Ghana continues to strengthen its regulatory and supervisory frameworks to address challenges emerging in the digital lending ecosystem. These include enforcing compliance among digital lenders, monitoring unethical recovery practices, and ensuring that customer data is handled securely.

    Participants at the session were taken through key aspects of the BoG’s consumer protection guidelines, current regulatory measures for digital credit providers, and the central bank’s ongoing initiatives to promote financial stability.

     

    The event concluded with a call for sustained collaboration between the BoG and the media to safeguard consumer interests and build public trust in Ghana’s digital financial services sector.

  • Ghana Reference Rate drops to 15.9%; lending rates set to decline …as MPC hopeful of further policy rate cut in Jan. 2026

    Ghana Reference Rate drops to 15.9%; lending rates set to decline …as MPC hopeful of further policy rate cut in Jan. 2026

    Ghana’s Ghana Reference Rate (GRR) has dropped to 15.9% in December, a significant 200 basis-point decline from November’s 17.93%.

    This represents a 200 basis-point decline from the previous month. The decrease is driven by improvements in key indicators, including the Monetary Policy Rate, Treasury rates, and interbank market rates.

    The recent Monetary Policy Committees decision to cut policy rate by a 350-basis-point to 18% played a major role in the GRR decline. Also, the slight fall in Treasury bill rates and easing interbank market rates contributed to the decrease.

    The Ghana Reference Rate (GRR) is a key benchmark used by commercial banks to price loans. Effectively it serves as the base lending rate for all the commercial banks who then add a margin, the size of which is determined by the quantum of risk a borrower preasents.

    Impact on Borrowing Costs:

    Commercial banks are likely to adjust their lending rates downward starting from December. New loans contracted in December will be benchmarked on the new GRR, resulting in lower interest payments.

    However, borrowers with fixed-rate loans won’t be affected, but those with variable-rate agreements may see small adjustments.

    Economic Context:

    The decline comes amid businesses struggling to access credit due to a liquidity squeeze.

    Average lending rates have dropped from 26.6% to 24.2%, reflecting an easing credit environment.

    The Bank of Ghana projects inflation to reach 4-6% by year-end, influencing the Monetary Policy Committee’s decision-making.

    Future Outlook:

    Consequently, almost half of the MPC members support a further policy rate cut in January 2026.

    Already, the Centre for Policy Analysis projects the Monetary Policy Rate to drop to around 15% in 2026, signaling a crucial turning point in Ghana’s macroeconomic stabilization efforts.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • BoG plans for a more liquid economy in 2026

    BoG plans for a more liquid economy in 2026

    The Bank of Ghana has declared on its website that it is set to scale back its mopping of liquidity in 2026 if inflation and exchange rate pressures remain contained.

    This stance will be welcomed by businesses and households alike across Ghana who fret that even though the sharp fall in consumer price inflation and accompanying lowering of credit financing costs have been beneficial to them, this has been achieved in part by depriving them of direly needed liquidity, as the central bank has sought to minimize demand-pull inflation for goods, services and foreign exchange. This has been achieved primarily by its issuance of short term Bank of Ghana bills to conduct its open market operations through liquidity mop-ups, as well as stringent reserve requirements for commercial banks.

    However the central bank has also warned that it will only allow liquidity growth cautiously, and only as macro-economic conditions permit, stressing that while it is “currently confident in the disinflation path and fiscal discipline… its priority is to keep inflation expectations well-anchored, using both interest rate policy and liquidity absorption tools.”

    Economic operators hail the BoG for its pivotal role in bringing inflation down from 23.8% at the start of the year, to a long term low of 6.3% for November, and for cutting the Ghana Reference Rate (which effectively serves as the base lending rate for all the commercial banks) from 29.72% at the turn of the year to 17.86% by October.

    However they accuse it of doing this by mopping up much of the liquidity in the economy, thereby depriving them of the means to execute many of their needed economic plans and transactions.

    Indeed, total liquidity in the economy measured by M2+ – grew by just 6.1% over the first ten months of 2025, having started the year at GHc329.8 billion and reaching GHc351.4 billion by the end of October.

    Even more instructively it declined to a trough of GHc325.0 billion in June; and October’s level was lower than September’s GHc354.0 billion.

    Indeed, the BoG insists that easing monetary policy through interest rate cuts does not necessarily imply that the monetary policy stance is not tight. It points out that with high real interest rates, as is the case in Ghana, it can sufficiently reduce the monetary policy rate and still maintain a tight monetary policy stance thus arguing that the recent sharp reductions in the monetary policy rate by the Monetary Policy Committee (cumulatively from 28% to 18% between July and November) are therefore fully consistent with the IMF’s recommendation to maintain a tight monetary policy stance.

    Now however central bank officials are considering allowing increased liquidity in the economy next year. This would support the achievement of government’s 4.8% economic growth target for 2026 the World Bank projects a lower 4.3% but Fitch Ratings projects it at a higher 5.9% – this coming on an expected growth of at least 4.5% for 2025.

    If the Bank of Ghana permits liquidity whether measured by broad money (M2+), or overall domestic credit to grow at a faster pace in 2026 than it did in 2025, the implications would be far-reaching. Higher liquidity can support the post-stabilization growth agenda of the Mahama administration, especially under policies such as the 24-Hour Economy and the stimulus measures for export diversification.

    However, it also poses risks for inflation, exchange-rate stability and debt sustainability, especially given Ghana’s recent experience with macro-economic volatility.

    A more liquid financial environment would generally push interest rates downward, particularly lending rates, which remain a major constraint to private-sector expansion.

    Lower financing costs would help manufacturers, agribusiness firms and service providers invest in capacity expansion, adopt new technology and scale up working capital which could boost output, employment and domestic value-addition in line with government objectives.

    Besides, increased liquidity usually translates into reduced borrowing costs for households as well, making personal loans and consumer financing more affordable, raising household consumption and possibly stimulating real estate and retail activity.

    Banks would gain from stronger credit demand and improved loan growth after years of tight credit conditions following the Domestic Debt Exchange Programme (DDEP).

    Non-bank financial institutions may also find easier access to wholesale funding in a more liquid market which also typically reduces the yield curve on public treasury instruments, lowering the government’s domestic borrowing costs.

    However, these advantages would be accompanied by considerable risks to Ghana’s hugely impressive economic turnaround accomplished in 2025.

    The most immediate risk from excessively rapid liquidity growth is rising inflation. If the increase in money supply outpaces real economic activity especially in a supply-constrained economydemand-pull inflation could resurface. Given Ghana’s recent success in gradually lowering inflation to single digits from a high of 54.5% in 2023, any reversal would erode purchasing power and undermine public confidence in monetary policy. However BoG Governor Dr Johnson Asiama is confident the central bank can navigate its way around this. “The MPC has shown that data-driven policy decisions and the careful calibration of the policy rate can effectively deliver price stability. Relying on these lessons, the Committee aims to keep inflation firmly within the medium-term target band of 8 ± 2 percent in 2026.

    Higher liquidity could also lead to increased imports and speculative foreign exchange demand, putting pressure on the cedi, a situation which indeed arose during the third quarter of this year, thus persuading the BoG to aggressively mop up liquidity in September, ahead of its US$1.15 billion forex market intervention in October.

    A weakening currency would raise the cost of imported goods and fuel, feeding into inflation and potentially triggering a destabilizing feedback loop.

    If liquidity growth appears inconsistent with inflation-targeting principles or IMF programme commitments, investor confidence could weaken. This may result in higher risk premiums, reduced foreign portfolio inflows and greater volatility in domestic bond markets.

    Furthermore, while credit growth can strengthen banks, overly rapid expansion may compromise credit quality. Non-performing loans could rise if lending outpaces proper risk assessment.

    Economists and monetary policy analysts agree that allowing faster liquidity growth in 2026 could support growth, investment and job creation across multiple stakeholder groups. But it must be carefully calibrated to avoid triggering inflation, currency instability and policy credibility concerns.

    The Bank of Ghana has already put in place a framework for micro- management of liquidity by reintroducing very short term 14 day bills for its open market operations The challenge for the Bank of Ghana is striking a balance between stimulating economic activity and protecting hard-won macroeconomic stability gains.

     

    By Toma Imirhe

     

     

     

     

     

     

     

  • BoG considers new liquidity tools for Non-Interest Banks …as it trains industry players

    BoG considers new liquidity tools for Non-Interest Banks …as it trains industry players

    The Bank of Ghana (BoG), as part of an effort to roll out full operationalization of Non-Interest Banking and Finance (NIBF) in the country, is developing new liquidity management tools tailored to non-interest banking institutions, to ensure their excess funds can be managed effectively.

    Liquidity management is a key requirement in monetary policy management, but policy instruments like repos, open-market operations, and reserve requirements of banks are structured based on conventional interest bearing activities, that do not attract non-interest banks.

    According to the central bank, liquidity management for non-interest institutions will be guided by asset-backed structures and risk-sharing models rather than conventional interest-based instruments, but will still meet the same prudential benchmarks. However, it explains that, if no non-interest liquidity management tools are available, non-interest banks may invest excess liquidity in conventional ones but will not take interest.

    “Short term and long term Sukuks are liquidity management tools, and the (Central) Bank is working together with the Securities and Exchange Commission to develop their guidance in parallel to create liquidity tools attractive to non- interest banks” the BoG noted in a frequently asked questions note published on its website.

    “Further, we have learnt of liquidity management tools deployed by other central banks,(for non-interest banking) which we shall add to the portfolio of liquidity management instruments.”

    Meanwhile, the central bank outlined some new liquidity management tools it will be implementing, such as:

    A safe custody account which will allow participants to deposit excess funds in their possession for a period of 3 or 7 days; A non-interest note which shall entitle the participating institutions to subsequently obtain interest-free loans up to the amount they initially deposited with the central bank; Non-interest backed securities The bank may invest in non-interest financial certificates issued by multilateral financial institutions normally in the form of Sukuk structured on different products; and Lenders of last resort instruments for example, intraday facilities are being considered.

    The BoG is working with the Securities and Exchange Commission to develop guidance on Sukuk, creating attractive liquidity tools for non-interest banks. Transparency and consumer protection are integral to the non-interest banking guidelines, with clear disclosures and independent reporting.

    These developments aim to promote financial inclusion, broaden economic opportunities, and provide consumers with more choices while ensuring fairness and non-discrimination in the financial system.

    Consequently, the Bank of Ghana organised a capacity-building program last week, for stakeholders, including banks, insurers, and capital market players.

    The training covered key areas of NIBF such as; Sukuk structuring, non-interest product development, licensing procedures, and governance models.

    This move is aimed at promoting financial inclusion, broadening economic opportunities, and offering consumers more choices while ensuring fairness and non-discrimination in the financial system.

    “It is significant to develop capacities for the emerging new model products of financing and banking in Ghana”, Ismail Adam, Head of Banking Supervision at Bank of Ghana said, while addressing the participants on behalf of the Governor.

    “Since 2016, when NIBF were made permissible in Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), this is the first time we have invested as Bank of Ghana in regulatory effort toward this novelty.

    “The Bank of Ghana has reached this important point because of the inclusive engagement process with both Christians and Muslims agreed on this novel concept”, Mr Adam noted.

    Professor John Gatsi, Advisor to the Governor on Non Interest Banking and Finance at the Bank of Ghana (BoG), in his opening remarks noted that, the Chartered Institute of Bankers (CIB) Ghana has begun rolling out certificate courses for banking professionals in capacity building preparation to await implementation of the NIBF.

    Key highlights of the NIBF framework:

    The framework represents an effort to deepen financial inclusion and create space for alternative forms of finance that align with Ghana’s secular and regulatory principles while expanding access to ethical banking services.

    The draft non-interest banking guideline is currently undergoing internal validation at BoG and will soon be presented to the Governor for review and approval, with publication expected by year end.

    Operational standards

    The guideline will define licensing requirements, governance structures, operational standards, and product approval processes.

    Each institution will have its own internal governance committee responsible for vetting non-interest products, while a central oversight body at BoG will validate compliance with ethical and prudential standards.

    Secular Approach:

    Professor Gatsi reaffirmed the Bank of Ghana’s commitment to implementing non-interest banking through a secular and neutral approach. The central bank plans to deploy this within a secular economy with rules ensuring market neutrality. Implementation will begin on a phased basis, initially excluding microfinance, rural, and community banks to allow for controlled management before expansion.

    “We are deploying this within a secular economy, and therefore there are rules to ensure that the market remains neutral,” Professor Gatsi stated. He emphasized that starting small allows regulators to identify challenges early, strengthen compliance systems, and build institutional capacity before expanding to other financial sector segments.

    The framework requires institutions to avoid names or branding that suggest religious association, whether Islamic or Christian, to preserve market neutrality. Non-interest banking in Ghana will be driven by ethical financial practice and inclusivity rather than religious identity.

    Type of licenses and capital requirement:

    The Bank of Ghana advisor revealed that two types of licenses will be introduced under the framework. A window license will allow conventional banks interested in offering non-interest products to do so, while a full non-interest banking license will be available for institutions operating exclusively under non-interest principles.

    The regulatory design includes two types of licenses for market participants. Conventional banks wishing to offer non-interest products will apply for a window license, while institutions planning to operate entirely under non-interest principles will require a full non-interest banking license.

    Capital requirements for establishing non-interest banks will strictly follow existing prudential and regulatory standards under the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930). Institutions must be fully incorporated in Ghana and have their capital sources thoroughly verified under BoG oversight.

    Inter-Agencies collaboration:

    BoG is collaborating with the Securities and Exchange Commission (SEC) and National Insurance Commission (NIC) to harmonize regulations on Sukuk (non-interest bonds) and Takaful (non-interest insurance). Professor Gatsi explained that a joint committee has been formed to ensure synchronized guidelines across banking, capital markets, and insurance sectors.

    This development is expected to attract new investment flows, promote ethical banking, and contribute to Ghana’s financial stability.

    Transparency and disclosures 

    Transparency and disclosures are integrated in the non-interest banking guidelines

    regarding product development, financial contracts and regulatory approval to protect consumers.

    Contracts shall disclose all terms and obligations between the bank and customers before signing and implementation. The Non-interest Advisory Committees are required to provide an independent periodic report meant to ensure transparency and protection of consumers. Consumer protection is therefore a focal consideration in the guidelines. In addition, there are well- trained examiners and supervisors to ensure consumers are protected.

    Experts remarks:

    According to industry experts, Ghana’s measured approach is prudent and well timed.

    Nigeria’s non-interest banking sector, anchored by institutions such as Jaiz Bank and TAJBank, faced early skepticism but has since demonstrated strong performance and resilience within a secular regulatory framework guided by strong governance and public education.

    Attahiru Maccido, Managing Director and Chief Executive Officer of One 17 Capital Limited in Nigeria, explained that non-interest finance models could help Ghana mobilize patient capital for long term sectors such as infrastructure, agriculture, and small business development. He emphasized that non interest banking represents not just an alternative form of finance but a tool for inclusive growth and financial stability.

    Meanwhile, Dr. Shaibu Ali, Director General of the Islamic Finance Research Institute of Ghana, emphasized that non-interest banking transcends merely removing interest to redefine financial ethics. Every transaction must have an underlying asset, and speculative or unethical activities are strictly prohibited. Citing recent research, he observed that while 71 percent of Ghanaians are aware of non-interest banking, fewer than 30 percent fully understand how it works, highlighting the need for capacity building and professional certification.

    Commercial banks readiness

    From the commercial banking perspective, Sina Kamagate, Executive Head of Retail Banking at GCB Bank PLC, pointed out that demand already exists for ethical and interest free products. GCB Bank has customers who decline interest payments on their accounts, demonstrating that offering non-interest banking services will expand inclusion and cater to these customers’ values.

    On his part, Kwame Abbey, Deputy Managing Director at Société Générale Ghana, has highlighted six key opportunity areas including retail inclusion, small and medium enterprise (SME) and agricultural finance, infrastructure funding through Sukuk, ethical and environmental, social, and governance (ESG) linked finance, digital innovation, and capacity development. He stressed that non-interest banking aligns closely with sustainable finance and could attract new investment flows into Ghana’s economy because it prohibits speculative activities and encourages real asset linkages.

    Consequently, Robert Dzato, Chief Executive Officer of CIB Ghana, has reiterated the Institute’s commitment to professional development and ethical banking standards. He announced that CIB Ghana will lead in developing capacity building programmes to deepen understanding of non-interest banking among practitioners and regulators. A new certification programme on Non Interest Banking will be launched as part of the 2025 Bankers’ Week celebration.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • NIBF: BoG nears full operationalisation …trains industry players

    NIBF: BoG nears full operationalisation …trains industry players

    The Bank of Ghana, as part of an effort to roll out full operationalization of Non-Interest Banking and Finance (NIBF) in the country, has organised a capacity-building program today, December 1, 2025, for stakeholders, including banks, insurers, and capital market players.

     

    The training covered key areas of NIBF such as; Sukuk structuring, non-interest product development, licensing procedures, and governance models.

     

    This move is aimed at promoting financial inclusion, broadening economic opportunities, and offering consumers more choices while ensuring fairness and non-discrimination in the financial system.

     

    “It is significant to develop capacities for the emerging new model products of financing and banking in Ghana”, Ismail Adam, Head of Banking Supervision at Bank of Ghana, addressing the participants on behalf of the Governor said.

     

    “Since 2016, when NIBF were made permissible in Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), this is the first time we have invested as Bank of Ghana in regulatory effort toward this novelty.

     

    “The Bank of Ghana has reached this important point because of the inclusive engagement process with both Christians and Muslims agreed on this novel concept”, Mr Adam noted.

     

    Professor John Gatsi, Advisor to the Governor on Non Interest Banking and Finance at the Bank of Ghana (BoG), in his opening remarks noted that, the Chartered Institute of Bankers (CIB) Ghana has begun rolling out certificate courses for banking professionals in capacity building preparation to await implementation of the NIBF.

     

    Key highlights of the NIBF framework:

     

    The framework represents an effort to deepen financial inclusion and create space for alternative forms of finance that align with Ghana’s secular and regulatory principles while expanding access to ethical banking services.

     

    The draft non-interest banking guideline is currently undergoing internal validation at BoG and will soon be presented to the Governor for review and approval, with publication expected by year end.

     

    Operational standards

     

    The guideline will define licensing requirements, governance structures, operational standards, and product approval processes.

     

    Each institution will have its own internal governance committee responsible for vetting non-interest products, while a central oversight body at BoG will validate compliance with ethical and prudential standards.

     

    Secular Approach: 

     

    Professor Gatsi reaffirmed the Bank of Ghana’s commitment to implementing non-interest banking through a secular and neutral approach. The central bank plans to deploy this within a secular economy with rules ensuring market neutrality. Implementation will begin on a phased basis, initially excluding microfinance, rural, and community banks to allow for controlled management before expansion.

     

    “We are deploying this within a secular economy, and therefore there are rules to ensure that the market remains neutral,” Professor Gatsi stated. He emphasized that starting small allows regulators to identify challenges early, strengthen compliance systems, and build institutional capacity before expanding to other financial sector segments.

     

    The framework requires institutions to avoid names or branding that suggest religious association, whether Islamic or Christian, to preserve market neutrality. Non-interest banking in Ghana will be driven by ethical financial practice and inclusivity rather than religious identity.

     

    Type of licenses and capital requirement: 

     

    The Bank of Ghana advisor revealed that two types of licenses will be introduced under the framework. A window license will allow conventional banks interested in offering non-interest products to do so, while a full non-interest banking license will be available for institutions operating exclusively under non-interest principles.

     

    The regulatory design includes two types of licenses for market participants. Conventional banks wishing to offer non-interest products will apply for a window license, while institutions planning to operate entirely under non-interest principles will require a full non-interest banking license.

     

    Capital requirements for establishing non-interest banks will strictly follow existing prudential and regulatory standards under the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930). Institutions must be fully incorporated in Ghana and have their capital sources thoroughly verified under BoG oversight.

     

    Liquidity management for non-interest institutions will be guided by asset-backed structures and risk-sharing models rather than conventional interest-based instruments, but will still meet the same prudential benchmarks.

     

    Inter-Agencies collaboration:

     

    BoG is collaborating with the Securities and Exchange Commission (SEC) and National Insurance Commission (NIC) to harmonize regulations on Sukuk (non-interest bonds) and Takaful (non-interest insurance). Professor Gatsi explained that a joint committee has been formed to ensure synchronized guidelines across banking, capital markets, and insurance sectors.

     

    This development is expected to attract new investment flows, promote ethical banking, and contribute to Ghana’s financial stability.

     

    Experts remarks:

     

    According to industry experts, Ghana’s measured approach was prudent and well timed.

     

    Nigeria’s non-interest banking sector, anchored by institutions such as Jaiz Bank and TAJBank, faced early skepticism but has since demonstrated strong performance and resilience within a secular regulatory framework guided by strong governance and public education.

     

    Attahiru Maccido, Managing Director and Chief Executive Officer of One 17 Capital Limited in Nigeria, explained that non-interest finance models could help Ghana mobilize patient capital for long term sectors such as infrastructure, agriculture, and small business development. He emphasized that non interest banking represents not just an alternative form of finance but a tool for inclusive growth and financial stability.

     

    Meanwhile, Dr. Shaibu Ali, Director General of the Islamic Finance Research Institute of Ghana, emphasized that non-interest banking transcends merely removing interest to redefine financial ethics. Every transaction must have an underlying asset, and speculative or unethical activities are strictly prohibited. Citing recent research, he observed that while 71 percent of Ghanaians are aware of non-interest banking, fewer than 30 percent fully understand how it works, highlighting the need for capacity building and professional certification.

     

     

    Commercial banks readiness

     

    From the commercial banking perspective, Sina Kamagate, Executive Head of Retail Banking at GCB Bank PLC, pointed out that demand already exists for ethical and interest free products. GCB Bank has customers who decline interest payments on their accounts, demonstrating that offering non-interest banking services will expand inclusion and cater to these customers’ values.

     

    From his side, Kwame Abbey, Deputy Managing Director at Société Générale Ghana, has highlighted six key opportunity areas including retail inclusion, small and medium enterprise (SME) and agricultural finance, infrastructure funding through Sukuk, ethical and environmental, social, and governance (ESG) linked finance, digital innovation, and capacity development. He stressed that non-interest banking aligns closely with sustainable finance and could attract new investment flows into Ghana’s economy because it prohibits speculative activities and encourages real asset linkages.

     

    Consequently, Robert Dzato, Chief Executive Officer of CIB Ghana, has reiterated the Institute’s commitment to professional development and ethical banking standards.

    He announced that CIB Ghana will lead in developing capacity building programmes to deepen understanding of non-interest banking among practitioners and regulators. A new certification programme on Non Interest Banking will be launched as part of the 2025 Bankers’ Week celebration.

     

    By Adnan Adams Mohammed

  • Ghana’s public debt rises to GH¢684.6bn in 2025’s 3rd quarter

    Ghana’s public debt rises to GH¢684.6bn in 2025’s 3rd quarter

    Ghana’s public debt rose by GH¢71.6 billion in the third quarter of 2025, pushing the total debt stock to GH¢684.6 billion ($55.1 billion) as of September.

    Per the Bank of Ghana’s latest Summary of Economic and Financial Data for the period ending November 2025, despite the quarterly increase, the report shows Ghana is still making substantial progress in reducing its overall debt burden compared to last year.

    The current debt level, equivalent to 48.9% of GDP, is up from GH¢613 billion (43.8% of GDP) in June, but broader trends remain favourable.

    Between January and September 2025, Ghana cut its total debt by GH¢67.5 billion, while year-on-year figures show an even deeper reduction of GH¢125.4 billion compared to September 2024.

    External debt was the major driver of the quarter three spike, climbing to GH¢367 billion from GH¢300.3 billion in June.

    Yet, on longer timelines, external debt has posted dramatic declines  falling GH¢432 billion year-to-date and GH¢508.6 billion year-on-year. It now accounts for 26.2% of GDP.

    Domestic debt remained relatively stable, inching up to GH¢317.6 billion from GH¢312.7 billion in June, with only modest movements, year-to-date and year-on-year.

    The Bank of Ghana estimates Ghana’s nominal GDP at GH¢1.4 trillion, the base for the revised debt-to-GDP ratios.