The International Monetary Fund (IMF) has said that the recent actions taken by the Bank of Ghana (BoG) on some banks will boost confidence in the financial sector.

The IMF Country Representative of Ghana Dr Natalia Koliadina told Accra-based Joy FM that BoG’s action will help stabilise the sector.

She argued that although the BoG clampdown is belated, the timing is still right.

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“I think that these issues probably have been accumulated over many years and it is actually to the great benefit of the economy that the Bank of Ghana has been taking these very bold and decisive measures.”

“It is very timely because the last thing that you would like to see is diminishing confidence in the banking sector,” she added.

Her comments come after the BoG revoked the licences of 5 local banks for breaching several banking regulations. This was barely a year after the BoG closed down UT Bank and Capital Bank in August 2017.

The two banks were closed down because their liabilities were more than their assets, forcing the Regulator to allow GCB to take their good assets, while PricewaterhouseCoopers recovers the bad debts.

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The IMF had earlier published several reports warning the Bank of Ghana to take some corrective measures within the banking sector. Most people believe if the BoG had listened to the IMF earlier, the sector would have been cleaned earlier.

Meanwhile, the IMF has also warned that Ghana’s debt stock is likely to increase due to the over GHS8 billion spent in the wake of the banking collapse.

"This is because this is government debt and it would obviously be classified as government debt,” she explained.