Ghana’s average lending rate is on a downward trend, at least for the past year, but at a very slow pace.
For many businesses yearning for affordable credit through lower lending rates to invest, expand, and move their trade to the next level, the decline is too slow to offer significant respite.
The latest March 2025 Summary of Economic and Financial Data published by the Bank of Ghana, reveals that the average lending rate has dropped from 32.37% in March 2024 to 30.12% in March 2025.
This drop represents a modest reduction of just 2.25 percentage points over a 12-month period.
This easing, though welcome news for businesses, has fallen short of expectations of a private sector which is battered by high cost of credit, inflation, and economic uncertainty. Below is a graphical view of the average lending rate over the past year:
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Though the central bank’s monetary policy rate has been relatively stable around 27–29%, banks have been slow to pass on the benefits to borrowers.
Despite the slow easing of Ghana’s lending rate, it still remains high, especially compared to regional peers. This is due to perceived lending risks, operational inefficiencies, and rigid pricing models.
For instance, Nigeria, Ghana’s major trading partner and a competitor under the African Continental Free Trade Area (AfCFTA) has its lending rate hovering around 18.50%. South Africa is as low as 10%. Rwanda is 15.94 while Namibia is 10.5.
In a nutshell, despite the declining rates, Ghana’s lending rate is still significantly high, above the Sub-Saharan African average.
This has very high implication on operational cost and competitiveness as businesses in Ghana becomes less competitive relative to counterparts in other countries borrowing at a lesser lending rates.
Many small and medium enterprises (SMEs) are postponing expansion plans due to high borrowing costs.
This also reflects in the high cost of goods and services as businesses that borrow at exorbitant costs are forced to pass on the costs to consumers, stoking inflationary pressures.
While the new managers of the economy under the new government are working around the clock to stabilize the macroeconomic environment with efforts to control inflation and track down yields on treasury instruments, similar attention must be paid to quicken the pace of the dropping lending rates.
For business groups such as the Ghana Union of Traders Association, (GUTA), the Association of Ghana Industries (AGI), the Ghana National Chamber of Commerce and Industry (GNCCI) among others, their call is very clear, affordable credit is very crucial for the sustainability of their businesses.
