Afful raises concerns over political influence, central bank independence and declining bank lending
Story by Eugene Nyarko Jnr. l Accra City Hotel, Accra l Thursday, October 15, 2026 —
The Group Chief Executive Officer (CEO) of the AfCFTA Policy Network (APN), Mr Louis Yaw Afful, has raised concerns about the growing reluctance of banks to lend to businesses, attributing the situation to political interference, loan defaults, tighter regulatory supervision and declining confidence in the business environment.
He has also warned that the independence of the Bank of Ghana (BoG) is at risk, arguing that the central bank has become increasingly politicised and must be allowed to operate independently to support economic growth.
Speaking at the Ghana Investment Gains Summit 2026 at the Accra City Hotel in Accra on Thursday, Mr Afful said the banking sector had moved away from relationship banking, which previously encouraged financial institutions to support businesses based on their growth potential.
The summit was held on the theme: “Financial Opportunities and Domestication of Investment Opportunities.”
Mr Afful, who also hosted the summit, explained that relationship banking enabled financial institutions to understand the operations of businesses and provide financial support based on their prospects rather than relying predominantly on collateral.
He said the approach allowed banks to build long-term relationships with their customers, with the expectation that the growth of those businesses would eventually generate returns for the lenders.
“The customer was king,” he said, explaining that banks previously pursued businesses with promising prospects and provided loans because they believed that growing alongside those businesses would be mutually beneficial.
However, he said the situation had changed, with banks increasingly adopting a pessimistic approach towards businesses because of concerns about credit risks and the possibility of financial misconduct.
Political interference and lending risks
Mr Afful attributed part of the problem to what he described as the infiltration of partisan politics into business activities, which he said had increased the risks faced by financial institutions.
According to him, the involvement of partisan political interests in businesses had heightened concerns about money laundering and other financial irregularities, prompting banks to become more cautious in their lending decisions.
He said the resulting risk-averse approach had made financial institutions more likely to treat businesses as high-risk borrowers, regardless of their individual prospects.
Mr Afful also cited changes in the operations of foreign-owned banks, the performance of indigenous Ghanaian banks and the global financial crisis of 2008 as factors contributing to the tightening of credit conditions.
He observed that the global financial meltdown had compelled banks to prioritise the protection of their balance sheets and exercise greater caution in granting loans, including mortgage-related facilities.
Loan defaults worsen situation
The APN CEO further identified loan defaults as a major factor discouraging banks from extending credit to businesses.
He said some borrowers had failed to repay their facilities, while others had allegedly channelled funds into unproductive ventures that did not generate sufficient returns to service their loans.
Such practices, he explained, undermined the confidence of financial institutions in prospective borrowers and reinforced their reluctance to provide credit to businesses.
Mr Afful argued that the situation required a broader examination of the relationship between borrowers, commercial banks, the central bank and the government’s economic management policies.
Central bank supervision
On the role of the Bank of Ghana, Mr Afful acknowledged that the central bank had strengthened its supervisory responsibilities following the global financial crisis and Ghana’s own banking sector challenges.
He said the regulator had legitimate reasons to prevent a resurgence of bad loans, which could undermine the financial stability of commercial banks and threaten the wider economy.
He also pointed to the impact of government securities, including Treasury bills, on banks’ investment decisions, arguing that the returns and risks associated with domestic government instruments influenced how financial institutions allocated their funds.
According to him, the central bank’s regulatory approach and the structure of investment opportunities in the domestic market had implications for the operations of both foreign-owned and indigenous banks.
He explained that foreign-owned banks also considered profitability and the ability to generate sufficient revenue when deciding whether to maintain or expand their operations in Ghana.
Mr Afful said these factors formed part of the broader dynamics behind changes in the banking sector and the decisions of some foreign financial institutions to scale back their activities.
Calls for central bank independence
Despite acknowledging the need for stronger supervision, Mr Afful expressed concern about what he described as the politicisation of the central bank.
He maintained that central banks had a responsibility to support economic growth while ensuring monetary and financial stability.
However, he warned that political influence could undermine the institution’s ability to perform its statutory functions effectively.
“Above all, one of the important things is that the central bank has become too political. So the central bank independence is at risk,” he said.
He stressed that the independence of the Bank of Ghana must be protected to enable it to discharge its responsibilities without undue political interference.
“Yes, the independence of the central bank should really become independent,” he added.
Mr Afful’s remarks highlighted the need to balance effective financial regulation with access to credit, particularly for businesses seeking funding to expand their operations, create employment and contribute to national economic development.
His call for greater central bank independence also brought renewed attention to the relationship between political governance, financial sector regulation and the availability of investment capital for Ghanaian businesses.
