In a policy move that has jolted global finance, U.S. President Donald Trump has ordered credit card interest rates capped at 10% for one year starting January 20, 2026.
Framed as a crackdown on “rip‑off” rates that can soar to 30%, the measure has been welcomed by debt‑burdened households but has ignited fierce debate over price controls and market distortions. As the populist wave spreads, Ghanaian observers are asking whether such a cap could ever be feasible in one of the world’s most expensive credit markets.
At first glance, the appeal is obvious. Ghanaian consumers and SMEs face borrowing costs that routinely range between 24% and 35%. A 10% ceiling would slash financing costs, energize the government’s “24‑Hour Economy” agenda, and inject demand into retail and hospitality. For a country where credit penetration remains low, the shock could feel like a stimulus package.
But Ghana’s financial realities make a 10% cap nearly impossible. The Monetary Policy Rate currently sits at 18%. A bank borrowing at 18% cannot lend at 10% without incurring an automatic loss of 8% per cedi. Even “risk‑free” government Treasury bills yield around 10.3%, meaning a cap would undercut the sovereign benchmark itself. Unlike the U.S., where lower benchmark rates leave some margin, Ghana’s cost of funds makes a cap structurally unworkable.
Credit cards are unsecured debt, and Ghana’s high non‑performing loan ratios demand a steep risk premium. Forcing banks to lend at 10% would likely trigger mass cancellations of credit cards, pushing consumers toward unregulated “Momo” lenders or traditional loan sharks who charge multiples of bank rates. The unintended consequence: less financial inclusion, not more.
Though inflation has cooled to 5.4%, Ghana’s economy remains far more volatile than the U.S. Banks must price loans with future shocks in mind. A rigid cap would strip them of flexibility, risking a freeze in private‑sector credit. Analysts argue that rather than blunt caps, Ghana should pursue transparency and competition, stricter disclosure of Annual Percentage Rates (APR) and encouragement of digital lenders to drive down costs organically.
Trump’s cap may be politically potent in a low‑rate U.S. environment, but in Ghana it would be toxic. “A 10% ceiling here is not relief, it’s a poison pill,” one Accra‑based economist noted. The sustainable path is to keep inflation anchored near 5%, reduce government borrowing, and allow market rates to drift downward. The Bank of Ghana has already set a medium‑term target of 10% lending rates by 2028, achievable only through macroeconomic discipline, not fiat decrees.
What plays as populist affordability in Washington could trigger systemic risk in Accra.
