Credit to the private sector showed considerable improvement, almost back to pre-pandemic levels and broadly in line with the uptrend in economic activities, the Bank of Ghana (BoG) data has shown.
In nominal terms, private sector credit recorded a significant annual growth of 26.5% in April 2022, compared with 6.9%, in April 2021.
In real terms, however, private sector credit grew by 2.3%, due to sustained price pressures, relative to a contraction of 1.5% recorded for the same comparative period.
In terms of new advances, the data shows that credit growth continued to improve, reaching GHC16.4 billion, representing a 56.5% year-on-year growth.
The latest credit conditions survey revealed that banks are however beginning to tighten credit stance on loans to enterprises and households.
Despite the tightening of credit conditions, demand for credit by households and firms continue to remain strong.
Consumer confidence
The latest confidence surveys conducted in April 2022, showed some easing of sentiments. Consumer confidence dipped on account of increases in fuel prices and transportation costs, as well as rising inflation.
Business sentiments also dipped on concerns that price pressures and currency depreciation would adversely impact industry prospects.
The survey findings were broadly aligned with observed trends in Ghana’s Purchasing Managers’ Index (PMI), which reflected declines in both output and new orders.
Banking sector
Developments in the banking sector indicated strong performance, despite the reversal of the COVID-19 regulatory relief measures in March 2022.
Total assets rose to GHC194.3 billion at end of April 2022, which represented 24.8% annual growth, relative to 16.4% growth in the previous year.
The growth was underscored by increased deposits and borrowings.
Total deposits grew by 21.3% to GHC127.2 billion, while borrowings recorded a strong growth of 66.2% to GHC25.9 billion at end of April 2022.
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