In a move that could reshape the public sector’s access to credit, the Ghana Association of Banks (GAB) has confirmed that it will suspend lending to workers under the Controller and Accountant-General’s (CAGD) payroll scheme. The decision comes amid a sharp rise in non‑performing loans (NPLs) across the banking industry.
Chief Executive John Awuah told journalists at the GAB Annual General Meeting that the escalating default of public sector loans has become a serious challenge. He added that the action will likely affect lending rates in the near future.
Mr Awuah said the move follows a marching order from Bank of Ghana Governor Dr Johnson Asiamah to bring NPLs below 10.0% by next year. “We have begun discussions and in the coming weeks and days we are going to take an action to suspend total lending to public sector workers under the Controller and Accountant Generals payroll,” he stated. “This is serious because we cannot continue to do this to the industry where salaries are being paid but our loan repayments are not remitted.”
He warned that the industry must act to survive, adding, “We shall be forced to do this to save the industry and I can assure you that this time, we shall go ahead.” Mr Awuah further explained that earlier discussions had stalled due to intervention from higher offices, but the decision is now set to proceed within weeks.
The Association also has been tasked with partnering the Bank of Ghana to develop a framework for the full implementation of the Lenders and Borrowers Act.
Bank officials are now preparing to communicate the suspension to the public sector and to adjust lending policies accordingly. The move is expected to prompt a review of loan terms and repayment schedules for employees under the CAG payroll scheme.
