Governance Expert Urges Banks to Cut Lending Rates
By Praisebell Rosemond Larbi
Leadership and Governance Expert, Professor Emeritus Stephen Adei, has called on banks to take advantage of the recent decline in interest rates by lowering their lending rates to support the revival of Ghana’s real sector.
Speaking in an interview with Kwaku Attakora Dwomoh, Esq. on ZED FM’s Current Affairs Show The Focus on ZED 101.9FM, Professor Adei said the easing of interest rates presents a critical opportunity for financial institutions to stimulate economic activity, particularly for businesses struggling to recover from recent macroeconomic shocks.
According to him, high lending rates have for years constrained growth in the productive sectors of the economy, and a reduction in borrowing costs could provide much-needed relief to businesses, create jobs, and accelerate recovery.
“The drop in interest rates creates space for banks to respond positively by reducing lending rates. This is how the real sector can begin to breathe again,” Professor Adei said.
He described Ghana’s inflation outcome for 2025 as a major milestone, noting that the decline to 5.4 per cent represents a “tremendous achievement” given the economic turbulence of the preceding years. He added that the moderate appreciation of the cedi has further contributed to macroeconomic stability, helping to calm prices and restore a measure of confidence in the economy.
Professor Adei said these developments, while encouraging, must be consolidated through prudent policy choices and responsible actions by both public and private sector actors.
Beyond monetary and financial conditions, he stressed the importance of structural reforms, particularly in agriculture. He argued that Ghana must deliberately pursue self-sufficiency in food production to reduce its dependence on imports, which continue to expose the economy to external shocks and foreign exchange pressures.
“We cannot continue to rely heavily on imported food. Agriculture must be taken seriously if we want sustainable stability,” he said.
In a broader assessment of the economy, Professor Adei noted that Ghana showed clear signs of recovery in 2025, despite lingering challenges. He said while the country is not yet completely out of difficulty, the current economic outlook provides a platform for further improvement if reforms are sustained.
Reflecting on the recent past, he recalled the severe economic challenges Ghana experienced, during which key indicators deteriorated sharply. Although he acknowledged the impact of the COVID-19 pandemic, Professor Adei said Ghana’s response to the crisis earned international commendation, making it difficult to attribute the full scale of the subsequent economic crisis solely to the pandemic.
He also criticised aspects of the country’s debt restructuring process, particularly its impact on pensioners. According to him, the hardship imposed on pensioners raised serious governance and ethical concerns that require accountability rather than justification.
“The issue of pensioners should not be explained away. It requires accountability,” he stressed.
Professor Adei concluded by urging policymakers to learn from past missteps, protect vulnerable groups, and use the current period of relative stability to implement reforms that support inclusive growth and long-term economic resilience.
