Players in the banking industry are upbeat about a turnaround in the sector with the assumption of office by President Nana Akufo-Addo.
It also follows a reaffirmation by the President to develop the private sector and propel economic growth.
According to banking Consultant, Nana Otuo Acheampong, the elimination or reduction of some taxes on the financial sector, should reduce the cost of accessing credit and expand the operations of banks.
“If taxes such as the 17.5 percent on financial institutions should be removed, then indeed Ghana will be open up for business because it will mean that the banks will now be able to undertake more business rather than lend with the elimination of that instant tax,” he stated.
In his inaugural speech during his investiture, President Nana Addo said,
“We believe that the business of government is to govern. Ours is to set fair rules. We will provide vision and direction and shine the light down the path of our entrepreneurs and farmers. We are, indeed, counting on a vibrant private sector to drive growth and create jobs.”
He added, “We will reduce taxes to recover the momentum of our economy. The doors of Ghana are open again. The shutters are up again. There could not be a better opportunity to “Make in Ghana”, and to make it in Ghana. Ghana is open for business again.”
Nana Otuo Acheampong further explained to Citi Business News the implementation of the promises by the NPP should translate in a drop in the high Non-Performing Loans (NPLs) among banks in the country.
“One other area which is of importance is the non performing loans…The banks got together and assisted at the energy imports and that loan has been taken over by government and the idea is to repay it over a period of five years.
If this period can be shortened, the shorter it is the more income that will be generated for the banks and then they can use that liquidity to help businesses to also expand.”
The latest financial stability report released by the Bank of Ghana indicates that the Non-Performing Loans of commercial banks had reached 69.4 percent as at July 2016.
The figure shot up from GH¢ 3.6 billion to GH¢ 6.1 billion between 2015 and 2016.
This also translated into an NPL ratio of 19.1 percent, up from 13.1 percent a year earlier.