Omanghana
Banking consultant Dr. Richmond Atuahene has argued that Ghana’s fiscal crisis placed a heavy burden on commercial banks, as unpaid government obligations affected contractors and other businesses that had borrowed from them.
In an analysis published in November 2026, Dr. Atuahene said the banking sector’s difficulties were linked to the government’s failure to meet its financial commitments. He argued that the resulting strain weakened banks’ balance sheets and limited their ability to lend to the private sector.
Government Arrears and Bank Loans
According to Dr. Atuahene, commercial banks extended significant credit to government contractors, independent power producers and energy providers on the assumption that payments associated with state-backed projects were relatively secure.
However, as Ghana faced persistent fiscal deficits, sovereign default and debt restructuring, government payment arrears accumulated. His analysis cited approximately US$1.6 billion in energy-sector arrears and GH¢35 billion in outstanding payments to non-energy contractors.
He argued that when the government failed to pay these obligations, affected businesses struggled to repay their bank loans.
Impact on the Banking Sector
Dr. Atuahene described the situation as a paradox in which the consequences of the state’s financial difficulties were transferred to private banks.
As borrowers were unable to service their loans, banks faced pressure on their assets and capital, restricting their capacity to provide credit to other businesses, he said.
His analysis highlights the connection between public finances and the health of the banking sector, particularly where banks lend to businesses that depend on government payments.
Source: Omanghana
