The Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has called for the establishment of a robust and predictable framework to enable financially distressed but viable businesses to be restructured instead of being forced into liquidation.
According to him, Ghana needed a system that would allow banks to support genuine business recovery while safeguarding depositors, preserving financial stability and maintaining prudent lending standards.
Dr Asiama made the call in Accra yesterday at a forum organised by the Bank of Ghana in collaboration with the Chartered Institute of Restructuring and Insolvency Practitioners (CIRIP) Ghana on Non-Performing Loans (NPLs) and Post-Commencement Financing.
The forum was held on the theme: ‘Financing Distressed Companies: The Impact of Non-Performing Loans (NPLs), IFRS 9 Standards, and Prudential Regulations on Post-Commencement Financing for Distressed Companies under Rescue and Possible Interventions.’
“Our objective is not a system that avoids risk. Such a system would finance nothing worth financing. We need a system that understands risk, prices it properly, manages it actively and has the capacity to absorb losses when judgement proves wrong,” he stated.
Dr Asiama explained that although the Corporate Insolvency and Restructuring Act, 2020 (Act 1015), provided a legal framework for rescuing distressed businesses and granted statutory priority to post-commencement financing, the challenge remained translating those provisions into practical financing that banks could confidently provide.
He stressed that rescue financing should only be extended to businesses with credible recovery prospects, backed by realistic restructuring plans, transparent governance and sustainable cash flow projections.
“The need for money is not evidence of viability. Most distressed companies need money. The real question is whether fresh capital can reasonably restore the business to sustainable operations,” he said.
The Governor cautioned that new financing must not be used to conceal existing losses or weaken prudential standards, stressing that impaired facilities must continue to be recognised and adequately provided for under IFRS 9 requirements.
He noted that Ghana’s banking sector had recorded significant improvement, with the industry’s NPL ratio declining from 23.1 per cent in June 2025 to 16.1 per cent in June 2026, while the Capital Adequacy Ratio stood at 20.4 per cent.
Dr Addison called for closer collaboration among regulators, banks, insolvency practitioners and other stakeholders to develop clear operational guidelines for post-commencement financing under Act 1015.
For his part, the President of CIRIP Ghana, Felix Addo, expressed concern that only five companies had sought business rescue under the law since it came into force, describing the figure as disappointing.
He attributed the low patronage largely to the lack of post-commencement financing and limited public awareness of the business rescue regime.
Mr Addo observed that many judges, lawyers, accountants, bankers and business owners were still unfamiliar with the provisions of the law, making continuous public education and professional capacity building essential.
He also renewed calls for the establishment of a specialised bankruptcy court staffed by judges with expertise in insolvency and business restructuring to ensure efficient handling of corporate rescue cases.
Mr Addo further advocated the creation of a national distress fund to support viable businesses undergoing restructuring, saying access to working capital remained the biggest obstacle to successful business rescue.
He expressed optimism that recommendations from the forum would help shape policy reforms capable of strengthening Ghana’s insolvency framework and improving access to post-commencement financing for distressed but viable businesses.
BY KINGSLEY ASARE
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