Fitch: DDEP Close Boosts Ghana Banks but NPLs Limit Profit

Ghanaian banks are set to benefit from the conclusion of the domestic debt exchange programme (DDEP) and the restoration of their capital buffers, according to Fitch Solutions.

However, the high Non-Performing Loans (NPL) ratio of 9.5% as of October 2025 is expected to constrain profitability in the future.

In its report, “Sub-Saharan Africa Banking Key Themes For 2026: Banks Navigate Easing Cycles And Consolidation Trends”, Fitch Solutions anticipates more accommodative monetary policies, which will likely lead to an acceleration of loan growth across most markets in 2026.

“We forecast loan growth will accelerate across SSA’s largest banking sectors, and the region will experience the strongest growth rate by year-end. This acceleration reflects pent-up demand, improving economic growth prospects, and a reduction in government crowding out as fiscal consolidation efforts ramp up and sovereigns look for alternative sources of financing,” the report stated.

Over the past few years, many banking sectors in Sub-Saharan Africa have increased their holdings of government securities due to attractive yields. In some markets, government securities now account for 20-35% of bank assets, up from 10-15% pre-pandemic.

As policy rates decrease and securities yields compress, Fitch Solutions noted that banks will face pressure to redeploy capital into private-sector lending to maintain returns. “This transition will be positive for businesses and the economy as more credit becomes available to support growth initiatives”.

This shift is expected to be particularly pronounced in markets where governments are pursuing fiscal consolidation, thereby reducing domestic borrowing requirements.

The monetary policy landscape across SSA’s major banking sectors is shifting decisively toward easing. Since February 2025, central banks in the largest SSA markets have either cut policy rates or held them steady following earlier cuts, and this trend is expected to continue through 2026.

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