Ghana Association of Banks (GAB)
The Ghana Association of Banks (GAB) has called on the Bank of Ghana (BoG) to relax stringent limits on international transaction capacities, warning that current restrictions are stifling cross-border trade and undermining confidence in the financial sector.
At a high-stakes meeting this week, GAB pressed the central bank to raise the mandatory reserves lenders must hold in foreign currency accounts (Nostro accounts) and loosen affiliate exposure caps, arguing these measures would unclog a system straining under global commerce demands.
Banks have long grappled with liquidity bottlenecks tied to BoG’s Nostro account thresholds, which dictate how much capital they can park abroad to facilitate transactions like imports, exports, and remittances. With Ghana’s creditworthiness under scrutiny, lenders also face hurdles maintaining correspondent banking relationships—critical lifelines for global trade. GAB insists revising these limits would inject flexibility into the system, enabling smoother transactions for businesses and individuals increasingly tethered to international markets.
“These constraints aren’t just technical—they’re throttling economic growth,” a banking executive privy to the talks remarked anonymously. “Every delayed payment or rejected letter of credit erodes trust in our financial ecosystem.”
BoG Governor Dr. Johnson Asiama acknowledged the sector’s frustrations, pledging to “strike a balance” between financial stability and enabling banks to support cross-border activity. However, he stopped short of committing to immediate reforms, emphasizing the need for “prudent calibration” to avoid systemic risks. Critics argue this cautious stance ignores mounting urgency, as businesses report delayed shipments, inflated transaction costs, and dwindling investor patience.
The talks also tackled broader pain points, including the contentious Cash Reserve Ratio (CRR)—a portion of deposits banks must hold in reserve—and tighter oversight of money transfer operators (MTOs). While the BoG reaffirmed its intent to “review policies holistically,” industry players stress that piecemeal adjustments won’t suffice. “Ghana’s banks are competing in a global arena with one hand tied behind their backs,” said economist Kwame Owusu. “Regulatory agility isn’t a luxury—it’s a survival tool.”
The push comes amid Ghana’s broader economic recalibration, with the government seeking to stabilize the cedi, curb inflation, and restore IMF program credibility. Banks argue that modernizing forex policies and transaction frameworks is pivotal to attracting foreign investment and reviving growth sectors like manufacturing and agriculture, which rely heavily on imported machinery and inputs.
Yet skepticism lingers. Past BoG interventions, including forex retention rules and liquidity support schemes, have yielded mixed results. Meanwhile, households and SMEs—already battered by inflation and high borrowing costs—fear further instability if reforms prioritize institutional liquidity over consumer protections.
For now, the ball rests with the central bank. As Ghana walks a tightrope between fiscal discipline and economic revitalization, the banking sector’s appeal underscores a stark reality: in an interconnected global economy, outdated financial controls risk leaving nations powerless in the race for growth.
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