Ghana’s benchmark interest rate, the Ghana Reference Rate (GRR), reduced to 10.02% in June. This marks a notable drop from 14.58% recorded in February. The Importers and Exporters Association of Ghana now urges commercial banks to significantly lower their lending rates.
This call follows the substantial decline in the GRR. The Association’s Executive Secretary, Samson Asaki Awingobit, stated that this drop should lead to more affordable credit. Small and Medium-sized Enterprises (SMEs) and other industries heavily rely on bank financing. Cheaper credit would help these businesses grow and create jobs.
This reduction in the GRR reflects improvements in Ghana’s overall economic stability. Falling inflation and other key macroeconomic indicators support this trend. The government aims to make the benefits of economic stabilization tangible for the private sector. Lower lending rates are crucial for stimulating business activity and investment.
Mr. Asaki expressed concern that many commercial banks still lend at rates between 18% and 24%. He believes lending rates should fall further from 19%, ideally to 14% or 15%. This reduction would better reflect the current GRR. He stressed that banks use indicators like the Reference Rate and inflation to price their loans.
Businesses should therefore benefit from the improving economic environment. Lower borrowing costs will encourage investment and expansion. Mr. Asaki encouraged businesses seeking loans to actively negotiate for better terms. Banks, he argued, can no longer justify high lending rates when the benchmark rate has fallen considerably.
The GRR dropping is a positive sign for Ghana's economic future. The African Development Bank (AfDB) projects Ghana's economy to expand by 5% in 2026. The International Monetary Fund (IMF) team is also expected to finish Ghana’s final programme review soon. These developments suggest a strengthening economic outlook.
Mr. Asaki also addressed the recent rise in inflation. Inflation increased from 3.4% in April to 3.7% in May. He described this increase as modest and manageable. He noted it is significantly lower than the double-digit inflation rates of previous years. Mr. Asaki maintained that a 3.7% inflation rate remains supportive of business activity.
He further supported government efforts to reduce Ghana's import bill. Specifically, he mentioned food imports like rice. Strengthening local production will retain more resources within the economy. It will also create jobs and improve long-term economic resilience.
Mr. Asaki appealed to the Bank of Ghana. He asked them to ensure that these GRR reductions translate into lower commercial bank lending rates. The Ghana Reference Rate enhances lending transparency by serving as a loan pricing benchmark. Businesses now keenly watch if commercial banks will adjust their rates in response.