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The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has stated that the human, health, economic and financial costs of this pandemic continue to rise.
He said Ghana was fortunate that financial sector reforms introduced in the last three years strengthened banks’ balance sheets and improved their solvency.
Delivering the keynote speech at the Ghana Bankers Association (GAB) webinar on the topic: ‘Managing Banking Risk in Uncertain Times: COV ID-19 Test Case’, he said that Ghana’s banking system was in better conditions to absorb the crisis and provide the economy’s financing needs as a result of the reforms, including the recapitalization of banks.
“Second, the government also rushed to implement measures to mitigate the impact of the crisis on the economy. Bold measures, including the COVID-19 Relief and Program to contain the economic burden of the pandemic on households and small businesses, including financial support of GH ¢ 600 million to medium and small businesses, the absorption of bills of water and electricity, tax deductions for frontline workers, among others.
“In the financial sector, the Bank of Ghana introduced policies and regulatory exemptions to support the extension of credit and alleviate potential liquidity constraints in the banking sector that may arise as a result of the pandemic. Among others, the Bank reduced the policy rate by 150 basis points and lowered the macroprudential capital conservation buffer and the cash reserve requirement for banks, as well as reduced the primary reserve ratio of savings and credit companies , financial companies and rural companies. and community banks. The provision for loans in the “OLEM” category was also reduced for both banks and Specialized Deposit Institutions (IDEs).
“To a large extent, these regulatory eases were timely for the banking sector as it navigated unknown paths during the pandemic. The latest assessments have demonstrated the resilience of banks to the first wave of the pandemic backed by strong political support and regulatory measures related to COVID that helped expand lending activities.
