The financial sector clean-up exercise in Ghana is far from over, with an additional GH₵10.45 billion still required to address remaining legacy issues and emerging risks.
This is despite the government having already spent GH₵30.3 billion by the end of 2024 in an attempt to restore stability.
Finance Minister Dr. Cassiel Ato Forson made this revelation in the 2025 Budget Statement and Economic Policy of the government, underscoring the persistent struggles within the sector.
According to Dr. Forson, the GH₵30.3 billion expenditure included GH₵26.9 billion allocated to banks, Savings & Loans companies, Financial Houses, Microfinance Institutions, and Asset Management companies.
An additional GH₵3.3 billion was spent on Ghana Amalgamated Trust Plc (GAT), National Investment Bank (NIB), and Consolidated Bank Ghana (CBG).

NIB, ADB require GH¢2.2bn
In addition, an amount of GH¢2.2 billion is required to fully capitalise NIB and ADB
Despite these significant expenditures, the impact of the financial sector reforms remains negligible, raising concerns about the sector’s long-term viability.

Lingering issues from the financial sector bailout
Dr. Forson noted that by December 2020, the government had completed the bailout process for depositors of banks and specialized deposit-taking institutions whose licenses were revoked.
However, the bailout for investors of the defunct Asset Management Companies (AMCs) remains unresolved, stretching into 2025.
A major factor affecting the financial sector was the Domestic Debt Exchange Programme (DDEP) introduced in 2022, which had a profound impact on financial institutions’ balance sheets.
In response, the government established the Ghana Financial Stability Fund (GFSF) to cushion the sector from the negative effects of the debt restructuring.
This fund was designed to provide solvency and liquidity support, with an estimated total resource envelope of GH₵22.8 billion (US$1.5 billion) under the International Monetary Fund (IMF)-supported Programme.

Disbursement and utilization of GFSF
By the end of December 2024, the government had released GH₵5.7 billion in recapitalization bonds to operationalize the solvency window (Fund A2) of the GFSF.
This fund primarily targeted state-owned and indigenously owned financial institutions, with GH₵5.47 billion disbursed to 11 financial institutions, including four banks, four capital market operators, and three insurers.
The Fund A2 is managed by a nine-member Investment Committee, chaired by the Ministry of Finance. Its primary objective is to assess the impact of financial support on beneficiary institutions.
Another fund, Fund A1, comprising a US$250 million loan facility from the World Bank, is intended to provide further support to banks and specialized deposit-taking institutions.
However, this facility has yet to receive parliamentary approval, delaying its operationalization.

GH₵4.86bn allocated to banks
Several financial institutions have benefited from the recapitalization efforts under the GFSF.
Consolidated Bank Ghana (CBG) received GH₵2.5 billion in equity, while the Social Security and National Insurance Trust (SSNIT)/Cal Bank Plc was allocated GH₵250 million.
The Agricultural Development Bank Plc received GH₵1.86 billion in equity, and Prudential Bank secured GH₵250 million.
The total recapitalization allocation for these institutions amounted to GH₵4.86 billion.


GH₵323.7m disbursed to insurance firms
Insurance companies were also among the beneficiaries of the financial stabilization measures. SIC Life Insurance Company received GH₵250 million in equity, Vanguard Life Assurance secured GH₵27.6 million, Best Assurance was allocated GH₵32.9 million, and an additional GH₵13.2 million was disbursed as loans, bringing the total support for the insurance sector to GH₵323.7 million.

GH₵290m allocated to collective investment schemes
In addition, the government advanced GH₵290 million in loans to collective investment schemes.
The breakdown of this funding includes GH₵5 million for Fidelity Fixed Income Trust, GH₵106.4 million for EDC Ghana Fixed Income Trust, GH₵11.1 million for Stanbic Income Fund Trust, and GH₵167.5 million for Databank Plc.

GH₵8.55bn allocation
Out of the total GH₵8.55 billion earmarked under Fund A1 and Fund A2 to support financial institutions, 64% (GH₵5.49 billion) had been utilized as of December 2024.
However, with Fund A1 (supported by a GH₵2.85 billion World Bank facility) not yet operational, 96.3% of Fund A2’s GH₵5.7 billion allocation has already been used.

The Dire State of National Investment Bank (NIB)
A significant concern within the financial sector is the precarious state of the National Investment Bank (NIB).
The bank’s financial situation presents a substantial fiscal risk to the economy, a fact emphasized in the fourth review document of the IMF-supported Programme.
Under this programme, NIB is required to achieve a positive Capital Adequacy Ratio (CAR) by March 2025 following a capital injection, and it must be fully capitalized by December 2025.

As of December 2023, NIB faced a capital shortfall of GH₵2.3 billion. So far, the government has injected GH₵1.6 billion into the bank, leaving a gap that still needs to be addressed.
The government’s recapitalization efforts remain crucial in ensuring that NIB meets its regulatory obligations and maintains financial stability.

The road ahead: Challenges and uncertainties
Despite the substantial financial commitments made by the government, Ghana’s financial sector continues to struggle with unresolved legacy issues and looming fiscal risks.
The government’s continued support through the Ghana Financial Stability Fund is critical in preventing further instability, but with additional funds still required, the path to a fully recovered financial sector remains uncertain.
The fate of key institutions like NIB hinges on meeting IMF-mandated requirements, while the delayed operationalization of the World Bank-supported Fund A1 adds another layer of uncertainty.
Going forward, policymakers will need to explore innovative solutions to sustain the sector’s recovery, improve investor confidence, and ensure long-term stability in Ghana’s financial industry.