Ghana’s commitment to transitioning toward a green economy is undeniable. But the real cost of doing green business, especially in an unpredictable macroeconomic environment, may be too high for many enterprises to bear.
In recent years, Ghana has made headlines for setting ambitious climate goals. Yet behind the optimism lies a financing conundrum. Even as inflation has dropped from its dizzying 54% peak in 2022 to 23.1% by mid-2025, the structural weaknesses in Ghana’s credit and fiscal systems remain stubbornly in place.
Green enterprises, often requiring patient capital and longer investment horizons, are caught in a chokehold of high interest rates and limited access to credit. Lending rates peaked at 36% in 2022 and have only inched down to around 30%. For over a decade, Ghana’s average lending rate has hovered near 25%, “excessively high for businesses investing in green solutions,” the IMANI report notes, especially since “green projects tend to pay off over the long term but are associated with high upfront costs.”
Private sector credit has also barely budged. Between 2014 and 2024, real capital expansion to the private sector grew by just 1.4%, with the non-performing loan rate averaging a worrisome 16.9%. These numbers signal a crisis of both supply and risk appetite in Ghana’s banking sector. According to IMANI, “this shows a dual challenge of low credit to the private sector and high lending risk,” creating a hostile environment for nascent green ventures.
But it’s not just banks that are failing to step up.
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Ghana’s fiscal tools, particularly green taxes and subsidies, are not fit for purpose. The government has introduced environmental taxes like the sanitation and pollution levy, but these have largely functioned as revenue generators rather than tools to stimulate green innovation. “The existing green fiscal policies are poorly targeted and mainly revenue mobilization instruments,” IMANI points out. “They have not been strategically used to drive investments in climate solutions.”
Unlike Kenya, which incentivizes low-carbon business models with a 15% corporate tax break for companies engaged in emissions trading, Ghana’s green taxation landscape lacks sharp focus. Carbon pricing remains off the table. The government argues that “the targeted sectors are already overtaxed” and that introducing a carbon tax would worsen the cost of doing business and household living expenses.
Instead, Ghana is leaning on international carbon markets under the Article 6.2 framework of the Paris Agreement. The country hopes to trade about 24 million metric tonnes of CO₂e in conditional reductions, and has set up a Carbon Market Office to oversee credit trading. But critics question whether such measures can truly compensate for weak domestic fiscal strategy. “There is no specific tax incentive package available for firms and individuals whose business activities align with the NDCs,” the report states.
Key Takeaways:
- Lending rates remain prohibitively high for green businesses, averaging 30% in 2025.
- Private sector credit is stagnant; real capital expanded by just 1.4% between 2014–2024.
- Ghana’s green taxes are designed for revenue, not innovation or investment.
- There is no domestic carbon pricing, and no targeted fiscal support for NDC-aligned businesses.
- Carbon credit trading has begun under the Article 6.2 framework, but it lacks complementary local tax and policy incentives.
The missing links, effective credit pipelines, green fiscal reform, and coherent carbon incentives, are too vital to ignore. Without them, Ghana’s green business ecosystem risks becoming a mirage: present in vision, absent in structure.
And yet, buried beneath the volatility, a quiet shift is starting to take root, among regulators, banks, and even local entrepreneurs. But will that momentum be enough to withstand the weight of macroeconomic headwinds?
That’s a story still unfolding.
