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BANK OF GHANA
MONETARY POLICY REPORT


July 2024
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The Monetary Policy Report highlights the economic and financial sector assessments that the Monetary Policy
Committee (MPC) considered prior to the policy decision during the 119th meeting held in July 2024.
Monetary Policy Objective in Ghana
The primary objective of the Bank of Ghana is to ensure stability in the general level of prices which has been defined
as maintaining inflation over the medium term , within a band of 8 2 percent. Without limiting the primary objective,
the Bank is also expected to support the general economic policy of the government, promote economic growth and
development, foster the effective and efficient operation of the banking and credit system; and contribute to the
promotion and maintenance of financial stability.

Monetary Policy Strategy
To achieve the objective of price stability, Bank of Ghana was granted operational independence to use whichever
policy tools it sees appropriate to stabilise inflation around the target band. The Bank of Ghana’s framework for
conducting monetary policy is Inflation Targeting (IT), in which the central bank uses the Monetary Policy Rate
(MPR) as the primary policy tool to set the monetary policy stance and anchor inflation expectations in the economy.

The MPC Process
The MPC is a statutorily constituted body established by the Bank of Ghana (Amendment) Act, Act 2016 (Act 918) to
formulate monetary policy. The MPC consists of seven members – five from the Bank of Ghana (including the
Governor who is the Chairman) and two external members appointed by the Board of the Bank. The MPC meeting
dates are determined at the beginning of each year. The MPC meets bi-monthly to assess economic conditions and
risks to the inflation outlook, after which a policy decision is made on positioning the MPR. Each decision signals a
monetary policy stance of tightening (increase), easing (decrease) or no change (stay put). The policy decision is
arrived at by consensus with each member stating reasons underlying a preferred MPR decision. Subsequently, the
decision is announced at a press conference held after each MPC meeting and a press release issued to financial
markets and the public.

©Research Department, Bank of Ghana MPC Report – July 2024
www.bog.gov.gh


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Table of Contents


Monetary Policy Report, BOG Research Department – July 2024

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Overview

Global growth outturn was better than expected in the first half of the year. This unexpected growth was due to improvements
in the services sector in the Euro Area, as well as increased consumer spending and policy support in China, which offset the
continued weaknesses in the property sector. The IMF World Economic Outlook projects growth at 3.2 percent for 2024 and at
3.3 percent for 2025.

Tight global financing conditions have persisted, underpinned by a cautious approach to rate cuts in advanced countries.
The tight monetary policy stance by central banks in advanced economies has broadly led to higher long-term bond yields and
triggered exchange rate pressures in Emerging Market and Developing Economies (EMDEs).

Global headline inflation remains on a downward trajectory, although the disinflation process is expected to slow. The
decline in headline inflation in several countries, observed in the first half of the year, was on the back of the sustained tight
monetary policy stance by most central banks and broadly anchored inflation expectations. In the outlook, strong nominal wage
growth, which may de-anchor inflation expectations in the short term, is expected to pose some risks to the disinflation process.

On the domestic front, provisional GDP growth for the first quarter of the year pointed to a strong growth recovery. The
latest release by the Ghana Statistical Service showed real GDP growth at 4.7 percent in the first quarter of 2024, higher than the
3.1 percent recorded in the same period of 2023. The Bank’s high frequency real sector indicators, which provides a leading
indicator of future GDP growth outcomes, reflected a pickup in economic activity. In May 2024, the updated real CIEA recorded
an annual growth of 3.3 percent, compared to a contraction of 3.7 percent in May 2023.

Recent price developments suggest a resumption of the disinflation process. In June 2024, headline inflation eased to 22.8
percent, from 23.1 percent in May, and 25.0 percent in April. The decline in headline inflation was attributed to a deceleration in
non-food inflation by 2.0 percentage points to 21.6 percent in June. Food inflation, on the other hand, increased by 1.4 percentage
points to 24.0 percent over the same period. The Bank’s main core inflation measure, which excludes energy and utility items from
the consumer basket, declined to 22.1 percent in June 2024, from 22.6 percent in May.

Fiscal policy implementation so far has been on track and aligned with the programme. Staying on the course of the fiscal
consolidation path for the rest of the year should lock -in stability in the overall macroeconomic conditions.

Reserve build-up has been strong in the first half of the year. The external payments position improved in the first half of the
year. The current account surplus significantly improved, aided by strong gold exports, robust remittances, and the effect of the
debt suspension. This development, along with the Domestic Gold Purchase Programme, helped reserves accumulate faster than
envisaged under the IMF-supported programme.

The Ghana cedi came under pressure in the first half of the year. From the beginning of the year to 19th July 2024, the Ghana
cedi depreciated by 19.6 percent against the US dollar, compared with 22.1 percent for the same period last year. The cedi’s
performance has improved recently, reflecting the continued tight monetary policy stance, implementation of the dynamic Cash
Reserve Ratio (CRR) to mop excess liquidity, revised regulations on advanced payments for imports by the Bank, and positive
sentiments from the release of the second tranche of the IMF Extended Credit Facility and agreement in principle with external
creditors.


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1. Global Economic Developments

1.0 Highlights
Notwithstanding the fact that the global economy continues to show signs of strengthening, headwinds to growth
remain. The pace of disinflation is expected to slow, reflecting persistent services inflation in an environment
characterized by tight labour markets that are adjusting only gradually. Financial conditions are easing, supported
by buoyant corporate valuations despite the relatively high interest rates. Interest rate differentials have triggered
exchange rate depreciation in some EMDEs, making their central banks cautious about rate cuts.

1.1 Global Growth Developments
Global economic growth surprised on the upside in many countries in 2024Q1, although there were some notable
downside surprises as well. Economic activity moderated in the US due to the weakening of consumption spending
and negative contribution from net exports. Cooling of labour markets, weak nominal wage growth, and diminished
stocks of excess savings in the US contributed to the moderation in consumption spending. Expansion in the Euro Area
and the UK were led by improvements in services activity. Potential swings in economic policy due to elections in
several countries in 2024 have heightened global uncertainties. As a result, global consumer spending, which
underpinned the post-COVID recovery, remained subdued at the close of the second quarter of the year. High frequency
indicators such as the PMI point to the likelihood of slower expansion in the months ahead. The latest IMF World
Economic Outlook growth projections are unchanged at 3.2 percent in 2024 and slightly higher at 3.3 percent in 2025.
For Emerging Market and Developing Economies (EMDEs), growth has been revised upwards to 4.3 percent in both
2024 and 2025, driven by strong activity in China and India.

Table 1.1: Global Growth Projections (%)

Source: IMF, WEO April 2024, Update

Estimates

World
3.3
3.2
3.3
Advanced Economies
1.7
1.7
1.8
United States
2.5
2.6
1.9
Euro Area
0.5
0.9
1.5
Germany
–0.2
0.2
1.3
France
1.1
0.9
1.3
Italy
0.9
0.7
0.9
Spain
2.5
2.4
2.1
Japan
1.9
0.7
1.0
United Kingdom
0.1
0.7
1.5
Canada
1.2
1.3
2.4
Other Advanced Economies
1.8
2.0
2.2
Emerging Market and Developing Economies
4.4
4.3
4.3
China
5.2
5.0
4.5
India
8.2
7.0
6.5
Russia
3.6
3.2
1.5
Brazil
2.9
2.1
2.4
Mexico
3.2
2.2
1.6
Sub-Saharan Africa
3.4
3.7
4.1
Nigeria
2.9
3.1
3.0
South Africa
0.7
0.9
1.2
Source: IMF, WEO July, 2024, Update
Year over Year
Projections

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1.2 Global Price Developments
Global headline inflation remains on a downward trajectory. However, the pace of disinflation is expected to slow,
reflecting persistent services inflation. Inflation remains above target in many advanced economies and EMDEs,
sustained by relatively strong nominal wage growth and still-elevated short-term inflation expectations. Oil prices are
falling as weaker-than-expected economic data from China in 2024Q2 sparked demand concerns. The FAO food price
index remained unchanged in June, with increases in vegetable oil, sugar, and dairy products being balanced out by a
decrease in the price for cereals. Longer-term inflation expectations remain anchored, reflecting the continued
tightening policy stance of central banks and the gradual decline in headline and core inflation. In the outlook, progress
on disinflation is expected to slow amid the persistence in services inflation and rising manufacturing input costs.


1.3 Global Financial Markets Developments
Global financial conditions are easing, mainly due to buoyant corporate valuations. Central banks in advanced
economies continue to maintain tight policy stance due to persistently high inflation. Consequently, markets’
expectations of the number of policy rate cuts to be delivered in 2024 have been revised downwards. In some EMDEs,
interest rate differentials have triggered exchange rate depreciation, making their central banks cautious about rate cuts.
In addition, longer-term bond yields have drifted upwards, in tandem with repricing of policy paths. Meanwhile, lower
equity risk premia and higher short- and long-term earnings expectations boosted equity markets despite the elevated
geopolitical tensions. In the outlook, financial conditions are expected to remain relatively tight as the risk of elevated
inflation raises the prospects of higher-for-longer interest rates, which in turn could increase external, fiscal, and
financial risks. Also, the slower pace of policy easing could exacerbate financial market volatility and reverse the gains
in the stock market. Emerging market currencies may come under further pressure, with narrowing of interest rate
differentials.


Figure 1.1: Headline Inflation in Advanced Economies (%)

Source: Trading Economics
-2

Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
US
Euro Area
Japan
UK
Figure 1.2: Headline Inflation in Emerging Market Economies
(%)

Source: Trading Economics

-5

China
India
Brazil
Russia
South Africa
Turkey
Turkey on the right axis

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Table 1.2: Monetary Policy Stance of Selected Central Banks

Source: Growth Rate (World Bank); Debt/GDP (IMF) Policy Rates (Trading Economics)

1.4 Currency Markets
On the international currency market, the US dollar strengthened in June but has since weakened as investors anticipate
a rate cut in September, supported by the decline in inflation in June, and softer-than-expected US economic data. The
pressure on the cedi eased somewhat in June from elevated pressures in May. The easing pressure was on the back of
the revised regulations on advanced payments for imports by the central bank, and steadfast implementation of the new
Cash Reserve Ratio (CRR) regime. Also, positive sentiments from the third tranche of the IMF ECF, the breakthrough
with the external debt restructuring, as well as the Fed’s expected rate cut supported the recovery in the cedi. The
domestic currency depreciated by 18.6 percent, 17.9 percent, and 16.0 percent against the dollar, the pound, and the
euro, respectively, on a year-to-date basis. This was against a depreciation of 22.0 percent, 26.3 percent, and 23.8
percent against the dollar, the pound, and the euro, respectively, during the same period in 2023.

In the outlook, the tight monetary policy stance in Ghana and forward guidance on policy rate cuts in some advanced
economies are expected to work through the expectations channel to help ease pressure on the cedi. Also, strong
liquidity management and continued Forex auctions are expected to support the forex market. However, fiscal spending
amid upcoming elections remains an upside risk to the stability of the cedi.


Country
Policy rate -
Previous (%)
Policy Rate
Current (%)
Forecast
Inflation
May, 2024
Inflation
June, 2024
Real rate Infl Target
Overall
Fiscal
Deficit
(2023,%
of GDP)
GDP
Growth
(Dec.2023)
Gross
Debt/GDP
(2023,%)
YTD
Depr/June
17th
U.S


Euro Area

< 2%

UK
5.25
5.25
5.0


Japan

Russia


India

4±2%

Brazil

4.5±1.5%

Turkey

75.45
71.6
-21.6
5±2%

Malaysia


Indonesia

3.5% ± 1%
-1.6

39.9
-4.35
Chile


3±1%

Ghana

23.1
22.8
6.2
8±2%

South Africa

Nigeria

Kenya


Zambia

Morocco


70.6
0.50
Angola

19.5
19.5
30.2


Egypt

7± 2%


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Table 1.3: Interbank Exchange Rates

Source: Bank of Ghana Staff Calculations

The cedi depreciated by 19.9 percent in nominal trade weighted terms, and 22.5 percent in forex transaction weighted
terms, on a year-to-date basis against major trading partners currencies. This is against a depreciation of 30.7 percent,
and 28.6 percent, in nominal trade weighted terms and nominal foreign exchange transaction weighted terms,
respectively, over the same period in 2023.

In real bilateral terms, the cedi depreciated by 11.4 percent, 9.5 percent, and 7.7 percent, against the dollar, the pound
sterling, and the euro, respectively, on a year-to-date basis. For the corresponding period in 2023, the cedi’s real
exchange rate had depreciated by 16.36 percent, 23.03 percent and 18.16 percent against the dollar, the pound sterling,
and the euro, respectively.

The cedi depreciated by 8.4 percent and 11.1 percent in real trade weighted terms and real forex transaction weighted
terms, respectively, on a year-to-date basis. This compares with depreciations of 18.3 percent and 16.6 percent, in real
trade weighted terms and real forex transaction weighted terms, respectively, for the same period in 2023.


US$/GHC*
Monthly
depreciation/a
ppreciation
Year-to-Date
depreciation/
appreciation
GBP/GHC*
Monthly
depreciation/a
ppreciation
Year-to-Date
depreciation/
appreciation
Euro/GHC*
Monthly
depreciation/
appreciation
Year-to-Date
depreciation/a
ppreciation

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

June


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Table 1.4: Nominal Effective Exchange Rate

Source: Bank of Ghana Staff Calculations


Table 1.5: Real Bilateral Exchange Rate

Source: Bank of Ghana Staff Calculations


2021=100
Monthly CHG(%)
Year-to-Date (%)
FXTWI
TWI
FXTWI
TWI
FXTWI
TWI

Jan-23

Feb-23

Mar-23

Apr-23

May-23

Jun-23

Jul-23

Aug-23

Sep-23

Oct-23

Nov-23

Dec-23


Jan-24

Feb-24

Mar-24

Apr-24

May-24

Jun-24

RER Index (Jan.2021=100)
MONTHLY CHANGE (Index)
Year-to-Date (%)
Month
EUR
GBP
USD
EUR
GBP
USD
EUR
GBP
USD

Jan-23

Feb-23

Mar-23

Apr-23

May-23

Jun-23

Jul-23

Aug-23

Sep-23

Oct-23

Nov-23

Dec-23


Jan-24

Feb-24

Mar-24

Apr-24

May-24

Jun-24


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Table 1.6: Real Effective Exchange Rate for Major Trade Partners

Source: Bank of Ghana Staff Calculations

1.5 Global Economic Outlook and Risks
The global economy is showing signs of strengthening, although headwinds to growth remain. The pace of disinflation
is expected to slow, reflecting persistent services inflation. Financial conditions are easing somewhat, supported by
buoyant corporate valuations, but risks remain while interest rate differentials have triggered exchange rate
depreciation in some EMDEs. Risks to inflation from the external environment are elevated. Policy rates in advanced
economies are expected to remain higher-for-longer due to the persistence in headline inflation, which may sustain the
pressure on EMDE currencies. Elections in many countries this year have heightened uncertainty.


Month
INDEX (2021=100)
MONTHLY CHG
Year-to-Date (%)
RFXTWI
RTWI
RFXTWI
RTWI
RFXTWI
RTWI

Jan-23

Feb-23

Mar-23

Apr-23

May-23

Jun-23

Jul-23

Aug-23

Sep-23

Oct-23

Nov-23

Dec-23


Jan-24

Feb-24

Mar-24

Apr-24

May-24

Jun-24

RTWI and FXRTWI

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2. External Sector Developments

2.0 Highlights
The external payments position improved in the first half of the year. The current account recorded a surplus which
was significantly higher than same time last year. The improvement was supported by strong gold exports, robust
remittances. This development, along with the Domestic Gold Purchase Programme, helped with a faster reserves
accumulation.

2.1 Commodity Price Trends
Cocoa futures bounced back in June, reaching US$9,022.6 per tonne after a drop of 19.2 percent in May. Tight supply,
spurred by extreme weather conditions and diseases amid increasing demand, supported the price increase. From
January to June 2024, cocoa prices soared by 113.02 percent, mainly on the back of tight supply.

Crude oil prices were broadly stable in June, gaining just 0.01 percent to settle at an average price of US$83.01 per
barrel. Prices were supported by escalating geopolitical tension in Europe and Middle East, notwithstanding OPEC+’s
decision to boost supply later in the year. Since January 2024, crude oil prices have increased by 7.4 percent, mainly
on concerns about supply disruptions due to geopolitical tensions and the planned output cut by OPEC+.

Spot gold dropped marginally by 1.1 percent to close at an average price of US$2,325.34 per fine ounce in June 2024.
Gold prices were weighed down by a rising US dollar and increasing Treasury yields but losses were moderated by
safe-haven demand amid tensions in the Middle East and rising bets that the U.S. Federal Reserve might reduce interest
rates later in the year. From the beginning of the year to date, gold prices have increased by 14.2 percent, largely
explained by expectation of rates cuts by the Fed, and geopolitical tension that boosted the safe haven appeal of the
metal.

2.1.1 Commodity Price Index
Prices of Ghana’s key export commodities increased on the global commodities market. The weighted average price
of the three major commodities exported by Ghana (cocoa, gold, and crude oil) increased in the month of June 2024.
The index rose to 196.68 from 190.74 in the previous month, representing an increase of 3.1 percent. The increase was
on account of a rise in the cocoa and crude oil sub-indices, which was enough to outweigh the fall in the gold subindex. The cocoa sub-index grew by 11.1 percent while the crude oil sub-index remained almost unchanged at 0.01
percent and the gold sun-index fell by 1.1 percent.


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2.2 Trade Balance
The trade balance recorded a provisional surplus of US$1.81 billion in the first half of the year, higher than the surplus
of US$1.60 billion recorded in the corresponding period of 2023. The improved trade surplus resulted from a higher
increase in exports relative to imports. Total exports increased by US$1.09 billion (13.4%) to US$9.23 billion, mainly
on the back of strong growth in gold and crude oil exports. The value of gold exports increased by 46.4 percent to
US$5.04 billion, driven by both volume and price increases. The volume of gold exports increased by 28.9 percent to
2.4 million ounces, driven largely by higher output from small-scale mining, while realized prices of gold increased
by 13.6 percent to US$2,094.5 per fine ounce. Earnings from crude oil exports reached US$1.98 billion, from US$1.66
billion in the same period last year. Receipts from cocoa exports, both beans and products, declined by 47.4 percent,
from US$1.454 billion in the first half of 2023, to US$760 million in the first half of 2024. The sharp drop in the value
of cocoa exports reflected the challenges in the cocoa sector, including extreme weather conditions, diseases and
smuggling. The value of “other exports” (including non-traditional exports) went down by 8.7 percent to US$1.5
billion.

The total imports bill rose by 13.5 percent to US$7.42 billion in the first half of the year, driven by both oil and nonoil imports. Oil imports increased by 6.1 percent to US$2.30 billion, with non-oil imports increasing by 17.2 percent
to US$5.12 billion.

2.3 Current Account
Provisional data for the first half of the year showed a current account surplus of US$1.28 billion, representing a 48.2
percent increase over the surplus of US$863.04 million recorded during the same period in 2023, due largely to an
improved trade surplus, and higher remittance inflows. Net remittance flows for the review period increased by 33.2
Figure 2.1: International Cocoa Prices (US$/metric tonnes)

Source: Reuters

Figure 2.2: International Brent Crude Oil Prices (US$ per barrel)

Source: Reuters

Figure 2.3: International Gold Prices (US$ per ounce)
Source: Reuters
Figure 2.4: Commodity Price Index

Source: BOG Staff Computations

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percent to US$2.69 billion. Net income payment and payment for services, however, increased by 20.1 percent and
13.6 percent, respectively, to US$1.23 billion and US$1.98 billion.

2.4 Capital and Financial Accounts
In the capital and financial account, net outflows reduced from US$1.04 billion in the first half of 2023 to US$368
million in the first half of 2024. The lower capital outflows recorded is due to higher government loan disbursements,
reduced amortizations, and lower portfolio outflows. “Other capital”, including private capital, recorded a net outflow
of US$1.61 billion, compared to an outflow of US$1.13 billion for the same time in 2023. The current account surplus,
together with the reduced capital outflows, resulted in an overall Balance of Payments (BOP) surplus of US$942.3
million in the first half of 2024, compared to a deficit of US$341.0 million for the same period in 2023.

2.5 International Reserves
Gross international reserves (GIR) at the end of June 2024 stood at US$6.87 billion, equivalent to 3.1 months of import
cover. Meanwhile, GIR (excluding encumbered and petroleum assets) was US$4.52 billion. This compares with a GIR
stock of US$5.92 billion and GIR (excluding encumbered and petroleum assets) of US$3.68 billion at the end of
December 2023.

2.6 Commodity Price Outlook
With the onset of a new crop season portending larger crop sizes in Ghana and Cote d’Ivoire, the cocoa market is
expected to be calm and cocoa prices could potentially decrease. Prices will, however, remain high relative to the prespike level. The ongoing geopolitical tensions in the Middle East and the expectation of continued production restraint
by some OPEC+ producers may continue to lend some support to oil. Gold prices may suffer losses as we move closer
to possible Fed rate cuts in the second half of the year.

Table 2.1: Trade Balance (US$ million)

Source: Bank of Ghana

Prov 2024
Abs Y/Y
Rel Y/Y
Jan - Jun
Jan - Jun
Jan - Jun
Jan - Jun
Chg
Chg
Trade Balance ( US$'M)

Total Exports ( US$'M)

Gold ( US$'M)

Volume (fine ounces)

Unit Price (US$/fine ounce)

Cocoa Beans (US$'M)

Volume (tonnes)

Unit Price (US$/tonne)

Cocoa Products (US$'M)

Volume (tonnes)

Unit Price (US$/tonne)

Crude Oil (US$'M)

Volume (barrels)

Unit Price (US$/bbl)

Other Exports

o/w Non-Tradional Exports

Total Import (US$'M)

Non-Oil

Oil and Gas

of which: Products

Gas (US$'M)


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3. Real Sector Developments

3.0 Highlights
The GDP growth outturn for the first quarter of 2024 was stronger than expected. Economic activity remained resilient
in the context of a generally tight policy stance. This is reflected in the latest GDP data released by the Ghana
Statistical Service which showed a growth of 4.7 percent in Q1:2024 and a revision of the overall growth for 2024 to
3.1 percent, from an earlier projection of 2.8 percent. Similarly, recent high frequency indicators of economic activity
suggested stronger growth outcomes. Consumer and business confidence sentiments softened, driven by the rapid
exchange rate depreciation observed in May and high food prices in June 2024.

3.1 Economic Growth
The latest data from the Ghana Statistical Service showed that real GDP grew by 4.7 percent in the first quarter of
2024, compared with 3.1 percent recorded in the corresponding quarter of 2023. Non-oil GDP growth was 4.2 percent,
compared with 4.4 percent in the same period of 2023. The observed growth outturn was largely driven by a strong
rebound in the industry sector, which grew by 6.8 percent, having contracted by 1.4 percent in the corresponding period
of last year. The agriculture and services sectors grew by 4.1 percent and 3.3 percent, respectively.


Figure 3.1: Quarterly GDP Growth (y/y, %)

Source: Ghana Statistical Service

3.2 Trends in Real Sector Indicators
Consumer Spending
Consumer spending, proxied by domestic VAT collections and retail sales, posted a positive performance in May 2024
compared with the corresponding period in 2023. Domestic VAT collections increased by 28.7 percent on a year-onyear basis to GH¢1.36 billion. Cumulatively, total domestic VAT for the first five months of 2024 went up by 14.8
percent to GH¢6.22 billion, compared with GH¢5.42 billion for the corresponding period of last year.

Retail sales increased by 25.5 percent (year-on-year) to GH¢200.27 million in May 2024, up from the GH¢159.57
million recorded in the same period in 2023. On a month-on-month basis, retail sales improved by 6.0 percent in May
2024, from GH¢188.87 million in the preceding month. In cumulative terms, retail sales for the first five months of
2024 went up by 19.1 percent.

Oil GDP (%)
Non-Oil GDP

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Manufacturing Activities
Activities in the manufacturing sub-sector, gauged by trends in the collection of direct taxes and private sector workers’
contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1), improved in May
2024. Total direct taxes increased by 43.7 percent (year-on-year) to GH¢4.11 billion in May 2024, relative to GH¢2.86
billion recorded in May 2023. Cumulatively, total direct taxes collected for the first five months of 2024 went up by
31.6 percent to GH¢22.19 billion, compared to ¢16.86 billion recorded in the first five months of 2023. In terms of
contributions of the various sub-tax categories, income tax (PAYE and self-employed) accounted for 48.8 percent,
corporate tax accounted for 38.4 percent, while “other tax sources” contributed 12.8 percent.

Total private sector workers’ contribution to the SSNIT Pension Scheme (Tier-1) increased by 39.6 percent in yearon-year terms to GH¢470.92 million in May 2024, relative to GH¢337.23 million collected during the corresponding
period in 2023. Cumulatively, for the first five months of 2024, the contribution grew by 28.8 percent to GH¢1.97
billion, relative to GH¢1.53 billion recorded in the same period in 2023.

Construction Sector Activities
Activity in the construction sub-sector, proxied by the volume of cement sales, increased by 10.6 percent (year-onyear) to 235,050.55 tonnes in May 2024, up from 212,584.38 tonnes recorded a year ago. On a month-on-month basis,
total cement sales increased by 13.2 percent in May 2024 compared with the 207,691.74 tonnes recorded in April 2024.
However, for the first five months of 2024, sales declined marginally by 2.3 percent to 1,132,654.32 tonnes, from
1,158,854.69 tonnes for the same period of 2023. The relative improvement in total cement sales, year-on-year, was
due to an uptick in construction activities during the review period.

Vehicle Registration
Transport sector activities, gauged by new vehicle registrations by the Driver and Vehicle Licensing Authority
(DVLA), increased year-on-year by 36.1 percent to 16,220 in May 2024. Cumulatively, the number of vehicles
registered by the DVLA within the first five months of 2024 increased by 10.2 percent to 83,878, from 76,115 recorded
a year ago.

Industrial Consumption of Electricity
Industrial consumption of electricity declined marginally by 1.2 percent in May 2024 to 295.71 gigawatts, as against
299.23 gigawatts recorded for the corresponding period in 2023. In cumulative terms, electricity consumed by
industries for the first five months of 2024 decreased by 7.0 percent to 1,399.80 gigawatts, from 1,505.47 gigawatts
for the corresponding period a year ago.

Passenger Arrivals
Passenger arrivals improved by 12.7 percent in year-on-year terms to 98,205 in May 2024, up from 87,156 arrivals
recorded a year ago. Compared to April 2024, passenger arrivals went up by 8.1 percent. For the first five months of
2024, there were 497,048 arrivals recorded at the international airports and the land borders, compared with 419,206
for the corresponding period in 2023, representing a growth of 18.6 percent.

Ports and Harbours Activity
International trade at the country’s two main harbours (Tema and Takoradi), as measured by laden container traffic for
inbound and outbound containers, improved during the period under review. Total container traffic increased by 9.4
percent, year-on-year, to 59,639 in May 2024, up from 54,538 in May 2023. In cumulative terms, total container traffic
for the first five months of 2024 went up by 14.2 percent to 284,745.


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3.3 Labour Market Activity
Private Sector Pension Contributors
Total number of private sector SSNIT contributors, which partially gauges employment conditions, improved by 2.7
percent to 1,007,341 in May 2024, compared with 980,808 for the same period in 2023. Cumulatively, for the first five
months of 2024, the total number of private sector contributors increased by 4.8 percent to 5,063,676, from 4,829,487
recorded over the corresponding period in 2023.

Advertised Jobs
The number of jobs advertised in selected print1 and online2 media, which partially gauges labour demand in the
economy, remained largely unchanged in June 2024 relative to what was observed in the corresponding period a year
ago. In total, 2,968 job adverts were recorded as compared with 2,993 for the same period in 2023. Cumulatively, for
the first half of 2024, the total number of advertised jobs went up by 2.4 percent to 17,278, from 16,866 recorded
during the same period in 2023.

3.4 Composite Index of Economic Activity (CIEA)
The Bank’s updated real Composite Index of Economic Activity (CIEA) recorded an annual growth of 3.3 percent in
May 2024, compared to a contraction of 3.7 percent observed for the same period in 2023. The key growth drivers of
the index over the period were SSNIT contributions from the private sector, imports, port activity, cement sales,
exports, passenger arrivals and domestic VAT.

3.5 Consumer and Business Surveys
The latest confidence surveys conducted in June 2024 indicated some softening of consumer and business sentiments.
The Consumer Confidence Index declined to 81.2 in June 2024, from 87.7 in April 2024, on account of high food
prices and some uncertainties about future economic conditions. Similarly, the Business Confidence Index dipped to
88.8 from 92.6 in the same comparative period as businesses expressed concern about the cost implications of the rapid
exchange rate depreciation observed in May 2024. These findings were broadly in line with observed trends in Ghana’s
Purchasing Managers’ Index (PMI), which fell below the 50.0 benchmark to 49.7 in June 2024, from 51.6 in the
previous month.


1 The Daily Graphic newspaper was used to represent print media because it is the most widely circulated daily in Ghana.
2 These are job adverts posted on the websites of the 10 main online job advertising/employment companies in Ghana.

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Figure 3.2: High Frequency Economic Indicators


Sources: Bank of Ghana, Various Stakeholders
...Domestic VAT collections and retail sales improved in May 2024 compared
to April 2024...
...Labour hiring conditions, proxied by the number of private sector
workers contributing to SSNIT, remained largely unchanged...
...Labour market conditions improved in May 2024 relative to April 2024...
...Construction activities, proxied by cement sales, increased in May
2024 compared to April 2024...
...Port activity went up in May 2024 compared to the previous month...
...Passenger arrivals increased in May 2024 compared to April 2024...

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Cement Sales

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Thousands
Port Activity (Container Traffic)

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Thousands
Passenger Arrivals

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Thousands
Number of Private Sector Contributors to SSNIT
Thousands, tons

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Million, GHC
Million, GHC
Domestic VAT collection and Retail Sales
Retail Sales, Left
Domestic VAT

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Million GHC
SSNIT Contributions from Private Sector
Panel 1:
Ghana's Leading Indicators of Economic Activity

Monetary Policy Report, BOG Research Department – July 2024

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Source: Bank of Ghana, Various Stakeholders
...Commercial banks' credit to the private sector improved in May 2024
relative to the pevious month...
...Industrial activity, proxied by industrial consumption of electricity,
increased...
...Exports improved while imports declined in May 2024 compared to April
2024...

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Million, USD
Imports
Exports
Imports and Exports

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
GWh
Industrial Consumption of Electricity

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Billion, GHC
DMB's Credit to Private Sector


May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Percent, y-o-y
Real CIEA
-16
-8

May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Percent, y-o-y
Cement Sales (Tons)
Port Activity
SSNIT Contr by Pte Sector
Exports
Industrial Cons of Electricity
DMB's Credit to Pte Sector
Imports
Passenger Arrivals
Dom VAT
Real CIEA growth (%)
Contribution to Real CIEA growth

Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
Job Adverts
Panel 2:
Ghana's Leading Indicators of Economic Activity
...On a year-on-year basis, the real CIEA grew by 3.3 percent in May 2024,
compared with a contraction of 3.7 percent in May 2023...
...The growth in the real CIEA was driven by a pick-up in SSNIT contributions from
the private sector, Imports, Port Activity, Cement Sales, Exports, Passenger Arrivals
and Domestic VAT...
...Demand for labour, proxied by the number of job adverts (in print and
online media), remained largely unchanged in June 2024...
Number of advertised jobs

Monetary Policy Report, BOG Research Department – July 2024

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Source: Bank of Ghana, Various Stakeholders
...Business confidence decreased as businesses expressed concern about the
cost implications of the rapid exchange rate depreciation observed in May
2024....
...Vehicle registration increased in May 2024 compared to the month before...
...Consumer confidence declined on account of high food prices and some
uncertainties about future economic conditions...


May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Vehicle Registration
88.8

Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
Index
Business Confidence Index
81.2

Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
Index
Consumer Confidence Index

May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Billion, GHC
Domestic taxes, Direct
...Domestic tax collection decreased in May 2024 compared to April 2024...

2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
2023Q4
2024Q1
Percent
Agricuture
Industry
Services
Annual sectoral real GDP growth rate, y/y

2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
2023Q4
2024Q1
Percent
Oil GDP
Non-Oil GDP
Annual real GDP growth rate, y/y
...Real Oil and Non-Oil GDP grew by 4.7 percent and 4.2 percent respectively
in 2024Q1, compared with growth rates of 3.1 percent and 4.4 percent
respectively in the corresponding period of 2023...
...The Industry, Agriculture and Services sectors all drove growth in 2024Q1,
recording growth rates of 6.8 percent, 4.1 percent and 3.3 percent respectively...
Panel 3:
Ghana's Leading Indicators of Economic Activity
Number of vehicles

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4. Monetary and Financial Developments

4.0 Highlights
Growth in monetary aggregates slowed down in June 2024 relative to June 2023, driven in large part by moderation
in the pace of growth in the Net Domestic Assets (NDA) of the banking sector. In contrast, the Net Foreign Assets
(NFA) of the banking sector expanded considerably. Interest rates broadly showed mixed trends at the short end of the
primary market on year-on-year basis. The GSE Composite Index (GSE-CI) recorded increased year-on-year growth
in June 2024 relative to the corresponding period last year. The shift in demand for equities on the stock exchange
market which led to significant gains on the exchange reflects the adverse shocks to bond prices due to the closure of
the bond market on account of the Domestic Debt Exchange Programme (DDEP). Improvement in profitability of
listed financial institutions also contributed to the demand for stocks during the period.

4.1 Developments in Monetary Aggregates
Money Supply
In June 2024, there was a decline in the annual growth in M2+ relative to the corresponding period of 2023, largely
driven by a slower pace of growth in the Net Domestic Assets (NDA) of depository corporations. The Net Foreign
Assets (NFA) position of the depository institutions, however, improved significantly. Annual growth in M2+ declined
to 34.2 percent in June 2024, relative to 44.4 percent in the corresponding period of 2023. The contribution of NDA
to the growth of M2+ decreased to 10.8 percent from 38.8 percent, while that of NFA increased to 23.5 percent from
5.6 percent over the same comparative period. In terms of annual growth rates, NDA expanded by 10.79 percent percent
in June 2024, relative to 36.9 percent in June 2023, while the NFA expanded by 7,567.3 percent relative to 108.7
percent over the same comaprative period).
The decline in the contribution of NDA to the growth of M2+ was mainly driven by a contraction in the Net Claims
on Government (NCG), and moderated by increased investments in BOG bills and Other Items (Net)(OIN). Analysis
of the components of M2+ showed that the decrease in the growth in M2+ largely reflected in declines in the growth
in currency outside banks, demand deposits, savings and time deposits, and foreign currency deposits in June 2024
relative to same period in 2023.


Figure 4.1a: M2+ Growth and its Sources (% Contributions)

Source: Bank of Ghana

Net Foreign
Assets
Figure 4.1b: Banking Sector NDA and its Sources (%
Contributions)

Source: Bank of Ghana

NCG

Monetary Policy Report, BOG Research Department – July 2024

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Figure 4.2: M2+ and its Components (% Contributions)


4.2 Reserve Money
Growth in reserve money continued to increase in June 2024, partially on the back of the implementation of dynamic
CRR, which induced growth in the regulatory reserves of banks. Reserve Money (RM) grew by 77.8 percent in June
2024, compared with 29.2 percent recorded in the corresponding period of 2023. The introduction of the dynamic CRR
instigated disinvestments of BOG bills and overnight placements by banks to shore up regulatory reserves, reflecting in
injections through sterilisation operations. Net Claims on Government (NCG) contracted, reflecting the lingering impact
of the DDEP on the Central Bank balance sheet, while net claims on DMBs declined on the back of the build-up in
foreign currency deposits with the Central Bank. The contribution of NDA to the growth in RM was 17.6 percent,
compared to 44.5 percent over the same comparative period last year. The NFA of the Central Bank expanded, reflecting
a net build-up in foreign assets, largely driven by inflows from the Gold for Reserves (G4R) programme, forex purchases,
proceeds from the IMF ECF, and the cocoa syndicated loan. The contribution of the NFA to the growth in RM was 60.2
percent in June 2024, relative to a contribution of negative 15.2 percent recorded in the corresponding period of 2023.


Figure 4.3a: RM Growth and Contribution from NFA and NDA (%)

Source: Bank of Ghana

NDA
Figure 4.3b: BoG NDA and its Sources (% Contributions)

Source: Bank of Ghana

NCG

Source: Bank of Ghana

Curr.
Dem. Dep
Sav and Time Dep.
FCDs
Total Liquidity (M2+)

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4.3 Deposit Money Banks Credit Developments
Total Deposit Money Banks’ (DMBs’) credit to the private sector and public institutions increased by 15.5 percent in
June 2024, marginally higher than 15.4 percent recorded in June 2023. Credit to the private sector grew by 17.6 percent
in June 2024, compared to 16.1 percent recorded in the corresponding period of 2023. Private sector credit accounted
for 103.0 percent of the flow in total outstanding credit in June 2024, relative to 94.3 percent recorded in the
corresponding period of 2023. The top five sectors with significant share of credit flows were: services (31.3%); import
trade (19.8%); commerce and finance (14.4%); manufacturing (10.7%); and transport, storage, and communication
(8.9%).

Total Outstanding credit to the private sector at the end of June 2024 was GH¢78.06 billion, compared with GH¢66.37
billion recorded in June 2023. In real terms, credit to the private sector contracted by 4.2 percent, relative to a
contraction of 18.5 percent recorded over the same comparative period last year.


4.4 Money Market Developments
Interest rates broadly showed mixed trends at the short end of the primary market on year-on-year basis. The 91-day and
182-day Treasury bill rates increased to 24.91 percent, and 26.84 percent, respectively, in June 2024, from 21.77 percent
and 24.58 percent in the corresponding period of 2023. The rate on the 364-day instrument decreased to 27.83 percent in
June 2024 from 28.66 percent in June 2023.

The Interbank Weighted Average Rate (IWAR) increased to 28.80 percent in June 2024, from 26.01 percent in June 2023,
consistent with the trajectory of monetary policy rate, and underpinned by sustained liquidity withdrawal from the market.
However, the average lending rates of banks declined marginally to 31.10 percent in June 2024, from 31.15 percent
recorded in the corresponding period of 2023.


Figure 4.4a: Shares in Annual Flow of Credit to the Private Sector (%)
Source: Bank of Ghana

Jun-23
Jun-24
Figure 4.4b: Annual Growth in Real Private Sector Credit (%)

Source: Bank of Ghana


RGPSC

Monetary Policy Report, BOG Research Department – July 2024

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4.5 Stock Market Developments
The Ghana Stock Exchange Composite Index (GSE-CI) increased to 3,829.6 points in June 2024, from 2,808.03 points
recorded in the corresponding period of 2023. This translated into a year-on-year gain of 36.4 percent. The performance
of the GSE-CI was underpinned by improved demand for equities, driven by a shift in investor appetite following the
closure of the bonds market and the recovery in the profitability of listed financial institutions. The main sectors that
contributed to the gains were food and beverages, manufacturing, distribution, finance, IT, ETFund and agriculture.

The GSE-Financial Stocks Index (GSE-FI) closed at 2,115.04 points, reflecting a gain of 25.0 percent, compared to a
loss of 22.3 percent over the same comparative period in 2023. The gain in the GSE-FSI was mainly on the back of
improved profitability of listed financial institutions following sustained periods of losses induced by the impact of the
DDEP.

Figure 4.8: GSE Composite Index

Source: Bank of Ghana


Figure 4.9: GSE Financial Stock Index

Source: Bank of Ghana

Figure 4.5: MPR, Interbank and T-bill Rates
(%)
Source: Bank of Ghana

Jun-...
Aug...
Oct-...
Dec-...
Feb-...
Apr-...
Jun-...
Aug...
Oct-...
Dec-...
Feb-...
Apr-...
Jun-...
MPR
91-Day T-bill rate
Inter-Bank rate
Figure 4.6: Real Interest Rates (%)
Source: Bank of Ghana

Real MPR
Real 91 Day T-bill
Rate
Real Interbank Rate
Real Lending Rate
Figure 4.7: Yield Curve (%)

Source: Bank of Ghana

Jun-23
Jun-24

Monetary Policy Report, BOG Research Department – July 2024

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Total market capitalisation of the GSE at the end of June 2024 was GH¢85.10 billion, representing a year-on-year
growth of 21.2 percent, compared with a growth of 8.3 percent in June 2023. The increase in market capitalization was
mainly driven by the appreciation in share prices in the food & beverages, manufacturing, distribution, finance, mining,
IT and agriculture sectors.

Table 4.1: Performance of Ghana Stock Exchange

Source: Ghana Stock Exchange and Bank of Ghana Staff Calculations

4.6 Conclusion
Developments in key monetary aggregates for June 2024, point to a slowdown annual growth, driven mainly by a
moderation in the pace of growth in the Net Domestic Assets (NDA) of depository corporations. The Net Foreign
Assets (NFA) position of the depository institutions improved significantly, largely on the back of a net build-up in
the foreign assets of Bank of Ghana. Interest rates broadly showed mixed trends at the short end of the money market.
The weighted interbank average rate increased, underpinned by the tight monetary policy stance and sustained liquidity
withdrawals from the market. The Ghana Stock Exchange Composite Index recorded strong gains, reflecting a shift
in the demand for equities due to the adverse shocks to bond prices and the closure of the bonds market on account of
the DDEP. Investor appetite for stocks was also reinforced by the increase in profitability of listed financial institutions.


Y-T-D
Jun-22
Dec-22
Jun-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24

GSE CI

GSE FI

Market Capitalization

Changes
Y-O-Y

Monetary Policy Report, BOG Research Department – July 2024

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5. Banking Sector Developments

5.0 Highlights
The banking sector posted strong performance during the first six months of 2024, on the back of sustained increases
in deposits and other funding sources. The financial soundness indicators remained healthy, with improved solvency,
liquidity, and profitability. The industry’s Non-Performing Loans ratio, however, picked up due to an increase in the
NPL stock as well as a slowdown in the pace of credit growth.

5.1 Banks’ Balance Sheet
Total assets of the banking sector grew by 33.3 percent to GH¢323.2 billion as at June 2024, relative to a growth of
21.2 percent recorded in June 2023. The higher growth in assets was driven by a robust growth in deposits, as well as
the depreciation of the Ghana cedi. Foreign assets grew by 57.6 percent in June 2024, compared to 74.5 percent in June
2023, while domestic assets grew by 31.0 percent in June 2024, up from 17.8 percent growth same period last year.
The share of foreign assets in total assets increased to 10.2 percent from 8.6 percent, while the share of domestic assets
declined to 89.8 percent from 91.4 percent in June 2023.

Investments grew by 19.2 percent to GH¢107.2 billion in June 2024, up from a growth of 11.0 percent in June 2023,
due to a significant growth in both short-term and long-term instruments. The growth in investments reflected a 7.3
percent growth in short-term bills, from a growth of 149.6 percent in June 2023, while long-term investments
(securities) also grew by 28.6 percent in June 2024, having contracted by 23.2 percent in June 2023. The mixed growth
in both bills and securities investments culminated in a reduced share of investments in total assets to 33.2 percent in
June 2024, from 37.1 percent in June 2023.

Gross loans and advances rose by 15.6 percent to GH¢84.5 billion in June 2024, relative to a 15.4 percent growth in
June 2023. Growth in net loans and advances (gross loans adjusted for provisions and interest in suspense) also
moderated to 10.3 percent, from 11.3 percent during the same period last year.

The higher growth in assets was funded by increases in deposits and other funding sources. Deposits remained the
main source of funding for the banking sector, accounting for 76.1 percent share of total assets in June 2024, from 77.4
percent in June 2023. Deposits improved by 31.1 percent to GH¢245.9 billion in June 2024, as against 42.8 percent
growth recorded in June 2023. The foreign currency component of deposits grew by 29.8 percent to GH¢81.2 billion
in June 2024, relative to a growth of 62.5 percent in June 2023, suggesting some currency depreciation effect on the
overall growth in total deposits. Borrowings also picked up by 44.4 percent to GH¢23.2 billion in June 2024, up from
39.1 percent contraction recorded in June 2023. The growth in borrowings reflected an uptick in both short-term foreign
and domestic borrowings while long-term domestic and foreign borrowings contracted. Short-term domestic
borrowings of GH¢15.2 billion at end-June 2024 suggested a growth of 83.0 percent, relative to a contraction of 33.6
percent recorded in June 2023. Long-term domestic borrowing, however, contracted by 17.6 percent in June 2024,
down from a growth of 45.1 percent during the same period in 2023. Short-term foreign borrowings grew by 33.2
percent, after contracting by 75.7 percent in June 2023, while long-term foreign borrowings contracted by 2.5 percent,
from the 16.2 percent contraction registered in June 2023.


Monetary Policy Report, BOG Research Department – July 2024

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Banks’ shareholders’ funds position (comprising paid-up capital and reserves) continued to improve on account of a
rebound in profits across the industry. Total shareholders’ funds grew sharply by 44.9 percent to GH¢32.3 billion as
at end-June 2024, relative to a contraction of 15.1 percent recorded a year ago.

Table 5.1: Key Developments in DMBs’ Balance Sheet

Source: Bank of Ghana


5.1.1 Asset and Liability Structure
The asset structure of the banking industry’s balance sheet in June 2024 reflected banks’ preference for less risky
assets. Cash and bank balances replaced investments as the largest component of total assets, with an increased share
of 35.8 percent in June 2024, from 27.7 percent in June 2023, on account of significant increase in banks’ reserves in
compliance with the new Cash Reserve Ratio (CRR) requirements. Investments (comprising bills, securities, and
equity) was the second largest component of banks’ assets at the end of June 2024, although its share in total assets
declined to 33.2 percent, from 37.1 percent in June 2023. Investments and cash and bank balances together accounted
for 69.0 percent of total assets in June 2024, compared to a share of 64.8 percent in June 2023. Net loans and advances
constituted the third-largest component of total assets, recording a share of 21.4 percent in June 2024, down from 25.8
percent during the same period a year ago. Non-earning assets (fixed assets and other assets) in banks’ total assets
recorded a marginal pickup in share to 9.6 percent, from 9.4 percent during the same period in 2023.

On the liability side, the share of deposits in banks’ liabilities and shareholders’ funds declined marginally to 76.1
percent in June 2024, from 77.4 percent in the corresponding period last year. The share of borrowings rose to 7.2
percent in June 2024, from 6.6 percent a year ago, reflecting the growth in total borrowings during the period. The
share of shareholders’ funds in banks’ liabilities and shareholders’ funds also rose to 10.0 percent, from 9.2 percent,
Jun-23
Apr-24
Jun-24
Jun-23
Apr-24
Jun-24
TOTAL ASSETS
242,399.8

306,785.1

323,177.5

21.2

28.8

33.3

A. Foreign Assets
20,946.3

29,114.9

33,010.0

74.5

47.5

57.6

B. Domestic Assets
221,453.6

277,670.2

290,167.5

17.8

27.1

31.0

Investments
89,971.9

105,930.0

107,211.3

11.0

27.1

19.2

i. Bills
39,895.1

44,903.7

42,796.0

149.6

34.6

7.3

ii. Securities
49,816.9

60,763.4

64,078.7

(23.2)

22.0

28.6

Advances (Net)
62,623.9

62,810.4

69,104.7

11.3

0.9

10.3

of which Foreign Currency
22,049.8

22,602.9

24,333.5

25.8

2.6

10.4

Gross Advances
73,125.3

77,938.6

84,530.0

15.4

7.7

15.6

Other Assets
14,711.8

21,229.5

21,961.5

39.2

42.9

49.3

Fixed Assets
7,457.4

8,401.6

8,582.7

39.4

14.1

15.1

TOTAL LIABILITIES AND CAPITAL
242,399.8

306,785.1

323,177.5

21.2

28.8

33.3

Total Deposits
187,569.2

236,260.2

245,880.2

42.8

28.4

31.1

of which Foreign Currency
62,596.5

75,692.5

81,228.3

62.5

26.0

29.8

Total Borrowings
16,047.5

19,469.0

23,168.3

(39.1)

22.5

44.4

Foreign Liabilities
7,548.2

6,547.5

7,487.5

(47.0)

(19.4)

(0.8)

i. Short-term borrowings
1,869.6

1,999.0

2,490.6

(75.7)

13.4

33.2

ii. Long-term borrowings
4,117.9

3,801.5

4,015.1

(16.2)

(18.7)

(2.5)

iii. Deposits of non-residents
1,543.5

731.4

940.6

(5.8)

(48.6)

(39.1)

Domestic Liabilities
211,700.4

268,542.4

281,979.5

33.6

29.0

33.2

i. Short-term borrowing
8,321.2

12,444.3

15,230.3

(33.6)

55.3

83.0

ii. Long-term Borrowings
1,738.8

1,224.3

1,432.3

45.1

(15.1)

(17.6)

iii. Domestic Deposits
186,025.7

235,528.8

244,939.5

43.4

29.0

31.7

Other Liabilities
15,907.4

19,610.9

21,093.0

(1.0)

19.7

32.6

Paid-up capital
10,432.1

13,033.2

13,023.9

2.6

24.9

24.8

Shareholders' Funds
22,293.7

30,837.7

32,307.2

(15.1)

46.1

44.9

(GH ¢'million)
Y-on-Y Growth (%)

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consistent with the strong growth of shareholders’ funds. The proportion of “other liabilities” was unchanged at 6.8
percent during the review period.


Figure 5.1: Developments in Banks’ Balance Sheet & Asset Quality

Source: Bank of Ghana Staff Calculations

5.1.2 Share of Banks’ Investments
Securities (long-term debt instruments) constituted the largest component of banks’ investment portfolio after its share
rose to 59.8 percent in June 2024, from 55.4 percent in June 2023. The share of short-term bills in total investments,
however, declined from 44.3 percent to 39.9 percent over the same period. The share of equity investments remained
negligible and unchanged at 0.3 percent during the period under review.

5.2 Credit Risk
The industry’s asset quality deteriorated during the first half of 2024 relative to same period in 2023, principally due
to a sharp increase in the Non-Performing Loan (NPL) stock, which accounted for the rise in the NPL ratio. The
elevated credit risk was broad-based, with increases in NPL ratios in all but one economic sector in June 2024 relative
to June 2023.

5.2.1 Credit Portfolio Analysis
The stock of gross loans and advances (domestic and foreign) recorded a growth of 15.6 percent to GH¢84.5 billion at
end-June 2024, as against a growth of 15.4 percent during the same period last year. Private sector credit (comprising
credit to private enterprises and households) posted a higher growth of 17.7 percent to GH¢78.1 billion in June 2024,

Jun-22
Jun-23
Apr-24
Jun-24
Components of Banks' Investments (% share)
Bills
Securities
Shares & Other Equities

Jun-22
Jun-23
Apr-24
Jun-24
Asset Structure of Banks (%)
Cash and Due from Banks
Investments
Net Advances
Others

Jun-22
Jun-23
Apr-24
Jun-24
Liability Structure of Banks (%)
Total Deposits
Total Borrowings
Shareholders' Funds
Other Liabilities

Percent
Components of Banks' Credit Portfolio (%)
Private sector
Public sector

Agric, Forest. & Fishing
Mining & Quarrying
Manufacturing
Construction
Elect., Water & Gas
Commerce and Finance
Transp., Stor. & Commu.
Services
Miscellaneous
Distribution of Credit by Sector (%)
Jun-24
Jun-23

Agric, Forest. &...
Mining &...
Manufacturing
Construction
Elect., Water &...
Commerce and...
Transp., Stor. &...
Services
Miscellaneous

NPL ratio in each Sector (%)
Jun-24
Jun-23

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from 16.1 percent in a similar period a year ago. Public sector credit contracted by 5.0 percent to GH¢6.4 billion at
end-June 2024, down from a growth of 8.9 percent recorded in June 2023. Consequently, the share of private sector
credit in total credit rose to 92.4 percent in June 2024, from 90.8 percent in June 2023, whereas the share of public
sector credit declined to 7.6 percent in June 2024, from 9.2 percent a year earlier.

In terms of sectoral distribution of credit, the services sector accounted for the largest share of 32.8 percent as at endJune 2024 (from 33.6 percent in June 2023), followed by the commerce and finance sectors, with a relative share of
23.6 percent (from 21.5 percent in June 2023), while the manufacturing sector accounted for a share of 10.7 percent
(from 10.6 percent in June 2023). Together, these top three sectors accounted for 67.2 percent of total credit (up from
65.7 percent in June 2023). The mining and quarrying sector remained the lowest recipient of industry credit, with a
share of 3.3 percent (from 3.4 percent in June 2023).

5.2.2 Off-Balance Sheet Transactions
Off-balance sheet transactions (largely trade finance and guarantees) grew during the review period. Contingent
liabilities rose by 29.0 percent to GH¢25.7 billion as at end-June 2024, from GH¢19.9 billion as at end-June 2023.
However, banks’ contingent liabilities as a percentage of total liabilities declined to 8.8 percent in June 2024, from 9.0
percent in June 2023.

5.2.3 Asset Quality
The asset quality of the banking industry declined during the period under review. The industry’s NPL ratio rose to
24.2 percent in June 2024, from 18.7 percent in June 2023. When adjusted for the fully provisioned loan loss category,
the industry’s NPL ratio still increased to 10.8 percent in June 2024, from 7.8 percent, reflecting increasing stock of
all categories of nonperforming loans. The rise in the NPL ratio during the period under review was explained by the
higher growth in the NPL stock relative to the growth in total loans. The industry’s NPL stock grew by 49.4 percent to
GH¢20.4 billion in June 2024, up from GH¢13.7 billion, reflecting a deterioration in both domestic and foreign
currency-denominated loans in the period under review.

The private sector accounted for the largest share of the non-performing loans, being the largest recipient of the
industry’s credit. The proportion of NPLs attributable to the private sector rose marginally to 95.6 percent in June
2024, from 95.5 percent in June 2023, while that of the public sector declined to 4.4 percent, from 4.5 percent in a
similar period last year.

The agriculture, forestry, and fishing sector recorded the highest NPL ratio of 56.4 percent (an increase from 30.0
percent a year ago), followed by the transportation, storage and communication sector with an NPL ratio of 49.1 percent
(from 22.1 percent a year earlier). The NPL ratio of the construction sector rose to 36.8 percent (from 32.8 percent),
followed by the electricity, water and gas sector at 20.6 percent (from 7.8 percent), and then the commerce and finance
sector unchanged at 20.2 percent. The mining and quarrying sector accounted for the lowest NPL ratio of 13.7 percent
in June 2024 (from 12.7 percent a year earlier).

5.3 Financial Soundness Indicators
Key financial soundness indicators (FSIs) in the first half of 2024 pointed to a liquid and profitable sector with
improved capital buffers.


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Figure 5.2: Key Financial Soundness Indicators (FSIs)

Source: Bank of Ghana Staff Calculations

5.3.1 Liquidity Indicators
The industry’s liquidity position remained strong in June 2024, with improvements in the core measures following the
increase in the CRR requirement. The ratio of core liquid assets (mainly cash and due from banks) to total deposits
improved to 47.1 percent in June 2024, from 35.8 percent in June 2023. Also, the ratio of core liquid assets to total
assets rose to 35.8 percent in June 2024, from 27.7 percent in June 2023. Also, the ratio of broad liquid assets to total
deposits increased to 90.6 percent, from 83.6 percent, while broad liquid assets to total assets increased to 68.9 percent
from 64.7 percent over the review period.

5.3.2 Capital Adequacy Ratio
The industry’s solvency position, measured by the Capital Adequacy Ratio (CAR) adjusted for the regulatory reliefs,
was 14.3 percent in June 2024, higher than the prudential minimum of 10.0 percent, and unchanged from 14.3 percent
recorded in June 2023. The CAR in June 2024 reflected the recognition of 2024 profits posted by banks for purposes
of CAR computation, as well as the on-going recapitalisation of banks.

5.3.3 Profitability
The banking industry remained profitable for the first half of 2024, recording higher profit-before-tax (PBT) and profitafter-tax (PAT) in June 2024 relative to the same period last year. However, the growth rate in profit moderated to 25.5
percent in June 2024 relative to 51.4 percent recent same period last year.


Jun-22
Jun-23
Apr-24
Jun-24
Efficiency Indicators (%)
Cost to income
Operational Cost to gross income
Cost to total assets (RHS)
Operational Cost to total assets (RHS)

Jun-22
Jun-23
Apr-24
Jun-24
Profitability (%)
Return On Equity (%) after tax
Return On Assets (%) before tax

Jun-21
Jun-22
Jun-23
Apr-24
Jun-24
Asset Quality
SUB-STD (GH¢m)
DOUBTFUL (GH¢m)
LOSS (GH¢m)
Adjusted NPL Ratio (%)
NPL Ratio (% Right Axis)

Jun-23
Jul-23
Aug-23 Sep-23
Oct-23 Nov-23 Dec-23
Jan-24
Feb-24 Mar-24 Apr-24 May-24 Jun-24
Solvency (%)
RWA/Total Assets
CAR

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Generally, all income lines increased but at a lower growth rate in June 2024 relative to the same period last year. Net
interest income grew by 19.4 percent to GH¢11.8 billion, lower than the corresponding period’s growth of 41.4 percent
in 2023. In year-on-year terms, interest income increased to GH¢18.0 billion from GH¢15.1 billion, representing a
growth of 19.1 percent relative to 44.3 percent in June 2023. The lower growth in interest income was explained by
the relatively lower rates on money market instruments this year compared to the first half of 2023, as well as a decline
in lending rates. Interest expenses also rose to GH¢6.2 billion in June 2024, representing a lower growth rate of 18.6
percent compared to the 50.0 percent recorded in June 2023.

Net fees and commissions recorded a slower growth of 16.8 percent in June 2024, from 30.6 percent a year ago, while
other income recorded a sharp contraction of 16.2 percent to GH¢2.4 billion in June 2024, from GH¢2.8 billion in June
2023. These developments in the different income lines culminated into a sharp increase in industry’s operating income
to GH¢16.8 billion in June 2024, from GH¢14.9 billion in June 2023. Similarly, gross income increased to GH¢23.0
billion in June 2024, from GH¢20.1 billion in June 2023.

The cost lines recorded similar increases in June 2024, but at lower growth rates compared to the same period in 2023.
The industry’s operating expenses grew by 15.5 percent in June 2024, compared to 44.9 percent in June 2023, on the
back of slower growth in staff costs and other operating (administrative) expenses. Impairment losses on financial
assets, as well as provisions for bad debt and depreciation, contracted by 39.5 percent in June 2024, compared to 32.7
percent increase in June 2023.

Consequently, the industry’s profit-after-tax increased by 25.5 percent to GH¢5.4 billion in June 2024, compared with
the 51.4 percent growth recorded in June 2023. Profit-before-tax also rose by 22.8 percent to GH¢8.1 billion. The
lower growth in profit during the first half of this year was because of lower increases in interest income and other
income lines in 2024, relative to the same period in 2023.

Figure 5.3: Composition of Income, Cost and Borrowings

Source: Bank of Ghana Staff Calculations
(a) Return on Assets and Return on Equity
The banking sector’s profitability indicators, namely, return-on-assets (ROA) and return-on-equity (ROE), moderated
during the period under review following the slowdown in growth of profit-before-tax and profit-after-tax, respectively.
The ROE declined to 35.3 percent in in June 2024, from 37.6 percent in June 2023, while ROA was marginally lower
at 5.4 percent, from 5.5 percent in the same reference period

Percent
Composition of Cost (%)
Interest Expense
Operating Expense
Total Provision
Tax

Percent
Composition of Banks' Income (%)
Investments
Loans
Commissions & Fees
Other Income

Jun-21
Jun-22
Jun-23
Apr-24
Jun-24
Percent
Banks' Borrowing by Source (% of Total)
Domestic Borrowing
Foreign Borrowing

Jun-21
Jun-22
Jun-23
Apr-24
Jun-24
Percent
Banks' External Borrowing by Maturity (% of Total)
Short-term borrowings
Long term borrowings

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(b) Interest Margin and Spread
Interest spreads for the banking sector widened to 6.4 percent in June 2024, from 6.0 percent in June 2023. The increase
in spreads was on the back of an increase in gross yields to 9.4 percent in June 2024, from 9.1 percent in June 2023,
while interest payable declined to 3.0 percent, from 3.2 percent a year earlier. The interest margin to total assets ratio
also inched down to 3.7 percent from 4.1 percent, while interest margin to gross income rose from 49.1 percent to 51.4
percent during the period under review. The ratio of gross income to total assets (asset utilisation) declined to 7.1
percent in June 2024, from 8.3 percent in June 2023, while the profitability ratio rose from 21.3 percent to 23.5 percent
over the review period.

(c) Composition of Banks’ Income
Income from investments remained the largest component of banks’ total income in June 2024, with its share rising to
42.0 percent from 40.1 percent in June 2023 following the growth in total investments. The share of interest income
from loans improved to 36.3 percent from 34.9 percent during the same review period. The share of banks’ income
from fees and commissions also went up to 11.4 percent from 11.1 percent, while the share of income from other
sources moderated to 10.2 percent from 13.9 percent.

5.3.4 Operational Efficiency
The industry’s efficiency improved on the back of the slowdown in growth of operating expenses during the review
period. The cost-to-income ratio declined from 78.7 percent in June 2023 to 76.5 percent in June 2024, while cost-tototal assets ratio decreased to 5.4 percent from 6.5 percent a year earlier. The operational cost-to-total assets ratio also
went down to 3.5 percent from 4.4 percent a year earlier, while the ratio of operational cost to total income reduced to
49.6 percent in June 2024 from 52.8 percent.

5.3.5 Banks’ Counterparty Relationships
Total offshore balances increased by 71.4 percent to GH¢29.9 billion in June 2024, compared to the 67.8 percent
growth in the previous year, driven largely by substantial growth in placements. Industry placements with foreign
counterparties increased by 69.4 percent in June 2024, from 58.8 percent growth recorded during the same period a
year earlier. Nostro balances on the other hand, moderated to 73.6 percent, compared with a growth of 77.9 percent in
June 2023. As a result, the ratio of offshore balances to net worth rose to 92.6 percent from 78.3 percent.

The share of banks’ external borrowings in total borrowings declined to 28.1 percent in June 2024, from 37.3 percent
in June 2023, while the share of domestic borrowings increased to 71.9 percent, from 62.7 percent in June 2023. Banks’
external borrowings were tilted towards long-term instruments, although the share of long-term borrowings in total
external borrowings declined to 61.7 percent from 68.8 percent, while the share of short-term borrowings picked up to
38.3 percent from 31.2 percent a year earlier.

5.4 Credit Conditions Survey
Results of the June 2024 Credit Conditions Survey indicated a net easing in the overall stance on loans to enterprises
between May and June 2024, on the back of a net easing in the stance on all components of enterprise loans (namely
short-term and long-term enterprise loans, loans to SMEs, and loans to large enterprises). Banks projected their overall
stance on enterprise loans to record a net tightening in July and August 2024, from a tightening in all components of
enterprise loans apart from loans to large enterprises.

The overall stance on loans to households also eased during the June 2024 survey round from net ease in loans for
house purchase, while consumer credit and other lending tightened marginally. Over the next two months, banks

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project further net easing in the overall stance on loans to households, which will be reflected in loans for house
purchases and consumer credit.

On the demand side, the June 2024 survey further indicated a soaring in overall demand for enterprise loans from
increases in the demand for loans on all components of enterprise loans. Banks projected a net increased demand for
corporate loans over the next two months, also driven by net increases in the demand for all categories of enterprise
loans.

Credit demand by households recorded a net increase between May and June 2024, from a net increase in the demand
for both mortgages and consumer credit and other lending. Over the next two months, banks expect a slump in the
demand for both consumer credit and loans for house purchases to drive a decrease in the overall demand for household
loans.

Figure 5.4: Credit Conditions Survey Results

Source: Bank of Ghana Staff Calculations

5.5 Conclusion and Outlook
The banking sector’s performance in June 2024 pointed to continuing recovery from the macroeconomic challenges
since 2022. However, asset quality concerns remained a drag on the performance of the sector. The banking sector
remained profitable, liquid, and generally efficient during the review period, with stable solvency reflecting the
rebound in profitability in the industry post-DDEP implementation, as well as the ongoing recapitalisation effort by
banks. The outlook remains stable, but recapitalisation and enforcement of stringent credit underwriting standards, and
intensified loan recovery efforts are critical to ensuring good performance of the banking sector in the medium term.


NPR (%)
Small and Medium Enterprises
Large Enterprises
Overall Credit Stance for Enterprises
Short term enterprise loans
Long term enterprise loans
Index, a rise denotes tightening
Corporates

NPR (%)
Loans for house purchase
Consumer credit and other lending
Overall stance to Households
Index, a rise denotes tightening
Households

Jun-22
Oct-22
Feb-23
Jun-23
Oct-23
Feb-24
Jun-24
Overall Demand for credit
Small and Medium Enterprises
Large Enterprises
Short term
Long term
Index, a rise denotes increase in demand
Corporates

NPR (%)
Loan for house purchase
Loan for consumer credit
Overall Household demand for loans
Index, a rise denotes increase in demand
Households

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6. Fiscal Developments

6.0 Highlights
Provisional data on budget execution indicated an overall fiscal deficit (commitment basis) of 2.0 percent of GDP,
against the budget target of 2.7 percent of GDP. The deficit of GH¢21.3 billion was financed from both domestic and
foreign sources. The primary balance recorded a deficit of GH¢2.3 billion (0.2% of GDP), against the deficit target
of GH¢2.4 billion (0.2% of GDP).

6.1 Total Revenue and Grants
Total revenue and grants for second quarter of 2024 was GH¢74.65 billion (7.1% of GDP), lower than the target of
GH¢76.07 billion (7.2% of GDP). The outturn represented a shortfall of 1.9 percent with respect to the target, but a
year-on-year growth of 24.6 percent. Domestic revenue totalled GH¢74.19 billion (7.1% of GDP), marginally below
the target of GH¢74.41 billion (7.1% of GDP). A mixed performance was observed for the various tax handles.

Tax revenue, (comprising taxes on income & property, taxes on domestic goods and services and international trade
taxes, excluding oil and gas related taxes), was GH¢59.70 billion (5.7% of GDP), higher than the target of GH¢59.30
billion (5.6% of GDP). This represented a marginal overperformance by 0.7 percent.

Taxes on income and property (made up of personal income tax (PAYE), company taxes [including taxes on oil],
royalties from oil and minerals, and other direct taxes) totalled GH¢28.68 billion (2.7% of GDP), 4.5 percent above
the target of GH¢27.44 billion (2.6% of GDP). All the components exceeded their targets with the exception “Personal
taxes” and “Company taxes on oil”. This was also higher than the GH¢23.73 billion collected in the corresponding
period of 2023, reflecting a year-on-year growth of 20.8 percent.

Taxes on domestic goods and services (consisting of domestic VAT, excise duty, GET Fund Levy, National Health
Insurance Levy, and Communication Service Tax) was GH¢25.97 billion (2.5% of GDP), below the target of
GH¢28.30 billion. On year-on-year basis, the outturn represented a growth of 24.2 percent.

Non-tax revenue raked in GH¢11.27 billion, missing the target of GH¢11.66 billion by 3.4 percent, but recorded a
year-on-year growth of 36.5 percent. This performance was mainly due to lower-than-budgeted lodgements, resulting
mainly from the underperformance of “Fees & Charges”. Dividend payments also mitigated the offset of the non-tax
revenue handle from its target.

Taxes on international trade (comprising mainly import duties) was GH¢8.39 billion, above the target of GH¢7.63
billion by 10.0 percent and a year-on-year growth of 39.1 percent.

“Other revenue” of GH¢2.54 billion failed to meet its target of GH¢2.99 billion, recording a negative deviation of 15.1
percent, but was above the total of GH¢2.44 billion collected in the corresponding period of 2023, reflecting a yearon-year increase of 4.1 percent.

Grants received was GH¢457.3 million, significantly below GH¢1.65 billion programmed for the review period, thus
falling below its target by 72.3 percent. This outturn was lower than the GH¢864.7 million received in the
corresponding period of 2023.


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Table 6.1: Total Revenue and Grants

Source: Ministry of Finance

6.2 Total Expenditures
Total expenditures (including arrears clearance and discrepancy) for the review period was GH¢101.21 billion (9.6%
of GDP). This was below the target of GH¢104.77 billion (10% of GDP) by 3.4 percent despite its 66.5 percent yearon-year increase.

Compensation of Employees (including wages and salaries, pensions & gratuities, and other wage related expenditure)
was GH¢29.30 billion, marginally lower than the target of GH¢29.96 billion. This outturn fell short of its target by 2.2
percent and recorded 48.4 percent year-on-year growth. In terms of fiscal flexibility, compensation of employees
constituted 39.5 percent of domestic revenue mobilized during the period under review.

Use of Goods and Services totalled GH¢5.77 billion, higher than the expected target of GH¢4.56 billion, an overrun
of 26.6 percent. This expense was lower than the GH¢6.25 billion observed in the corresponding period of 2023,
reflecting a year-on-year contraction of 7.6 percent.

Total interest payments of GH¢19.03 billion fell below the envisioned target of GH¢26.35 billion for the review period.
This outturn compares with GH¢13.39 billion recorded in the corresponding period of 2023. The decreased interest
payment was mainly on account of a partial freeze on debt service because of the debt restructuring program by
Government to help resolve Ghana’s fiscal and debt vulnerabilities.

Grants to other Government units (made up of National Health Fund, Education Trust Fund, Road Fund, Energy Fund,
District Assemblies Common Fund, Retention of IGFs, transfer to GNPC, Ghana Infrastructure Fund and other
earmarked funds) all summed up to GH¢19.70 billion, higher than the target of GH¢17.55 billion, resulting in a positive
deviation of 12.2 percent. It also recorded a year-on-year growth of 83.4 percent.

Million Ghana Cedis

Prov.
Prov
Prov.
Budget
DEVIATION
Y-O-Y
Q1+Q2
Q1
Q1+Q2
Q1+Q2
OVER (+)/ BELOW (-) GROWTH
TAX REVENUE

TAXES ON INCOME & PROPERTY

Personal

Companies


Company Taxes on Oil

Others

TAXES ON DOMESTIC GOODS AND SERVICES

Excises

VAT

National Health Insurance Levy (NHIL)

GETFund Levy

Communication Service Tax
315.1


E-Transaction Levy

Covid-19 Health Levy


TAXES ON INTERNATIONAL TRADE


39.1
Imports Duty

TAX REFUND

SOCIAL CONTRIBUTIONS

339.7
692.6

50.6
22.6
NON-TAX REVENUE

OTHER REVENUE

DOMESTIC REVENUE

GRANTS
864.7


Project Grants
864.7

457.3
925.6
Programme Grants

726.3
TOTAL REVENUE & GRANTS


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Capital expenditure for the period under review was GH¢13.91 billion (1.3% of GDP), lower than the programmed
target of GH¢19.13 billion (1.8% of GDP) by 27.2 percent. This outturn represented a year-on-year growth of 107.8
percent.

Other expenditure for the second quarter of 2024 was GH¢12.98 billion, 95.1 percent above the target of
GH¢6.65billion. Out of this, energy sector payment shortfalls totalled GH¢10.60 billion (1.0% of GDP), higher than
the programmed target of GH¢2.84 billion (0.3% of GDP). This contributed to the resulting positive deviation of 95.1
percent. This outturn of GH¢12.98 billion dwarfed the GH¢3.76 billion recorded in the corresponding period of 2023.

Table 6.2: Total Expenditures

Source: Ministry of Finance


6.3 Budget Balance and Financing
Government budgetary operations resulted in an overall budget deficit of GH¢21.28 billion (2.0% of GDP) on
commitment basis for the period of Jan-June 2024. This was slightly lower than the targeted deficit of GH¢28.70 billion
(2.7% of GDP). In addition, the primary balance recorded a deficit of 0.22 percent of GDP against a targeted primary
deficit of 0.21 percent of GDP.

On cash basis, the overall budget deficit was GH¢36.13 billion (3.4% of GDP), compared to the target of GH¢35.17
billion (3.3% of GDP). The primary deficit on cash basis was GH¢17.10 billion (1.6% of GDP) compared to the target
of GH¢8.82 billion (0.8% of GDP).

The deficit was financed largely from domestic sources. Domestic financing (net) was GH¢21.60 billion (2.1% of
GDP), substantially higher than GH¢10.24 billion (1.2% of GDP) recorded in the same period in 2023. Foreign
financing recorded a net inflow of GH¢16.42 billion (1.6% of GDP), higher than the envisioned target of a repayment
of GH¢509.5 million (-0.01% of GDP).


Million Ghana Cedis

Prov.
Prov
Prov.
Budget
DEVIATION
Y-O-Y
Q1+Q2
Q1
Q1+Q2
Q1+Q2 VER (+)/ BELOW GROWTH
Compensation of Employees

Wages & Salaries

Social Contributions

Use of Goods and Services

Interest Payment

Domestic

External (Due)

Subsidies

145.3
132.8
Grants to Other Government Units

Social Benefits
221.7
-
376.8

Other Expenditure

o/w Energy Sector Payment Shortfalls

Capital Expenditure

Domestic financed

Foreign financed

TOTAL EXPENDITURE


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Table 6.3: Budget Balance and Financing

Source: Ministry of Finance

6.4 Public Debt Analysis
The stock of public debt at the end of June 2024 stood at GH¢742 billion (70.6% of GDP), an increase of GH¢133.6
billion over the end-December 2023 stock of GH¢608.4 billion (72.3% of GDP).


Million Ghana Cedis

Prov.
Prov
Prov.
Budget
DEVIATION
Y-O-Y
Q1+Q2
Q1
Q1+Q2
Q1+Q2
VER (+)/ BELOWGROWTH
Revenue & Grants

Expenditure

Overall balance (commitment)

(percent of GDP)

Payables/Arrears Clearance (Net)

o/w Clearance of Arrears

o/w Payables build-up
7,719.10

4535.5

o/w Outstanding payables build-up reported in GIFM7,719.10

4535.5

Overall balance (cash)

(percent of GDP)

Discrepancy
-2,147.70
-2,439.50
5,278.10

-345.8
Overall balance (incl. Divestiture and Discrepancy)

(percent of GDP)

Financing

Foreign (net)

Borrowing

Project loans

Programme Loans

11,496.20
11,496.20
4,190.30
Sovereign Bond

Amortisation (due)

Domestic (net)

Banking

Bank of Ghana
-774.9
-5,952.60
-4,075.00

425.9
o/w SDR

Comm. Banks

Non-banks

Other Domestic
4,672.20

-15,876.60
o/w Buffer for Auction Shortfalls
4,792.70

-15876.6
o/w Domestic Standard Loan
-120.5

Ghana Petroleum Funds

Transfer to Ghana Petroleum Funds

o/w Stabilisation Fund

o/w Heritage Fund

Transfer from Stabilisation Fund
711.2

522.6
1471.2
Sinking Fund

-1082
-147.1
Contingency Fund

Nominal GDP (Including Oil)
841,632.90 1,050,978.30 1,050,978.30 1,050,978.30
Nominal GDP (Excluding oil)


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Table 6.4: Public Debt

Source: Bank of Ghana, Ministry of Finance

6.5 Conclusion and Outlook
Budget execution for January to June 2024 showed revenue outturn below its budget target. Expenditures were below
target. The shortfall in revenue was largely on account of lower-than-programmed receipts from personal and company
taxes on oil. The expenditure performance, on the other hand, was partly attributed to a reduced debt service because
of the debt restructuring program embarked by Government. These fiscal developments resulted in an overall budget
deficit (commitment), which was below its programmed target and was mainly financed from domestic sources.

Jun 2024 -Jun

DECEMBER
JANUARY
FEBRUARY MARCH
APRIL
MAY
JUNE
CHANGE
TOTAL DOMESTIC DEBT (GH¢m)

SHORT TERM

MEDIUM-TERM

LONG-TERM

STANDARD LOANS

HOLDINGS OF DOMESTIC DEBT (GH¢m)

BANKING SYSTEM

NON-BANK

FOREIGN SECTOR (Non-Resident)

TOTAL EXTERNAL(US$m)

MULTILATERAL

BILATERAL

COMMERCIAL

TOTAL EXTERNAL(GH¢m)

TOTAL PUBLIC DEBT (GH¢m)

EXCHANGE RATE (End Period Selling MOF)

MEMORANDUM ITEMS
NOMINAL GDP ( GH¢m)

TOTAL DEBT /GDP RATIO (%)

EXTERNAL DEBT/GDP

DOMESTIC DEBT/GDP

EXTERNAL DEBT/TOTAL DEBT

DOMESTIC DEBT/TOTAL DEBT


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7. Price Developments

7.0 Highlights
Global headline inflation remains on a downward trajectory, although the disinflation process is expected to slow.
In the domestic economy, recent price developments suggest a resumption of the disinflation process. In June 2024,
headline inflation eased to 22.8 percent, from 23.1 percent in May, and 25.0 percent in April. However, there is some
uncertainty regarding the inflation path for the year, given recent exchange rate pressures, upward adjustment in
utility tariffs and increases in ex-pump fuel prices.


7.1 Global Inflation Trends

Advanced Economies
Annual headline inflation in the United States declined to 3.0 percent in June 2024, from 3.3 percent in May. The
slowdown was on the back of easing prices of gasoline, new vehicles, used cars and trucks, as well as a decline in
inflation for energy, shelter, and transportation. Consistent with the decline in headline inflation, core inflation inched
down to 3.3 percent in June 2024 from 3.4 percent in May 2024.

Figure 7.1: Inflation in Advanced Economies (%)
Source: Trading Economics

In the United Kingdom, headline inflation was confirmed at 2.0 percent in June 2024, unchanged from the May figure.
The main upward drivers were costs of restaurants and hotels, and transport, which were primarily offset by easing
prices of housing and utilities. Core inflation also remained at 3.5 percent in June 2024, unchanged from the prior
month.

Annual inflation in the Euro Area slowed to 2.5 percent in June 2024, from 2.6 percent in the preceding month. The
slowdown was on the back of a decline in inflation for energy, food, alcohol and tobacco. The core inflation rate, which
excludes energy, food, alcohol, and tobacco, was steady at 2.9 percent in May and June 2024.
The annual inflation rate in Japan was steady at 2.8 percent in June 2024, unchanged from the reading in May. The
main upward drivers were the prices of gas, transport, furniture & household utensils, healthcare, culture and
communication. The core inflation rate edged up to 2.6 percent in June from 2.5 percent in the previous month.


-2
-1

Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
US
UK
Japan
Euro Area

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Emerging Market Economies
China's annual inflation rate decreased to 0.2 percent in June 2024, from 0.3 percent in May. The decline was driven
primarily by softening food prices, while non-food inflation remained stable. Core inflation, excluding food and energy
prices, was 0.6 percent year-on-year in June 2024, unchanged from the prior month.


Figure 7.2: Inflation in Emerging Markets Economies (%)

Source: Trading Economics

Brazil's annual inflation picked up to 4.2 percent in June 2024, from 3.9 percent in the previous month. The uptick was
underpinned by an increase in the prices of food and beverages, transportation, and healthcare. The uptick in inflation
in June 2024 was the second consecutive month that inflation rose following seven straight months of easing.

Turkey's annual inflation rate fell to 71.6 percent in June 2024, from 75.5 percent in the previous month. This marked
the first decline after seven consecutive increases in inflation. The deceleration was driven by lower inflation for
transportation, food, and non-alcoholic beverages. Consistent with headline inflation, core inflation edged down to
71.4 percent in June 2024, from 75.0 percent in the previous month.

Sub-Saharan Africa
South Africa's annual inflation rate dropped to 5.1 percent in June 2024 from 5.2 percent in May, on the back of lower
inflation for food & non-alcoholic beverages, housing & utilities, health, transport, and recreation & culture. The core
inflation rate, which excludes volatile items such as food and non-alcoholic beverages, fuel, and energy, declined to
4.5 percent in June 2024, from 4.6 percent in the previous month.

Figure 7.3: Inflation in Sub-Saharan Africa (%)

Source: Trading Economics

-2

Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
China
Brazil
-4

Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
South Africa
Nigeria
Ghana

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In Nigeria, headline inflation rose for the eighteenth consecutive month, hitting 34.2 percent in June 2024, from 34.0
percent in May. The acceleration was largely due to a surge in fuel prices following the weakening of the naira relative
to the dollar, and the removal of government subsidies. Price pressures came from food, housing & utilities, and
beverages & tobacco. The annual core inflation rate, which excludes farm produce and energy, increased to 27.4
percent in June 2024, from 27.0 percent in May.

7.2 Domestic Inflation
On the domestic front, headline inflation fell to 22.8 percent in June 2024, from 23.1 percent in May and 25.0 percent
in April. The decline was attributable to a 2.0 percentage point decline in non-food inflation to 21.6 percent in June
2024. The decline in non-food inflation was occasioned by the relative stability of the exchange rate in June following
heightened pressures in May, the tight monetary policy stance, the implementation of the dynamic Cash Reserve Ratio
(CRR) to mop up excess liquidity, revised regulations on advanced payments for imports by the Bank, the agreement
in principle with external creditors for external debt restructuring, and positive sentiments from the third tranche of the
IMF Extended Credit Facility. Food inflation, on the other hand, increased by 1.4 percentage points to 24.0 percent
over the same period.

Consistent with the easing of headline inflation, the Bank’s main core inflation measure, which excludes energy and
utility items, declined to 22.1 percent in June 2024, from 22.6 percent in May.

Figure 7.4: Headline Inflation

Source: GSS and Bank of Ghana Staff Calculations

Figure 7.5: Headline vs Core Inflation (%)

Source: GSS and Bank of Ghana Staff Calculations


On a month-on-month basis, headline inflation edged down to 2.9 percent in June 2024, from 3.2 percent in May.
During the same period, monthly non-food inflation declined sharply to 0.9 percent from 3.6 percent, while monthly
food inflation rose to 5.1 percent from 2.7 percent.

Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24

Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
Core 1 (Excluding
Fuel, and Utilities)

Monetary Policy Report, BOG Research Department – July 2024

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Figure 7.6 Month-on-Month Inflation (%)

Source: GSS and Bank of Ghana Staff Calculations


7.3 Inflation Risk Assessment and Outlook
There is some uncertainty regarding the inflation path for the year, given recent exchange rate pressures, upward
adjustment in utility tariffs and increases in ex-pump fuel prices. The above developments have resulted in a slightly
elevated inflation profile for the year. Even though inflation is expected to remain within the target band for the year,
the risks are tilted slightly on the upside. Mitigating the current risks to inflation will require continued maintenance
of a tight monetary policy stance supported by strong fiscal consolidation efforts, including remaining vigilant to other
forms of risks to ensure that the end year inflation objectives are achieved.

Decision on the Monetary Policy Rate
At the end of the deliberations, the Monetary Policy Committee decided to maintain the policy rate at 29.0 percent.


Headline
Food
Non-food
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24

Monetary Policy Report, BOG Research Department – July 2024

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Appendix

Table A.1: Sources of Growth in Total liquidity (GH¢ Millions, unless otherwise stated)

Source: Bank of Ghana Staff Calculations

Table: A.2 Table 4.1: Sources of Growth in Reserve Money (GH¢ Millions, unless otherwise stated)

Source: Bank of Ghana Staff Calculations


Monetary Policy Report, BOG Research Department – July 2024

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Table A.3: Asset and Liability Structure of the Banking Sector

Source: Bank of Ghana Staff Calculations

Table A.4: Credit Growth

Source: Bank of Ghana Staff Calculations

Table A.5: Contingent Liabilities

Source: Bank of Ghana Staff Calculations


Jun-21
Jun-22
Jun-23
Apr-24
Jun-24
Cash and Due from Banks
20.7

23.4

27.7

35.2

35.8

Investments
46.5

40.5

37.1

34.5

33.2

Net Advances
25.2

28.1

25.8

20.5

21.4

Others
7.6

8.0

9.4

9.8

9.6

Components of Liabilities and Shareholders' Funds (% of Total)
Total Deposits
67.7

65.7

77.4

77.0

76.1

Total Borrowings
10.5

13.2

6.6

6.3

7.2

Shareholders' Funds
14.0

13.1

9.2

10.1

10.0

Other Liabilities
7.8

8.0

6.8

6.6

6.8

Components of Assets (% of Total)
Jun-22
Jun-23
Apr-24
Jun-24
Jun-23 Jun-24
Public Sector
6,201.82


Private Sector
57,160.95

66,370.96 71,855.61 78,113.05
16.1
17.7
- Private Enterprises
41,834.52

46,643.78 52,269.44 57,447.21
11.5
23.2
o/w Foreign
5,887.52


Indigenous
35,947.00

45,424.55 48,743.87 52,978.03
26.4
16.6
- Households
12,981.00

16,208.51 18,353.83 19,289.09
24.9
19.0
Gross Loans

Economic Sector
Gh¢million
y/y growth (%)
Jun-21
Jun-22
Jun-23
Apr-24
Jun-24
Contingent Liabilities (GH¢million)
14,071.7

21,921.0

19,885.5

24,400.1

25,657.6

Growth (y-o-y)
25.7

50.3

(12.9)

23.6

29.0

% of Total Liabilities
10.1

12.6

9.0

8.8

8.8


Monetary Policy Report, BOG Research Department – July 2024

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Table A.6: Distribution of Loans and NPLs by Economic Sector (%)

Source: Bank of Ghana Staff Calculations


Table A.7: Liquidity Ratios

Source: Bank of Ghana Staff Calculations


Table A.8: Profitability Indicators (%)

Source: Bank of Ghana Staff Calculations


a. Public Sector

i. Government

ii. Public Institutions

iii. Public Enterprises

b. Private Sector

i. Private Enterprises

o/w Foreign

Indigeneous

ii. Households

iii. Others

Share in NPLs
Share in Total Credit
Share in NPLs
Jun-22
Jun-23
Apr-24
Jun-24
Share in Total Credit
Share in NPLs
Share in Total Credit
Share in NPLs
Share in Total Credit
Jun-21
Jun-22
Jun-23
Apr-24
Jun-24
Liquid Assets (Core) - (GH¢'million)
33,656.1

46,726.4

67,100.0

107,918.8

115,827.0

Liquid Assets (Broad) -(GH¢'million)
109,129.9

127,547.3

156,811.9

213,585.9

222,701.8

Liquid Assets to total deposits (Core)-%
30.5

35.6

35.8

45.7

47.1

Liquid Assets to total deposits (Broad)- %
98.9

97.1

83.6

90.4

90.6

Liquid assets to total assets (Core)- %
20.7

23.4

27.7

35.2

35.8

Liquid assets to total assets (Broad)- %
67.0

63.8

64.7

69.6

68.9

Jun-22 Jun-23 Apr-24 Jun-24
Gross Yield

Interest Payable

Spread

Asset Utilisation

Interest Margin to Total Assets

Interest Margin to Gross income

Profitability Ratio

Return On Equity (%) after tax

Return On Assets (%) before tax


Monetary Policy Report, BOG Research Department – July 2024

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Table A.9: DMBs’ Income Statement

Source: Bank of Ghana Staff Calculations


Table A.10: Development in Offshore Balances

Source: Bank of Ghana Staff Calculations


Jun-22
Jun-23
Apr-24
Jun-24
Jun-23 Apr-24 Jun-24
Interest Income
10,461.7

15,092.6

12,002.0

17,980.5

44.3

19.4
19.1
Interest Expenses
(3,475.1)

(5,211.3)

(4,041.7)

(6,180.4)

50.0

14.0
18.6
Net Interest Income
6,986.5

9,881.2

7,960.2

11,800.0

41.4

22.4
19.4
Fees and Commissions (Net)
1,717.7

2,243.4

1,589.2

2,620.1

30.6

12.8
16.8
Other Income
1,517.4

2,805.7

1,581.9

2,352.5

84.9

(20.8)
(16.2)
Operating Income
10,221.7

14,930.3

11,131.3

16,772.7

46.1

12.3
12.3
Operating Expenses
(4,538.9)

(6,577.6)

(5,020.0)

(7,594.1)

44.9

11.9
15.5
Staff Cost (deduct)
(2,458.7)

(3,120.0)

(2,526.9)

(3,813.7)

26.9

19.6
22.2
Other operating Expenses
(2,080.3)

(3,457.7)

(2,493.1)

(3,780.4)

66.2

4.9
9.3
Net Operating Income
5,682.7

8,352.7

6,111.3

9,178.6

47.0

12.7
9.9
Total Provision (Loan losses, Depreciation & others)
(1,305.2)

(1,731.9)

(863.4)

(1,048.2)

32.7

(20.6)
(39.5)
Income Before Tax
4,377.5

6,620.8

5,247.9

8,130.4

51.2

21.1
22.8
Tax
(1,537.4)

(2,320.9)

(1,748.3)

(2,733.8)

51.0

14.6
17.8
Net Income
2,840.2

4,299.9

3,499.6

5,396.5

51.4

24.6
25.5
Gross Income
13,696.8

20,141.6

15,173.1

22,953.1

47.1

12.8
14.0
(GH ¢'million)
Y-on-y Growth (%)
Jun-21 Jun-22 Jun-23 Apr-24
Jun-24
Offshore balances as % to Networth

Annual Growth in Offshore balances (%)

Annual Growth in Nostro Balances (%)

Annual Growth in Placement (%)


Monetary Policy Report, BOG Research Department – July 2024

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Table A.11: Fiscal Indicators

Source: Ministry of Finance


Million Ghana Cedis

Q1+Q2
Q1
Q1+Q2
Q1+Q2
DEVIATION
Y-O-Y
OUTTURN OUTTURN OUTTURN
PROG
OVER (+)/ BELOW (-) GROWTH
Domestic Revenue

(percent of GDP)


Domestic expenditure


(percent of GDP)

Domestic Primary Balance

(percent of GDP)

Primary Balance (Commitment)

(percent of GDP)


Primary Balance (Cash)

(percent of GDP)


Non-Oil Primary Balance

(percent of GDP)

Overall Balance (Commitment)

(percent of GDP)

Overall Balance (cash, discrepancy)

(percent of GDP)

Oil Revenue

(percent of GDP)

Non-Oil Revenue and Grants

(percent of GDP)

Benchmark Oil Revenue

(percent of GDP)

Annual Budget Funding Amount (ABFA)

(percent of GDP)

Nominal GDP
841,632.90 1,050,978.30 1,050,978.30 1,050,978.30
Non-Oil Nominal GDP


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Table A.12: Headline Inflation


Table A.13: CPI Components


Weghts
Dec
Dec
Dec
Jan
Mar
May
Jun
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
(%)
Overall

Food and Beverages

Non-food

Alcoholic Beverages, Tobacco & Narcotics

Clothing and footwear

Housing and Utilities

Furnishings, Household Equipment

Health

Transport

Information and Communication

Recreation & Culture

Education

Hotels, cafes and restaurants

Insurance and Financial services

Personal care, social protection & Miscellaneous services


CPI Components (%)

Source: Ghana Statistical Service