Ghana’s Central Bank must strengthen the non-bank sector of economy—IMF boss

IMF Managing Director, Christine Lagarde
  • IMF boss Christine Lagarde said even though the Bank of Ghana implementing a number of reformative maeasures, more must be done to strengthen the economy.
  • She said the Bank of Ghana must put in measures to strengthen the non-bank sector of Ghana's economy.
  • She praised the BoG for revoking licences of seven banks after they were insolvent or distressed.

The Managing Director of the IMF, Christine Lagarde has entreated the Bank of Ghana to look into the weaknesses in the non-bank sector of the economy in order to make the financial sector more resilient.

Delivering her keynote address on the second day of her visit to Ghana, Madam Lagarde applauded the Central Bank for putting in place reformative measures to strengthen the banking sector, including the revocation of licenses of some seven Banks.

She argued that such bold steps are needed to make that banking sector a robust one.

“There is scope to increase resilience in the financial sector. We have recently seen the closure of some seven Banks in the last twelve months. These are courageous steps to boost financial stability and pave the way for financial improvement.”

In 2017, the Bank of Ghana began the reforms when it revoked the licences of two banks, UT and Capital Bank after they were declared insolvent.

Barely a year after, five more banks that were distressed were consolidated into a single bank, The Consolidated Bank Ghana. 

But the IMF boss was of the view the reformative measures are not complete until the Bank of Ghana takes steps to strengthen the non-bank financial sector.

“Clearly the job is not completed, mission not accomplished as there is more to do in the non-bank financial sector.”

Madam Lagarde was in Ghana for two days ahead of the country’s exiting of the IMF at the end of the year 2018.

This is the first time an MD of the Fund has visited Ghana. In 2015, Ghana under the erstwhile Mahama administration sought the assistance of the fund when its debt level was unsustainable.

Ghana is yet to receive the final tranche of the $918 million three-year extended credit facility.

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