Ghana's 2017 budget has indicated that the government will work with the Bank of Ghana to increase the minimum capital for commercial banks in Ghana. Increasing the minimum capital should boost the overall capitalization of the banking sector and position several banks to participate in loan syndications to finance key growth sectors and priority project such as the “one factory per district" program.
Currently, the minimum capital requirement for new banks seeking a license is GHS120 million, but no deadline has been set for existing banks to meet the new minimum capital requirement, which explains why several existing banks are operating with a minimum capital that is below GHS120 million.
Increased corporate finance transactions anticipated
Should the government succeed in increasing the minimum capital requirement, several Ghanaian banks would need to raise additional capital in the next 1-3 years to meet the new minimum capital, which could be between GHS200 million and GHS300 million. Such a move is expected to create significant corporate finance transactions for investment banking teams in Ghana within the next 3 years.
Other structural reforms to boost confidence in the banking sector
The government is also keen on enforcing the “single obligor limit for commercial banks" in a bid to ensure that banks only assume risks that their capital allows them to.
Other structural reforms that are expected to be executed in conjunction with the Bank of Ghana to enhance investor confidence and support the growth of the banking sector include
