Managing non-performing loans in Ghana's banking sector: Balancing prudential discipline with realistic transition pathways

John Awuah, Lawrence Sackey, Derick Ayiku Nortah-Ocansey and Daniel Mensah

No PB/006/26, Policy Briefs from Ghana Association of Banks (GAB), Accra

Abstract: Non-performing loans (NPLs) remain a central and persistent vulnerability within Ghana's banking sector, with significant implications for financial stability, bank performance, and the sector's ability to support economic growth. Although the 2017-2018 banking sector clean-up led by the Bank of Ghana restored confidence and strengthened capital positions in the short term, empirical evidence indicates that it did not deliver a sustained reduction in underlying credit risk. A paired sample t-test shows that average NPL levels in the post-clean-up period are significantly higher than in the pre-reform period (p

Date: 2026
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