The Governor of the Bank of Ghana, Dr Johnson Asiama, says building strong foreign reserves and lowering credit costs should not be seen as competing priorities, but as complementary tools for driving Ghana’s industrial transformation.
Speaking at the Ghana Exim Fireside Chat held in Accra in March 2026, Dr Asiama addressed growing debate over whether the country should focus on strengthening external buffers or invest more aggressively in domestic production to reduce import dependence.
Ghana ended 2025 with US$13.8 billion in gross international reserves, the highest level in the country’s history, equivalent to about 5.7 months of import cover, up from US$8.9 billion the previous year.
The improvement was driven largely by the Domestic Gold Purchase Programme, which processed more than 110 tonnes of gold valued at about US$11.4 billion in foreign exchange over the period.
As reserves have grown under the Ghana Accelerated National Reserve Accumulation Policy, which targets 15 months of import cover by 2028, questions have emerged about whether such resources could be better used to support domestic industry.
Responding to the debate, Dr Asiama said the issue was not a choice between reserves and investment, but how to create the right conditions for investment to grow.
“That is exactly why lending rates have to come down. The way you build industry is by making it affordable to invest,” he said.
He acknowledged the importance of building domestic productive capacity but explained that reducing the cost of capital was the most effective way to achieve that goal.
According to him, when lending rates exceed 30 percent, most industrial investments become unviable because expected returns are unlikely to exceed the cost of borrowing.
He said this explained the importance of the reduction in lending rates from above 30 percent to below 20 percent during 2025, which he described as a major step toward improving the investment climate.
The Governor explained that the debate over reserves and industrial development should be seen as interconnected, since both influence the broader economic environment.
He noted that imports were not necessarily a policy failure, explaining that all countries import goods based on comparative advantage.
The key issue, he said, was whether the composition of imports was shifting toward capital goods and specialised inputs that support long-term production.
Dr Asiama said as domestic industry expands and credit becomes more affordable, Ghana’s import structure should gradually move in that direction.
He further explained that strong reserves help stabilise the exchange rate, which in turn reduces risk premiums and borrowing costs.
Lower borrowing costs, he said, encourage investment, which then expands productive capacity and reduces dependence on imports over time.
He warned that weak reserves expose economies to external shocks and often force higher interest rates, which makes it difficult for businesses to invest.
“Our reserves levels are comfortable. The contingency measures are in place,” he said.
Dr Asiama added that while the debate over resource allocation was understandable, the real issue was ensuring favourable credit conditions to support private sector investment.
He said the Bank of Ghana focused in 2025 on both building reserves and reducing lending rates, describing them as complementary policies needed to support long-term economic transformation.
