Ghana’s financial system underwent rapid growth and major transformation over the last two decades, which brought new opportunities and risks. The government implemented reforms to enhance the financial system’s resilience to shocks and its contribution to economic growth. The reforms were also aimed at strengthening the regulatory and supervisory framework and financial infrastructures. Despite these reforms, financial stability risks have heightened considerably in the last few years, with high nonperforming loans, under-capitalization, supervision and regulatory weaknesses, and governance lapses.
As a result, the country’s financial sector is in crisis, with most Ghanaians feeling the crunch and the sector’s contribution to the national economy declining very fast. Some of the banks have become insolvent, with their liabilities far outweighing their assets and putting them in positions where they cannot meet their liquidity demands.