Ghana holds Africa's highest policy rate at 14.0%, according to the African Development Bank's (AfDB) 2026 African Economic Outlook. This places Ghana first among 44 African nations. The Democratic Republic of Congo and Egypt follow in second and third positions, respectively.
This high policy rate makes the cost of borrowing for businesses and individuals expensive. Despite significant reductions over the past year, the average lending rate remains high. High borrowing costs can slow down economic growth and investment across various sectors.
Ghana’s economic narrative has involved efforts to curb inflation and stabilize the macroeconomic environment. The Bank of Ghana previously reduced its Monetary Policy Rate (MPR) from a high of 28.0% in early 2025. This 14-percentage point drop occurred between January 2025 and May 2026. The reduction aimed to stimulate economic activity by making credit more affordable for Ghanaians.
The AfDB report highlighted that monetary policy decisions in 2025 across Africa responded to inflation dynamics. A decrease in inflation encouraged central banks to cut interest rates. African central banks, on average, cut policy rates by 0.98 percentage points in 2025. This average reduction reached 1.33 percentage points by the first quarter of 2026. Four countries, including Ghana, significantly reduced their policy rates by eight percentage points or more.
Data from the Bank of Ghana’s May 2026 Summary of Economic and Financial Data confirmed the high average lending rate. In April 2026, the average lending rate stood at 16.33%. This rate was 20.58% in January 2026 before falling to 19.17% in February 2026. It further decreased to 17.74% in March 2026. Similarly, the Ghana Reference Rate dropped sharply to 10.06% in April 2026 from 15.68% in January 2026.
In May 2026, the Bank of Ghana maintained the policy rate at 14.0%. The Monetary Policy Committee (MPC) cited potential risks to future inflation and economic growth. These risks include possible spillover effects from geopolitical tensions into the domestic economy. The MPC stated it will continue to monitor incoming data. It will also take appropriate policy actions when necessary. The Committee also amended the Cash Reserve Ratio to a uniform 20 percent, effective June 4, 2026.
The high policy rate implies ongoing challenges for Ghana's private sector. Businesses seeking expansion or investment will face elevated financing costs. This could deter new ventures and hinder job creation. Investors will closely watch the Bank of Ghana’s next moves. Any further adjustments to the policy rate will signal the central bank's outlook on inflation and economic stability. Maintaining a high policy rate, even with recent cuts, reflects the central bank's cautious approach to managing the economy amidst global uncertainties.