Ghana’s Gold Price Risk: IMF Warns Weak Banks and Central Bank Remain Exposed to Shocks

Ghana’s banking system is stronger after the DDEP, but a severe gold-price fall could weaken growth, government revenues and the cedi while exposing vulnerable banks and putting greater pressure on the Bank of Ghana’s balance sheet. The IMF calls for stronger bank supervision, resolution of weak institutions, commodity-risk-aware central bank planning, improved private-sector credit and greater economic diversification.

Ghana's financial system is better prepared to withstand a sharp fall in global gold prices following reforms after the Domestic Debt Exchange Program (DDEP), but weak banks and the Bank of Ghana's balance sheet remain major areas of concern, according to an International Monetary Fund (IMF) assessment.

The study, led by Concha Verdugo Yepes of the IMF's African Department and conducted with officials and researchers from the Bank of Ghana (BoG), examines how a major fall in gold prices could affect banks, government finances, inflation, economic growth and financial stability.

Gold is critical to Ghana's economy. It generates more than half of export receipts, more than two-thirds of goods exports, contributes close to 10% of GDP and accounts for about 21% of direct tax revenues. This means a sharp fall in gold prices would affect much more than mining companies.

Lower gold earnings could reduce foreign-exchange inflows and government revenue, weaken the cedi and increase inflation. Higher inflation could require tighter monetary policy, raising borrowing costs for businesses and households and slowing economic growth.

Banks Are Stronger, but Weak Spots Remain

Ghana's financial sector has strengthened considerably since the DDEP. Total financial-system assets increased from about GHS 537 billion in 2024 to GHS 663 billion in 2025, equivalent to roughly 47% of GDP. Banks account for about 67% of financial-system assets, making them central to economic activity and financial stability.

Banking assets reached about GHS 447 billion at the end of 2025. The system-wide capital adequacy ratio also improved sharply, rising from around 14% at end-2024 to about 22% by March 2026.

However, stronger bank balance sheets have not produced a strong recovery in lending. The loan-to-deposit ratio fell from about 55% in 2019 to 29% by end-2025, while private-sector bank credit stood at only around 7.4% of GDP.

Bad loans remain another concern. The non-performing loan ratio declined from 26.7% in March 2024 to 18.1% in March 2026, but remains high.

This creates a development challenge. Banks may be safer, but businesses still need affordable financing to invest, expand production and create jobs. Policymakers and development partners therefore face the challenge of strengthening financial stability while improving access to productive credit.

A Gold Price Crash Would Spread Across the Economy

The IMF tested two major scenarios. The first assumes gold prices fall 30%, from USD 4,151 per ounce at end-2025 to USD 2,906 by end-2026. The more severe scenario assumes a 45% decline to USD 2,283.

Under the 30% shock, government revenues from mining royalties and corporate taxes could decline by about 0.8–1% of GDP. Inflation could rise by roughly 0.83–1.57 percentage points, while real GDP growth could be reduced by around 0.73–1.55 percentage points.

Under the 45% scenario, the direct impact on GDP growth could reach 1.10–2.33 percentage points.

Sovereign risk could also increase. Under the 30% scenario, sovereign-risk indicators could widen by around 150–200 basis points, potentially increasing government financing costs.

Ghana nevertheless has some protection. The country recorded a current-account surplus of about USD 9.4 billion, or 8.2% of GDP, at end-2025. Exports of oil and cocoa also provide some diversification.

Interestingly, banks have limited direct exposure to gold mining. Mining and quarrying represented only about 5.3% of total bank loans at end-2025. The bigger risk comes indirectly through slower growth, currency depreciation, higher interest rates and rising bad loans.

Central Bank Faces Greater Exposure to Gold

While the commercial banking system remains broadly resilient under the IMF's scenarios, the Bank of Ghana faces greater balance-sheet pressure.

The central bank begins with negative equity. Under the IMF's baseline assumptions, BoG equity stands at around minus 6.9% of GDP but is expected to improve gradually as monetary conditions normalise.

Falling gold prices could slow that recovery because they directly reduce the value of the central bank's gold reserves. At a gold price of USD 4,151 per ounce, the study values BoG gold assets at about GHS 27.15 billion. A 30% price decline reduces their value to around GHS 19.01 billion, while a 45% fall cuts the value to about GHS 14.93 billion.

The amount of gold held in reserves also matters. If gold accounts for 20% of reserves, a 30% price shock would push BoG equity to around minus 7.4% of GDP. If gold represents 50% of reserves, equity could fall to minus 8.3%. With a 45% price decline and gold accounting for half of reserves, equity could weaken to about minus 9% of GDP.

This makes commodity risk an important consideration for central-bank recapitalisation and reserve management.

Policy Action Can Turn Resilience Into Growth

For Ghana's government and regulators, the IMF findings underline the need to look beyond national banking averages. Foreign-owned banks have stronger capital positions, while some domestic institutions remain considerably weaker. Domestic private banks, for example, had a reported capital adequacy ratio of only 5.7% in December 2025, below the 13% regulatory minimum.

Weak banks therefore need timely recapitalisation, stronger supervision or resolution where necessary. Crisis preparedness should also remain a priority.

For international development partners, the findings point to opportunities to support stronger financial regulation, bank-resolution capacity and sustainable private-sector finance. With private-sector bank credit at only 7.4% of GDP, carefully designed guarantees, risk-sharing facilities and long-term development finance could help viable businesses access funding without weakening lending standards.

Private-sector stakeholders should also prepare for currency, interest-rate and credit risks. Stronger banks may find opportunities to expand lending to productive businesses, while investors could benefit from sectors that help Ghana diversify beyond commodity exports.

The IMF stresses that the 30% and 45% gold-price declines are stress scenarios, not forecasts. Still, the message for Ghana and other commodity-dependent economies is clear: strong bank capital alone is not enough. Financial stability will increasingly depend on resolving weak institutions, managing commodity exposure, expanding productive private credit, strengthening crisis preparedness and building a more diversified economy that can withstand the next global commodity shock.