President John Dramani Mahama has declared that the era of government competing with the private sector for commercial credit is over, paving the way for Ghanaian businesses to secure affordable financing to expand operations and create jobs.
Speaking during a working visit to indigenous manufacturing giant Kasapreko Company Limited, the President revealed that disciplined fiscal management and targeted economic policies under the Resetting Ghana Agenda have significantly reduced interest rates and stabilized the currency, turning the local business environment into a fertile ground for investment.
In simple terms, “crowding out” happens when a government borrows heavily from local commercial banks to cover its expenses, leaving little to no money behind for private companies. In the past, this intense competition forced banks to charge skyrocketing interest rates to ordinary business owners. Forced to borrow at high costs just to stay afloat, businesses had to pass those heavy financial burdens onto consumers through frequent price hikes, which continuously drove up nationwide inflation.
“Before, government was crowding out the private sector because government was taking all the credit. If the private sector went to the banks, there was no credit available, and the interest rates demanded were excessive,” President Mahama observed. “We are exercising fiscal discipline, making sure government lives within its means, and creating space for the private sector to grow.”
The President noted that commercial interest rates have dropped drastically from previous highs of around 32 percent, with some business operators now accessing loans at single-digit rates as low as 9 percent.
According to President Mahama, the policy shift, anchored by the 24-Hour Economy Initiative and the Accelerated Exports Development Programme, is delivering tangible results for both local and foreign investors. He highlighted that Foreign Direct Investment (FDI) leaped from $624 million in 2024 to $2.62 billion in 2025, calling on domestic entrepreneurs to take full advantage of the favourable climate.
“All the testimonies I have heard this morning, from Nestlé to Kasapreko, confirm that the investment environment has never been so good,” he said. “If foreigners have confidence in our economy and are coming in to invest, then Ghanaians must also seize the opportunity.”
