Banks in Ghana ranked 4th in Sub-Saharan Africa as safest from natural disasters

Banks in Ghana are ranked 4^th in Sub-Saharan Africa (SSA) by way of Pure Disasters Rating.

In accordance with Fitch Options Local weather Change and Alternatives for SSA Banking Sectors report, banks in South Africa are the most secure from pure disasters.

Coted’lvoire and Botswana positioned 3^rd and 4^th respectively.

Within the high 10 had been Rwanda (5^th), Senegal (6^th), Namibia (7^th), Kenya (8^th), Gabon (9^th) and Lesotho (10^th).

Banks in South Sudan, Dr Congo and Somalia have the best rating for pure catastrophe.

In accordance with Fitch Options, the banking sectors throughout Sub-Saharan Africa (SSA) face vital challenges on account of local weather change, which have been categorised into 4 major threat components: bodily dangers, transition dangers, monetary market volatility and restricted uptake of local weather insurance coverage.

First, banks face bodily dangers from local weather change, which refers back to the direct affect on belongings from excessive climate occasions, rising temperatures and sea ranges. 

These dangers, the UK-based agency mentioned, are significantly pronounced in SSA as a result of area’s heavy reliance on agriculture and pure assets and low ranges of resilience to local weather change.

“A good portion of SSA’s financial system relies on rain-fed agriculture, which is very delicate to local weather variability. For instance, almost two-thirds of Africa’s financial output depends on the pure surroundings, making the area extraordinarily susceptible to droughts, floods, and different excessive climate occasions”.

“This dependency implies that antagonistic climate circumstances can result in substantial financial losses, with estimated losses of US$7-15 billion per 12 months on account of local weather change”, it added.

It continued that climate-related disruptions in these sectors can result in vital job losses and diminished financial output, additional straining the monetary sector.

It added this impacts the flexibility of debtors to repay loans and will increase the danger of defaults for banks.

It in flip weighs on banks’ capital and earnings, threatening the general stability of the monetary sector.

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