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Strategic Reforms to Strengthen Ghana’s Financial Safety Net
As part of efforts to enhance the country’s financial safety net and ensure readiness for payouts during institutional distress, the Ghana Deposit Protection Fund is set to undergo significant strategic changes. This was announced by the Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, during a recent event.
Diversification for Liquidity and Value Preservation
The fund will be diversified into gold, foreign exchange reserves, and high-grade sovereign securities. This approach aims to maintain both liquidity and value preservation. The Governor emphasized that these reforms are essential to future-proofing the country’s deposit insurance framework, which must evolve alongside the financial system it aims to protect.
Active Portfolio Management Approach
A key element of the reform agenda involves shifting from passive reserve accumulation to an active portfolio management strategy. This new investment approach will involve allocating resources across various assets, including gold, FX reserves, high-grade sovereign bonds, and supranational instruments. The goal is to ensure that the fund remains liquid and retains its value, even in times of economic uncertainty.
Emergency Credit Lines and Funding Arrangements
In addition to diversification, the Corporation is exploring the establishment of emergency credit lines and formal backstop funding arrangements. These measures are intended to guarantee that liquidity is available when needed, ensuring the fund can meet its obligations swiftly during crises.
“Our goal is to ensure that GDPC is always payout-ready—because in a crisis, timing is everything,” Dr. Asiama stated.
Dual-Fund Deposit Insurance System
Ghana currently operates a dual-fund deposit insurance system. Fund A covers commercial banks, while Fund B supports Specialized Deposit-taking Institutions (SDIs), such as savings and loans companies and microfinance institutions. While Fund A is reported to be on track, Fund B remains undercapitalized.
“The vulnerabilities often lie with SDIs, and our response must be bold,” Dr. Asiama said, highlighting the need to accelerate premium collection to build up reserves in this segment.
Legislative Reforms for Enhanced Mandate
The Governor also reiterated the importance of legislative reform to expand the Corporation’s mandate beyond reimbursement to include early intervention powers. This would bring Ghana’s system closer to the “pay-box plus” model adopted internationally. Under this framework, deposit insurers are equipped to engage in resolution and crisis management rather than acting only after failures occur.
Parliament is expected to consider amendments to the Ghana Deposit Protection Act in the coming months, reflecting the urgency of these reforms.
Revised Strategic Plan and International Standards
In addition to financial and legal reforms, the new GDPC board will oversee a revised strategic plan post-2025 that aligns with international standards. This includes integrating Environmental, Social, and Governance (ESG) principles, increasing digitization, and enhancing cybersecurity protocols.
“From digital onboarding to real-time claims processing, the GDPC must meet depositors where they are—on their phones, in their communities, and in their languages,” the Governor said.
AI-Based Anomaly Detection and Compliance
Plans also include institutionalizing AI-based anomaly detection in Single Customer View (SCV) data and enforcing compliance among financial institutions. This is aimed at ensuring that depositor records are clean and current, which is critical for building depositor trust.
Focus on Human Capital
Beyond infrastructure and systems, human capital will be a key focus for the incoming board. Capacity building in risk-based resolution planning, digital forensics, cybersecurity, and global governance frameworks will be prioritized. These initiatives aim to strengthen the overall resilience and effectiveness of the Ghana Deposit Protection Corporation.
