Accra, Ghana — Ghana’s total net credit flows fell sharply to GH¢8.66 billion in August 2025, down from GH¢14.25 billion recorded in the same period last year, reflecting a tightening credit environment amid portfolio shifts by banks toward government and central bank securities.
The data, captured in the Bank of Ghana’s September 2025 Monetary Policy Report, points to a slowdown in credit creation as both public and private sector lending moderated.
Credit Declines on Portfolio Reallocation
The decline, according to the report, was driven mainly by reduced credit to the public sector, coupled with a moderation in private sector lending.
Commercial banks are increasingly allocating funds toward safer assets such as Government of Ghana bonds and Bank of Ghana bills, a trend analysts say underscores cautious liquidity management within the banking system.
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Private Sector Still Dominates Credit Access
Despite the slowdown, the private sector remained the main beneficiary of credit in the economy — accounting for 95.5% of total outstanding credit in August 2025, up from 92.7% in August 2024.
Total private sector credit flows amounted to GH¢10.71 billion, compared with GH¢14.32 billion a year earlier.
The outstanding private sector credit stock stood at GH¢91.03 billion at the end of August 2025, against GH¢80.32 billion during the same period last year.
Sectoral Breakdown: Services Lead Growth
By sectoral distribution, credit was heavily concentrated in the services sector (68.2%), followed by commerce and finance (23.8%) and manufacturing (23.0%).
Economists note that the high concentration of lending in services reflects Ghana’s growing dependence on trade, logistics, and telecommunications — the key drivers of the modern economy.
Modest Real Growth Amid Tight Conditions
In real terms, private sector credit expanded by 1.7% in August 2025, compared to a contraction of 1.1% in the same period last year.
While this represents a modest improvement, the growth remains slightly above trend, suggesting only a marginal rebound in credit appetite among businesses.
Analysts believe sustained recovery in private sector lending will depend on improved macroeconomic stability, lower inflation, and enhanced banking sector liquidity in the months ahead.
Source: Accra Business News
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Samuel Kwame Boadu is a Ghanaian entrepreneur, writer, and digital consultant passionate about creating impactful stories and business solutions. He is the Founder & CEO of SamBoad Business Group Ltd, a dynamic company with subsidiaries in digital marketing, logistics, publishing, and risk management.
