Ghanaian banking sector exposure to government debt hits GH¢190.1 billion

Former Finance Minister Dr. Mohammed Amin Adam has raised concerns regarding the increasing exposure of Ghana’s banking sector to government debt. Between January and July 2026, banking-system holdings of central-government domestic debt rose from GH¢148.7 billion to GH¢190.1 billion, an increase of GH¢41.3 billion. Deposit money banks accounted for GH¢36.2 billion of this rise, increasing their share of domestic debt from 26.5% to 31.9%.

Dr. Amin Adam warned that this deepening sovereign-bank nexus makes the financial sector more vulnerable to government debt restructuring and payment risks, while potentially constraining credit available to the private sector.

Additionally, he questioned the pricing of short-term government securities, noting that the 91-day Treasury bill yield of 4.60% in October 2026 fell below the September inflation rate of 5.2% and the Bank of Ghana’s 14% policy rate. He suggested that such low yields indicate the short-term paper is being priced by captive liquidity demand rather than monetary policy, a sign of financial repression that may fail to reflect actual credit and duration risks.