Over the first three months this year, the overall assets of commercial banks operating in Ghana grew by only 3.5%, down the 5.7% recorded in Q1 2019. Customer deposits followed the same trend, growing only by 0.7% compared to 6.9% over the first three months last year. This data was provided by the Central Bank of Ghana (BoG), which indicated that the downturn is primarily due to the coronavirus pandemic.

However, despite this shock, the country’s commercial banks are quite resilient in managing the aftermath of the downturn. BoG says this resilience was fostered by the suspension of dividend distribution for the fiscal year 2019, which has strengthened the sector's capital base.

There was also a solid performance throughout 2019, which enabled the local banking sector to contain the impact of the coronavirus on the economy. However, it will be necessary to continue to monitor the increase in bad debts, which declined but at a slower pace than in previous quarters. The Central Bank is also calling for vigilance in the management of these banking assets.

For the time being, Ghanaian banks have increased investment in long-term government debt securities. At the end of March 2020, their weight in the portfolio of these financial companies was 89.7% against 88% a year ago. Corporate credit applications are expected to be treated very restrictively for another two months, which does not bode well for the post-covid-19 recovery plan.

 Idriss Linge