Lending Rates Must Fall to Support Businesses — BoG Governor

By Nii Trebi Hammond

The Governor of the Bank of Ghana, Dr. Johnson Asiama, has stressed the urgent need for meaningful reductions in lending rates, warning that current borrowing costs are unsustainable for businesses.

Speaking at an international conference held in Accra by the Ghana EXIM Bank, Dr. Asiama questioned the viability of high borrowing costs, stating, “If you ask me, in this country, lending rates [are] the most important. When I look at the rate at which firms have to borrow, if you borrow money at over 30%, can you really repay?”

He noted that the high cost of credit is a key factor behind rising non-performing loans (NPLs), adding, “It’s not surprising NPLs are very high. I don’t blame many of the firms that default, it’s just impossible.”

Dr. Asiama emphasized the need for deliberate policy action to address the situation, stating, “We have to do what we have to do to get lending rates down and you do it in a meaningful way.”

He also highlighted the role of strategic communication in stabilizing the economy, explaining that the Bank of Ghana has intensified its messaging to influence market expectations.

“If you notice, we do a lot of messaging nowadays. You see me talking on social media, it’s all part of the game,” he said.

According to him, years of economic instability have shaped pricing behaviour, with many businesses anticipating currency depreciation and adjusting prices accordingly.

“Everyone assumed that the cedi is going to fall by 20% next year, and so you price accordingly,” he noted, adding that such expectations have contributed to persistent inflation.

Dr. Asiama said the central bank is working to reset these dynamics and restore confidence in the economy.

“You have to be able to win the confidence of the people, and then you get them to act accordingly,” he explained.

He expressed optimism that sustained stability would naturally encourage greater use of the local currency.

“If we are able to sustain these gains for another year, I’m quite sure that people don’t have to be compelled to price in the cedi. They themselves will see the need to operate in the cedi,” he added.

Dr. Asiama reiterated that rebuilding trust in the cedi remains central to Ghana’s broader economic stabilization efforts.