The Governor of the Bank of Ghana, Dr Johnson Asiama, has warned that banks face growing vulnerabilities if they continue to depend heavily on net interest income as their primary source of earnings.

Speaking to chief executives and senior executives of commercial banks in Accra on February 18, 2026, Dr Asiama acknowledged that interest income remains fundamental to banking. He cautioned, however, that an imbalance in revenue structure could expose institutions to avoidable shocks.

“There is nothing inherently problematic about net interest income. However, a high dependence on it increases sensitivity to interest rate cycles and sovereign exposure dynamics.”

His remarks come as Ghana’s monetary landscape steadily returns to stability, a development that is narrowing spreads and pushing down yields on government securities — instruments that have traditionally delivered strong returns for banks.

Dr Asiama indicated that a stabilising rate environment is expected to squeeze profit margins, requiring financial institutions to reassess how they generate income.

“As margins compress in a normalizing rate environment, earnings resilience will increasingly depend on diversification, particularly through transactional banking, trade services, payments, treasury activities, and other fee-based income streams that are less balance-sheet intensive.”

The Governor’s comments reflect a broader regulatory direction aimed at reducing concentration risks, particularly those linked to sovereign instruments, while encouraging banks to build stronger non-interest revenue streams.

The meeting forms part of the central bank’s ongoing supervisory engagements designed to reinforce financial stability and position Ghana’s banking sector to withstand shifting macroeconomic conditions.

African banks are expected to experience their strongest loan growth by the end of 2026, driven by rising demand from businesses and individuals, as well as reduced government borrowing, according to UK-based Fitch Solutions.

The firm noted in its article “Sub-Saharan Africa Banking Key Themes For 2026: Banks Navigate Easing Cycles And Consolidation Trends” that “loan growth will accelerate across SSA’s largest banking sectors and the region will experience the strongest growth rate by year-end. This acceleration reflects pent-up demand, improving economic growth prospects and a reduction in government crowding out as fiscal consolidation efforts ramp up and sovereigns look for alternative sources of financing.”

In recent years, many banking sectors in Sub-Saharan Africa increased their holdings of government securities, attracted by high yields. In some markets, government bonds now account for 20-35% of bank assets, up from 10-15% before the pandemic.

As policy rates fall and bond yields decline, Fitch said banks will face pressure to redirect capital toward private-sector lending to maintain returns. “This transition will be positive for businesses and the economy as more credit becomes available to support growth initiatives,” the firm added.

The shift is expected to be particularly pronounced in markets where governments are pursuing fiscal consolidation, reducing domestic borrowing requirements. Across the region, central banks have also moved toward more accommodative monetary policy. Since February 2025, major central banks have either cut policy rates or held them steady, a trend Fitch expects to continue through 2026.

Ghanaian banks are set to benefit from the end of the Domestic Debt Exchange Programme (DDEP) and the restoration of capital buffers. However, Fitch cautioned that a high level of non-performing loans, which stood at 9.5% in October 2025, may limit profitability going forward.

Fitch concluded that while loan growth is set to accelerate across most markets, banks will need to carefully manage risks associated with bad loans and capital allocation.

Last year, Fitch Solutions projected an annual Gross Domestic Product (GDP) growth to edge up from 5.8% in 2025 to 5.9% in 2026.

According to the UK-based firm, “We expect annual GDP to edge up from 5.8% this year to 5.9% in 2026 as easing price pressures lift private consumption, tempered by fiscal consolidation, slow credit pass-through and a firmer cedi.”

Fitch noted that the slight increase in growth is a result of easing price pressures boosting private consumption, even as fiscal tightening and slower credit pass-through limit the pace of expansion.

The firm’s November 2025 Sub-Saharan Africa Outlook also highlighted robust economic performance this year, with Ghana recording a 6.3% year-on-year growth in the second quarter. This was up from a revised 5.7% in the same period in 2024 and was driven by household consumption, fixed investment, and a significant drop in inflation.

The services sector, encompassing finance, insurance, trade, and education, saw remarkable growth of 9.9% in the quarter compared to just 2% a year earlier, underscoring the sector’s contribution to the country’s economic resilience.

Fitch’s projection signals cautious optimism for Ghana’s economy as it balances fiscal discipline with measures to sustain private sector growth.

In November, Fitch Solutions projected that the Bank of Ghana (BoG) would lower its monetary policy rate to 16.50% by the end of 2026, driven by sustained currency stability and a continued drop in inflation.

At the 2026 PricewaterhouseCoopers (PwC) Post-Budget Forum in Accra, Mike Kruiniger, an Assistant Director at Fitch Solutions, explained that Ghana’s improving macroeconomic outlook creates room for further monetary easing in the year ahead.

“Rates have remained elevated, but the Bank of Ghana launched a decisive easing cycle this summer, cutting by 650 basis points so far — the fastest monetary easing cycle globally this year,” he said.

According to him, inflation’s return to the central bank’s target range, combined with firm foreign exchange inflows and a stable currency, provides the basis for Fitch’s projection that the policy rate will ease to 16.50 percent by the end of 2026.

Ghana’s relatively stable cedi, easing inflation, and robust agricultural performance have earned the country an upgrade in growth by UK-based financial analytics firm, Fitch Solutions.

Fitch, in its September 2025 Monthly Outlook report, lifted its economic growth forecast for the country from 4.2% to 4.9%, citing signs of renewed macroeconomic stability driven by easing inflation, a relatively stable cedi, and resilient agricultural performance.

Highlighting the challenges the economy is still grappling with, such as tight fiscal consolidation, elevated interest rates, and stagnant oil output, the report said Ghana’s economy remains firmly on a recovery path.

The upgrade follows a strong performance in Ghana’s agricultural sector, which boosted the economy’s growth in the first quarter of the year. Between January and March, Ghana’s Gross Domestic Product (GDP) grew by 5.3%, compared to 4.7% recorded during the same period last year.

Fitch believes this growth will continue into 2026, predicting the economy will expand by around 5.0%. This improvement is expected to come from lower inflation (prices rising more slowly), possible interest rate cuts, and more government spending as Ghana’s IMF-supported program comes to an end.