Kofi Ahovi

  The average lending rate in Ghana declined significantly to 19.7 percent in February 2026, although borrowing costs remain relatively high for businesses and households. The latest data from the Bank of Ghana shows a sharp year-on-year decline from 30.12 percent recorded in February 2025, reflecting easing financial conditions within the banking sector. According to the central bank’s figures, the average lending rate began trending downward between January and May 2025, before recording a slight uptick in June 2025. However, the rate resumed its downward trajectory for the remainder of the year. In March 2025, the average lending rate stood at 29.18 percent before dropping to 27.40 percent in April and 26.90 percent in May. It edged up slightly to 27.0 percent in June, but fell again to 26.59 percent in July and continued declining to 20.45 percent by December 2025. Despite the steady decline, analysts and market watchers had anticipated a sharper reduction in lending rates, esp...

  Commercial banks are expected to reduce lending rates in the coming days after Ghana’s Reference Rate (GRR) dropped sharply to 11.71% for March, from 14.58% in February. The latest figure represents one of the steepest single-month declines in recent years in the benchmark used by banks to price loans. To be sure, the sharp fall was driven primarily by a significant decline in Treasury bill rates into the single-digit range, coupled with a marginal easing in the interbank rate. What Drove the March 2026 GRR? The March rate was determined by three key variables: Treasury bill rates (end-February) Average interbank rate (February) Monetary Policy Rate Industry analysts attribute the drop in Treasury bill yields partly to the government’s fiscal consolidation programme, which has reduced domestic borrowing, as well as excess liquidity within the banking sector. What It Means for Borrowers The decline in the GRR could trigger one of the biggest reductions in lending rates between now...

  …as BoG cuts benchmark rate by 300 basis points Last week, the Bank of Ghana’s Monetary Policy Committee announced a historic 300 basis points cut in the benchmark Monetary Policy Rate which now stands at 25%, down from the 28% at which it stood since March when it was hiked by 100 basis points. Banks and other commercial lenders in Ghana will expectedly begin cutting their average lending rates this week in response, although it is unlikely that their effective lending rate cuts will match the central bank’s own MPR cut. But whatever cuts are introduced will accelerate a process that actually began in April, when the base lending rate for all commercial banks - the Ghana Reference Rate, computed by the Ghana Association of Banks – began to fall, in line with falling inflation and even faster falling treasury bill rates. The GRR was 23.69% by the end of July, down from 28% at the start of the year, even though the interbank weighted interest rate has remained stubbornly high at 2...

  The Chief Executive of the Ghana Association of Banks (GAB), John Awuah, is projecting a reduction in interest rates on loans from August 6, 2025. According to him, this is due to the 300 basis points cut in the policy rate by the Bank of Ghana to 25%. Awuah disclosed this in an interview with Joy Business in response to concerns that commercial banks often delay in adjusting their lending rates. He, however, rejected the claim, insisting that “obviously the policy rate carries about 40% weight in the variables that determine the Ghana Reference Rate in the country”. So by next Wednesday [August 7, 2025], the commercial banks are expected to publish the new Ghana Reference Rate for August 2025 and we should see quite a good reduction in the Ghana Reference Rate,” Awuah disclosed   The Ghana Reference Rate The Bank of Ghana and the Ghana Association of Banks in 2017 launched the Ghana Reference Rate, which was described as a new credit rate to serve as a guide in the setting ...

  The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has significantly reduced the policy rate to 25 percent from 28 percent. The chairman of the committee, who is also the Governor of the BoG, Dr. Johnson Asiama made the announcement on Wednesday July 30, 2025 at a press briefing in Accra. He disclosed that majority of the 7-member committee voted to reduce the policy rate. The MPC, by a majority decision, voted to lower the monetary policy rates by 300 basis points to 25.0%. Looking ahead, the Committee will continue to assess incoming data and likely reduce the policy rate further should the disinflation trend continue”, he said. He assured that the committee remains committed to the price stability mandate while creating conditions for inclusive and sustainable growth. He pointed out that there are upside risks to the inflation outlook, which include potential supply chain challenges emanating from the global trade tensions and upward adjustment in utility tariffs. ...

  Importers and exporters are urging Finance Minister Dr. Cassiel Ato Forson to take decisive steps to help reduce the high lending rates by commercial banks. With inflation falling to 13.7 percent by end-June 2025, the importers and exporters say the prevailing interest rate environment is no longer aligned with current macroeconomic conditions and is hampering business growth. They argue that, the current average lending rate of 27 percent is excessively high and should be revised to reflect the downward trend in inflation. Commenting on the recently presented mid-year budget, the Executive Secretary of the Association, Samson Asaki Awingobit, said that lowering lending rates would offer much-needed relief for businesses. If inflation has dropped, and the fiscal policies are yielding results, then the reduction in inflation from 23.8 percent to 13.7 percent is a positive development. However, we are still facing challenges with high lending rates,” he said. “We are not reluctant ...

  The Monetary Policy Committee (MPC) of the Bank of Ghana will hold its 110th Regular Meetings from Tuesday, January 24, 2023 to Friday, January 27, 2023 to review developments in the economy. The meetings will conclude with a press conference on Monday, January 30, 2023 to announce the decision of the Committee. Last month, the Bank of Ghana increased its policy rate by 2.5 percentage points to 27%, citing risks to inflation and exchange rate concerns as reasons. This saw cost of borrowing go up marginally. The inflation forecast shows that in the outlook, inflation will likely peak in the first quarter of 2023 and settle at around 25% by the end of 2023. This forecast is conditioned on the continued maintenance of tight monetary policy stance and the deployment of tools to contain excess liquidity in the economy. There are however some risks to this forecast that would have to be monitored, including additional pressures from the proposed VAT increase, and exchange rate pressure...

  Despite concerns that the cost of loans is very high, average lending rate fell by 0.11% from June 2021 to 20.51% in August 2021. This is equivalent to 1.71% interest on loans per month. As always, the average lending rate varies among the banks and the risk associated in lending to the respective sectors. For example, some banks will offer loans as low as 16% per annum, whilst others will lend as high as 27%. But overall, it will depend on the risk profile of the customers. Also, lending to the agriculture sector is considered riskier than the manufacturing sector, and therefore credit to the agriculture sector will be higher. According to data from the Bank of Ghana, average lending rate has been falling albeit slightly, since April 2021. In January 2021, average lending rate was pegged at 20.97%, but shot up marginally to 21.02% in February 2021, and then retreated to 20.96% in March 2021. It has since then been falling from 20.93% in April 2021 to 20.85% in May 2021 and then ...