A finance expert affiliated with the Centre for Social Justice (CSJ), Haruna Alhassan, has underscored the urgent need for Ghana's central bank to revise upward the minimum capital requirement for banks.

Speaking at the 13th Leadership Dialogue Series themed "Ghana’s Economy from 2025 – 2028: The Hard Choices," Alhassan highlighted the detrimental impact of debt exchange and currency depreciation on banks' financial strength.

According to Alhassan, the current minimum capital levels, set at GH¢400 million during the Bank of Ghana's recapitalization exercise between 2018 and 2019, have significantly eroded due to cedi depreciation.

What was once equivalent to $100 million has now dwindled to less than $40 million in today's terms, marking a nearly 60% loss in capital value for Ghana's banking sector.

"The existing minimum capital requirements no longer suffice for banks to independently finance critical projects," stated Alhassan, stressing the necessity for a recalibration to bolster the sector's resilience. He cautioned against a uniform approach to setting new capital thresholds, recognizing varying capacities among banks.

Alhassan also addressed Ghana's foreign exchange challenges, advocating for stricter controls over reserves to prioritize essential imports amid the cedi's steep depreciation.

The Ghanaian currency has experienced a notable 14% decline against the dollar by May 2024, exacerbated by supply shortfalls in forex markets.

He criticized excessive spending on non-essential imports like artificial and human hair, emphasizing the need to redirect resources towards vital machinery and equipment imports crucial for economic development.

The Leadership Dialogue Series, a flagship event of CSJ aimed at fostering civic education and political engagement, provided a platform for Alhassan to delve into these critical economic issues.

His proposals come amidst widespread economic concerns in Ghana, including high inflation rates and a sluggish economy, which have dampened business confidence and growth prospects.

Georgina Danso, a Ghanaian businesswoman, echoed these sentiments during the event, highlighting the detrimental impact of economic instability on local enterprises.

She urged the incoming government to take decisive action to inspire confidence and stimulate economic recovery, emphasizing the need for substantive measures over rhetorical assurances.

The current economic challenges faced by Ghana, including inflationary pressures and currency volatility, have sparked debates over the government's economic policies and management practices.

While external factors like the Russia-Ukraine war and the Covid-19 pandemic have been cited as contributing factors, critics argue for more robust economic strategies and accountability measures to mitigate ongoing hardships.