The Bank of Ghana (BoG) is set to roll out a new directive aimed at reinforcing local decision-making authority and ensuring board accountability within foreign-owned banks operating in the country.
This move comes in response to concerns about the outsourcing of major credit and risk decisions to offshore entities, which often fall outside Ghana’s regulatory oversight.
Speaking at the Post-MPC Meeting with CEOs of Banks, BoG Governor Dr. Johnson P. Asiama stressed the need for Ghana-based boards to exercise genuine authority rather than merely endorsing decisions made abroad.
“This undermines the very basis of effective governance and creates unacceptable regulatory blind spots,” Dr. Asiama stated.
Key Provisions of the Directive
The upcoming directive, aligned with Sections 9 and 13 of the Corporate Governance Directive, will outline the following measures:
- Local boards and management must retain substantive authority over all material credit decisions and risk-related actions within Ghana.
- Any delegation of key decision-making to foreign entities will require prior approval from the BoG.
- Boards that endorse decisions made without proper local scrutiny will be in violation of governance regulations and may face regulatory sanctions.
- Core risk and capital planning processes—including ICAAP—must reflect local economic realities in accordance with Basel II Pillar 2 guidelines.
- Banks circumventing local governance will undergo fitness and propriety reviews, particularly where directors are found to be neglecting their fiduciary responsibilities.
Dr. Asiama emphasized that this directive does not discourage foreign investment but rather seeks to enhance accountability within the banking sector.
“We welcome global capital and expertise – but we cannot accept governance frameworks that strip Ghana-based boards of meaningful responsibility,” he asserted.
Outsourcing Directive Takes Effect July 1
Additionally, the BoG has reinforced its stance on financial outsourcing through a separate directive set to take effect on July 1, 2025. The central bank has urged financial institutions to re-evaluate existing outsourcing arrangements, including those related to data management, credit assessment, and managerial control.
Institutions must comply with:
- The Data Protection Act (Act 843), particularly where customer data is transferred offshore without explicit consent.
- The BoG Cybersecurity Directive, which mandates stringent security measures for digital infrastructure and sensitive information.
Broader Implications
Dr. Asiama warned that the increasing trend of outsourcing key financial decisions could weaken the BoG’s supervisory authority, hinder local professionals’ development, and slow leadership growth within the sector.
