Ghana has emerged as the African country with the highest lending rate despite implementing one of the continent’s most aggressive monetary policy easing measures over the past year, according to the African Development Bank’s (AfDB) African Economic Outlook 2026 Report.
The report ranked Ghana first among 44 African countries with a lending rate of 14.0 per cent, ahead of the Democratic Republic of Congo and Egypt, which placed second and third respectively.
The findings highlight a persistent challenge for businesses and households seeking affordable credit, even as the Bank of Ghana continues to lower borrowing costs in response to easing inflationary pressures and improving macroeconomic conditions.
According to the AfDB, monetary policy across Africa in 2025 was largely driven by declining inflation, prompting many central banks to reduce interest rates to stimulate economic activity and support private sector growth.
“Monetary policy stances in 2025 were shaped by the dynamics of inflation across the continent. The cooling off inflationary pressures provided impetus for interest rate cuts by African central banks. In 2025 alone, policy rates were cut by an average of 0.98 percentage points. Including the first quarter of 2026, the average policy rate cut amounts to 1.33 percentage points,” the report stated.
The AfDB noted that Ghana was among four countries, alongside Sierra Leone, Egypt and the Democratic Republic of Congo, that reduced policy rates by eight percentage points or more as inflation moderated significantly.
Between January 2025 and May 2026, the Bank of Ghana cut its Monetary Policy Rate from 28.0 percent to 14.0 percent, representing one of the sharpest reductions on the continent.
The central bank’s policy easing reflected growing confidence in the country’s economic recovery, supported by a stronger cedi, declining inflation and improving fiscal indicators.
Despite these gains, commercial lending rates remain elevated, raising concerns about access to affordable financing for businesses, particularly small and medium-sized enterprises (SMEs), which rely heavily on bank credit to expand operations and create jobs.
Data from the Bank of Ghana showed that the average lending rate declined from 20.58 percent in January 2026 to 19.17 percent in February, 17.74 percent in March and 16.33 percent in April 2026.
Similarly, the Ghana Reference Rate, which serves as a benchmark for loan pricing, fell significantly from 15.68 per cent in January 2026 to 10.06 per cent in April 2026.
Although lending rates have been trending downward, analysts say the pace of reduction has been slower than the decline in the policy rate, suggesting that businesses are yet to fully benefit from the central bank’s monetary easing measures.
Higher lending rates continue to increase the cost of doing business, limit private sector investment and constrain economic expansion, particularly in sectors such as manufacturing, agriculture and commerce where access to affordable credit is critical.
At its May 2026 Monetary Policy Committee meeting, the Bank of Ghana maintained the policy rate at 14.0 percent, citing potential risks to the inflation and growth outlook.
The Committee said it would continue to monitor incoming economic data, including the possible impact of geopolitical tensions on the domestic economy, and take appropriate policy measures when necessary.
The central bank also announced a revision to the Dynamic Cash Reserve Ratio framework, introducing a uniform reserve requirement of 20 per cent to be maintained in domestic currency by all banks, effective June 4, 2026.
Economists believe the combination of lower inflation, improving macroeconomic stability and a sustained decline in lending rates could help stimulate investment and support Ghana’s economic growth prospects in the coming months.
