Ghana Tops Africa in Lending Rates – AfDB
Ghana has been ranked as the African country with the highest lending rate, despite implementing one of the continent’s most aggressive monetary policy easing cycles, according to the African Development Bank’s (AfDB) African Economic Outlook 2026 Report.
The report places Ghana first among 44 African countries, with an average lending rate of 14.0 percent, ahead of the Democratic Republic of Congo and Egypt, which rank second and third respectively. The finding highlights persistent challenges in reducing borrowing costs for businesses and households, even as macroeconomic indicators continue to improve.
According to the AfDB, monetary policy across Africa in 2025 was largely shaped by easing inflationary pressures, prompting several central banks to cut interest rates in a bid to stimulate growth and support private sector activity. The Bank noted that policy rates across the continent were reduced by an average of 0.98 percentage points in 2025, with cumulative cuts rising to 1.33 percentage points in the first quarter of 2026.
“Monetary policy stances in 2025 were shaped by the dynamics of inflation across the continent. The cooling off inflationary pressures provided impetus for interest rate cuts by African central banks,” the report stated.
Ghana was identified among a group of countries, including Sierra Leone, Egypt and the Democratic Republic of Congo, that implemented some of the steepest policy rate reductions, with cuts of eight percentage points or more as inflationary pressures eased.
Between January 2025 and May 2026, the Bank of Ghana reduced its Monetary Policy Rate from 28.0 percent to 14.0 percent, marking one of the most significant rate cuts on the continent. The move reflected improving economic fundamentals, including declining inflation, a relatively stable cedi and strengthening external sector performance.
However, despite the sharp reduction in the policy rate, commercial lending rates have remained elevated. Data from the Bank of Ghana shows that average lending rates declined gradually from 20.58 percent in January 2026 to 19.17 percent in February, 17.74 percent in March, and 16.33 percent in April 2026.
Similarly, the Ghana Reference Rate, a key benchmark used in loan pricing, fell from 15.68 percent in January 2026 to 10.06 percent in April 2026. Analysts say that although these figures show a downward trend, the pace of adjustment has been slower than expected relative to the policy rate cuts.
The AfDB report suggests that this lag continues to limit the transmission of monetary policy to the real economy, particularly for small and medium-sized enterprises (SMEs) that rely heavily on bank credit for expansion and operational financing.
Higher lending rates, analysts warn, continue to increase the cost of doing business, suppress private sector investment and constrain growth in key sectors such as agriculture, manufacturing and commerce.
At its May 2026 Monetary Policy Committee meeting, the Bank of Ghana maintained the policy rate at 14.0 percent, citing emerging risks to the inflation and growth outlook, including geopolitical tensions and global market uncertainties.
The central bank also introduced a revised Dynamic Cash Reserve Ratio framework, setting a uniform 20 percent reserve requirement in domestic currency for all banks, effective June 4, 2026.
Economists, however, maintain that continued macroeconomic stability, combined with deeper financial sector reforms, could gradually improve credit conditions and enhance access to affordable financing in the medium term.
