By Joshua Worlasi AMLANU
The Bank of Ghana plans to work with commercial banks to develop investment-linked remittance products aimed at channelling a greater share of diaspora inflows into business expansion, infrastructure projects and long-term capital formation, central bank Governor Johnson Pandit Asiama has said.
The initiative forms part of broader efforts by the central bank to leverage improving macroeconomic conditions and a stronger banking sector to support productive economic activity and deepen domestic financial markets.
Speaking at a post-Monetary Policy Committee engagement with chief executives of banks in Accra, Dr. Asiama said the central bank would collaborate with product leads across the banking industry and other stakeholders to strengthen mechanisms that convert remittance inflows into investments rather than consumption.
“By creating innovative investment-linked remittance products, we can mobilise a larger share of these flows toward business expansion, infrastructure development and long-term capital formation,” the governor said.
He added that such efforts would help deepen financial markets, strengthen economic resilience and support sustainable growth.
The move comes as the country’s external position continues to strengthen. The country recorded a current account surplus of US$3.1 billion in the first quarter of 2026, supported by strong export earnings from gold and cocoa as well as stable remittance inflows. Gross International Reserves rose to US$14.4 billion, equivalent to 5.7 months of import cover, providing a stronger buffer against external shocks.
The proposal also aligns with the central bank’s broader push for banks to increase support for productive sectors of the economy as macroeconomic stability improves.
Dr. Asiama urged lenders to focus on their core intermediation role by directing more capital toward manufacturing, agriculture, services and export-oriented businesses. He said the long-term sustainability of the financial system depends on the performance of the real economy, which generates quality credit demand, employment and sustainable growth.
The governor encouraged banks to take advantage of declining interest rates, advances in financial technology and a more stable economic environment to develop innovative financial products tailored to households and businesses.
He also called on lenders to expand their role beyond financing by providing business advisory services, supporting entrepreneurship and helping firms access new markets. Banks, he said, should establish export support initiatives that leverage relationships with parent companies, subsidiaries and strategic partners operating in other jurisdictions.
The remittance initiative was announced against the backdrop of an economy that the central bank says remains resilient despite uncertainties in the global environment.
The Monetary Policy Committee recently kept the policy rate unchanged at 14 percent, citing broadly balanced risks to inflation and growth.
According to Dr. Asiama, the decision was intended to preserve price stability while supporting the recovery in economic activity and private-sector credit growth.
Inflation remains subdued by historical standards. Headline inflation rose marginally to 3.7 percent in May from 3.2 percent in March, marking the first consecutive monthly increases since December 2024. However, core inflation continued to decline, suggesting underlying price pressures remain contained.
Economic activity has accelerated sharply. The Bank of Ghana’s Composite Index of Economic Activity expanded by 12.6 percent in March, compared with 2.3 percent in the same period a year earlier. Growth was supported by stronger private-sector credit, industrial production, trade and consumption.
Fiscal conditions have also improved. Expenditure controls and fiscal discipline helped Ghana record a fiscal surplus of 0.1 percent of gross domestic product in the first quarter, exceeding programme expectations.
The banking sector has shown signs of strengthening alongside the macroeconomic recovery. Total industry assets increased by 26.6 percent year-on-year to GH¢493.9 billion, while the Capital Adequacy Ratio rose to 22.3 percent from 17.5 percent a year earlier. The non-performing loan ratio declined to 18.0 percent from 23.6 percent, reflecting gradual improvements in asset quality.
Still, Dr. Asiama cautioned that elevated credit risks remain a concern and urged banks to strengthen underwriting standards and recovery processes while complying with regulatory measures aimed at reducing bad loans.
The central bank has also continued to advance regulatory reforms designed to strengthen the resilience of the financial system. Earlier this year, it issued six exposure drafts covering liquidity risk management, stress testing, recovery planning and capital adequacy assessment frameworks for industry consultation.
The governor said the challenge for policy-makers and financial institutions is to transform macroeconomic stability into broader economic prosperity. Mobilising remittance inflows into investment vehicles, alongside stronger bank financing for productive sectors, could provide an additional source of long-term capital needed to support business growth, exports and economic development.
“The challenge before us is not merely to preserve stability but to transform stability into prosperity,” Dr. Asiama said.
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