The Bank of Ghana (BoG) has announced plans to dispose of its remaining shareholding in the Agricultural Development Bank (ADB) and the National Investment Bank (NIB), as part of efforts to reinforce its role solely as the country’s banking regulator.
The BoG said it cannot be a regulator and player in the banking industry.
The Governor of the Bank of Ghana and Chairman of the Monetary Policy Committee (MPC), Dr Johnson Pandit Asiama, said the central bank’s Board had approved the decision, stressing that it was inappropriate for the BoG to regulate the banking industry while retaining ownership interests in commercial banks.
Dr Asiama made the announcement at the 131st MPC press conference in Accra, where the Committee maintained the Monetary Policy Rate at 14 per cent.
He disclosed that the BoG still held a residual stake of about 13 per cent in ADB and approximately one per cent in NIB, adding that both shareholdings would be sold before the end of the year.
“The Bank of Ghana Board has taken the decision that we should dispose of our remaining shareholding in ADB. With time, and hopefully later this year, that will be done,” he said.
“In the case of NIB, we still have a very small residual shareholding of about one per cent, and that will also be disposed of. The Bank of Ghana certainly will get out of that space. We are a regulator and will continue to be a regulator,” Dr Asiama stated.
On the decision to maintain the policy rate at 14 per cent, the Governor explained that the MPC carefully weighed both upside and downside risks to inflation and economic growth before arriving at its decision.
He noted that the Committee’s decision-making process was based on majority voting by its seven members rather than individual judgement.
“There are factors that pose upside risks and others that pose downside risks. At the end of the day, it is the balance of these factors and where they are tilting that informs the decision,” he explained.
“The decision is not taken by just me. There are seven members of the Committee, and the majority decision becomes binding on all of us. That is why the Monetary Policy Rate has been maintained in the last two MPC meetings,” he added.
Touching on climate-related financial risks, Dr Asiama said the central bank remained committed to ensuring that commercial banks incorporated environmental considerations into their lending decisions.
He said although financial institutions had been given until 2027 to fully implement the BoG’s climate-related regulatory guidelines, recent flooding incidents had underscored the need to treat climate risks with greater urgency.
“The recent flooding has shown that these risks must be taken seriously. As a central bank, we will continue to ensure that environmental concerns are integrated into the credit decisions of commercial banks,” he said.
Commenting on recent surveys indicating a slight decline in consumer and business confidence, Dr Asiama described the development as marginal and attributed it largely to ongoing global economic uncertainties.
“The dip is quite marginal and can even be seen as remaining broadly flat. The global financial shocks are being felt by consumers and businesses alike, and that explains the slight change in sentiment,” he noted.
The Governor reiterated the central bank’s commitment to creating conditions for lower lending rates over time to support private sector growth and job creation.
BY KINGSLEY ASARE