Despite a substantial reduction in the policy rate over the past year, Ghana is currently ranked as the leading nation in Africa with the highest lending rate, as reported in the African Development Bank’s (AfDB) 2026 African Economic Outlook.
Ghana’s policy rate of 14.0% is positioned as the highest among 44 countries on the continent. It is closely followed by the Democratic Republic of Congo and Egypt, occupying the second and third positions, respectively.
The AfDB report highlights that “Monetary policy stances in 2025 were influenced by the inflation dynamics across the continent. The easing of inflationary pressures facilitated interest rate reductions by African central banks. In 2025 alone, policy rates were decreased by an average of 0.98 percentage points. Including the first quarter of 2026, the average policy rate reduction amounts to 1.33 percentage points.”
The report further notes, “Encouraged by a rapid decline in inflation, four countries—Sierra Leone, Egypt, the Democratic Republic of Congo, and Ghana—reduced policy rates by eight percentage points or more.”
Despite a significant decline in the policy rate, approximately 14 percentage points between January 2025 and May 2026, the average lending rate in Ghana remains elevated. As per the May 2026 Summary of Economic and Financial Data by the Bank of Ghana, the average lending rate was 16.33% in April 2026. It was recorded at 20.58% in January 2026, subsequently decreasing to 19.17% in February 2026 and to 17.74% in March 2026.
Similarly, the Ghana Reference Rate has experienced a notable decline, reaching 10.06% in April 2026, from 15.68% in January 2026.
Between January 2025 and May 2026, the Bank of Ghana adjusted the Monetary Policy Rate (MPR) from an initial high of 28.0% in early 2025 to 14.0% by May 2026, reflecting consistent disinflation and enhanced macroeconomic stability.
However, in May 2026, the Bank of Ghana maintained the policy rate at 14.0%, citing potential risks to inflation and growth. The Monetary Policy Committee indicated that it would continue to monitor incoming data, particularly concerning potential spillover effects of geopolitical tensions on the domestic economy, and would take appropriate policy actions as necessary.
Additionally, the Committee decided to amend the dynamic Cash Reserve Ratio to a uniform ratio of 20 percent, maintained in the domestic currency, effective June 4, 2026.
Source: myjoyonline
Tags: AfDB, BoG, Ghana, Lending rate, Policy rate
