Economic recovery to boost financial sector growth – ADB MD

The Managing Director of Agricultural Development Bank (ADB) PLC, Alhaji Alhassan Yakubu-Tali, has expressed confidence that the ongoing economic recovery will stimulate and sustain growth in the financial sector.

This optimism follows the approval by the International Monetary Fund (IMF) of the second review of the $3 billion Extended Credit Facility (ECF) and the implementation of key structural reforms by the Bank of Ghana, the Ministry of Finance and other stakeholders.

Alhaji Yakubu-Tali stressed that these developments are expected to result in a decline in inflation, creating a knock-on effect across the financial sector and the broader economy. He predicted that this would lead to lower lending rates, higher Treasury Bill (T-Bill) rates, stabilization of the cedi against the dollar and improvement in gross international reserves.

The ADB Managing Director has praised the efforts of the Bank of Ghana (BoG) in the ongoing fiscal consolidation, tightening of monetary policy and achieving relative exchange rate stability and declining inflation.

“I am optimistic that the economic recovery will restore confidence in the financial sector as customers will be able to access more loans at lower interest rates,” Alhaji Yakubu-Tali stressed. “This renewed confidence is expected to fuel growth in lending and credit activity, further fueling economic growth and stability,” he added.

Alhaji Yakubu-Tali also referred to the Bank of Ghana’s presentation titled “Maintaining the Momentum of Structural Reforms…” which indicated positive signs of recovery in the first quarter of 2024, with overall real GDP growth in the first quarter of 2024 at 4.7 per cent, the highest since the first quarter of 2022, compared to the 3.1 per cent growth recorded in the same period in 2023. It also showed that industry grew the most, by 6.8 per cent, followed by agriculture with 4.1 per cent and services with 3.3 per cent. He said these revealed signs of a resilient economy.

He stressed that the implementation of key structural reforms is crucial to strengthening the country’s overall economic recovery effort. “The ongoing structural reforms will not only stabilize the macroeconomic environment but also provide a solid foundation for sustainable growth and development in the financial sector,” Alhaji Yakubu-Tali said.

The ADB Managing Director expressed confidence that the financial sector will benefit greatly from these positive economic indicators. He believes that with the right policies and continued efforts to maintain fiscal discipline and monetary stability, the financial sector will experience solid growth, leading to a stronger and more resilient economy.

Alhaji Yakubu-Tali reiterated ADB’s commitment to supporting the economic recovery process by providing accessible and affordable financial services to its clients and the general public. “ADB remains committed to playing a key role in promoting economic growth and financial inclusion across Ghana,” he stated.

Agricultural Development Bank PLC is in the final stages of an additional capital injection. The bank has also opened its 89^t network location in Ejisu, next to the Ejisu Divisional Police Office in Ashanti. The old ADB branch (now Ejisu Market Agency) will also continue to operate after renovation to complement the new branch.