Business confidence in Ghana picked up in 2024 – BoG

The latest confidence surveys conducted in December 2024 showed an improvement in both consumer and business confidence, Governor of the Bank of Ghana, Dr Ernest Addison has said.

He stated that consumer confidence improved largely on account of optimism about future economic conditions.

Addressing the 122nd Monetary Policy Committee (MPC) press conference in Accra on Monday Janury 27, he said “Business confidence also picked up as firms met their short-term targets and expressed positive sentiments about company and industry prospects in line with improving macroeconomic conditions. Ghana’s Purchasing Managers’ Index (PMI), however, declined to 49.4 in December 2024 from 52.5 in the previous month largely due to a slowdown in firms’ operations during the election period.”

In the area of private sector credit, he said the growth continued to increase towards pre-2022 macroeconomic crisis levels, albeit slowly.

Nominal growth in the private sector credit increased to 26.3 percent in December 2024 from 10.7 percent recorded in the corresponding period of 2023. In real terms, credit to the private sector increased by 2.0 percent relative to a 10.2 percent contraction recorded over the same comparative period in the previous year.

In the banking sector, he said the sector continued to be profitable, well-capitalized and liquid. Assets of the banking sector grew by 33.8 percent in 2024.

“Capital Adequacy Ratio (CAR) with reliefs grew marginally to 14.0 percent in December 2024 from 13.9 percent in December 2023. However, CAR without reliefs rose to 11.3 percent in December 2024, higher than the 8.3 percent recorded in December 2023.

“Profits went up in 2024 relative to 2023, but the pace of growth slowed, resulting in the moderation of profitability indicators during the period. In the outlook elevated credit risk remained the main upside risk to the banking sector. The industry’s Non-Performing Loans (NPL) ratio increased to 21.8 percent in December 2024, up from 20.6 percent in December 2023. The resilience of the banking sector in 2024 was supported by improved domestic macroeconomic conditions.”

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