Lending conditions in Ghana improved over the course of 2025, softening the impact of previously elevated borrowing costs on the economy. According to the Summary of Economic and Financial Data released on 27 January 2026, the average lending rate declined from 30.07 per cent in January 2025 to 20.45 per cent by December 2025, marking one of the most notable drops in interest rates in recent years.
The figures suggest that monetary conditions have become more favorable.. A near 10-percentage-point reduction in lending rates suggests lower borrowing costs, improved liquidity conditions, and the potential for renewed private sector activity. The trend reflects the cumulative impact of macroeconomic stabilisation efforts, relative currency stability, and easing inflationary pressures over the course of the year.
Beneath the headline numbers lies a more complicated reality. While borrowing has become cheaper, access to credit remains uneven, and the sectors most critical to long-term economic transformation, particularly manufacturing, continue to face significant financing constraints.
Banks acknowledge that lower lending rates have improved affordability, but many remain highly selective in their lending decisions. Risk considerations still dominate credit allocation, with financial institutions prioritising activities that offer quick turnover and predictable cash flows. As a result, a growing share of available credit is being channelled toward import-related trading activities, which banks generally view as safer and easier to manage.
Importers, especially those dealing in essential consumer goods and fast-moving products, often operate on shorter cash cycles and are less exposed to long-term policy shifts. These characteristics make them more attractive to lenders seeking to protect asset quality in an uncertain operating environment.
Manufacturing, by contrast, continues to be perceived as high risk. Despite its importance for job creation, export growth, and value addition, the sector is constrained by policy inconsistency, regulatory uncertainty, and high operating costs. Frequent changes in taxes, import duties on raw materials, energy pricing structures, and industrial incentives make long-term planning difficult for manufacturers and raise concerns among lenders about project viability.
These challenges are compounded by structural issues such as high utility costs, logistics bottlenecks, exposure to exchange rate movements affecting imported inputs, and competition from cheaper imports. Together, they weaken manufacturers’ balance sheets and increase the likelihood of loan defaults, reinforcing banks’ cautious stance even in a lower interest rate environment.
The concentration of credit toward importers has wider implications for the economy. While import trade supports market supply and consumption, an excessive tilt toward trading activities risks deepening trade imbalances, limiting domestic production, and constraining employment growth.
Lawrence Sackey, a Research Manager at the Ghana Association of Banks (GAB), has noted that, “holistically, if you look at it from a macroeconomic perspective, this will not work out well for the country.” He warns that without deliberate efforts to channel cheaper credit into productive sectors, the benefits of falling interest rates may not lead to sustainable economic growth.
Lower lending rates should, in theory, stimulate investment in machinery, technology, and expanded local production. However, when banks favour short-term trade finance over long-term productive lending, the structural transformation of the economy remains elusive, and industrialisation efforts risk losing momentum.
The sharp decline in lending rates in 2025 represents a significant macroeconomic achievement and a potential turning point for Ghana’s private sector. Whether this improvement becomes a catalyst for broad-based industrial growth or merely offers temporary relief for import-driven commerce will depend on policy consistency, risk-sharing mechanisms, and the ability to restore confidence in the manufacturing environment. For now, credit is cheaper, but many manufacturers may still struggle to secure it due to banks’ cautious approach.
