GUTA Demands Single-Digit Lending After BoG Rate Shift
By Praisebell Rosemond Larbi
The Ghana Union of Traders’ Associations (GUTA) has intensified its call for the Bank of Ghana (BoG) to fast-track reductions in commercial lending rates, urging a transition into single-digit territory as a critical step to support private-sector growth and business expansion.
The renewed demand follows BoG’s January 28, 2026 decision to slash the Monetary Policy Rate (MPR) by 250 basis points, bringing it down from 18% to 15.5%. While traders welcomed the move as a positive signal, GUTA’s leadership argues that the pace of relief for businesses remains insufficient, given the strong macroeconomic recovery Ghana is currently experiencing.
GUTA President Clement Boateng emphasized that with headline inflation falling sharply to 5.4% by December 2025, there is little justification for commercial lending rates remaining above 20%.
“The Governor shouldn’t wait until the near end of his term before lending rates can be accessed at single digits. Processes must be fast-tracked so that maybe in the next year or two, lending rates are low enough for businesses to borrow affordably and expand their operations,” Mr. Boateng stated in a recent interview.
Despite the central bank’s aggressive rate cuts totaling 900 basis points over the past year, average commercial lending rates are still around 20.45%, well above the MPR. Banks often cite legacy non-performing loans (NPLs) and operational risks as reasons for maintaining high rates, even as the Cedi remains stable and foreign reserves rise.
GUTA argues that single-digit lending is essential for traders and small and medium enterprises (SMEs) to fully leverage the African Continental Free Trade Area (AfCFTA). Currently, local SMEs face difficulties competing with foreign firms that access credit at rates as low as 2–3%. Affordable financing, the association says, is the only way to enhance competitiveness and stimulate domestic trade.
The push for lower rates is backed by improving macroeconomic conditions, including:
• Inflation: Declined from 23.8% in late 2024 to 5.4% by year-end 2025.
• Currency stability: The Cedi appreciated over 40% against the US dollar in 2025.
• International reserves: Reached $13.8 billion, equivalent to nearly six months of import cover.
For Ghanaian traders, high lending rates act as a hidden tax, constraining expansion, investment, and job creation. GUTA warns that without urgent policy intervention, local businesses may continue to struggle while foreign competitors thrive.
Mr. Boateng urged the BoG and commercial banks to align lending rates with the current economic reality, stating that policy focus must now shift from merely ensuring stability to actively supporting the recovery of the real sector, SMEs, and job creation.
“We are hopeful that with decisive action, businesses will have the credit they need to grow, compete, and contribute meaningfully to Ghana’s economic development,” he concluded.
