Ghanaian banking reforms should strengthen sector

Significance

The move follows a streamlining process by the government over the past two years that has seen nine major banks liquidated by the Bank of Ghana (BoG). President Nana Akufo-Addo has said this is necessary to address liquidity shortfalls and combat corporate governance transgressions.

Impacts

• The New Patriotic Party (NPP) government may struggle to counter accusations of a politically biased rationalisation process.
• Higher capitalisation requirements will compound barriers for new domestic entrants.
• The government will prioritise financial inclusion measures amid fears over the possible negative effects of rationalisation.