Ghana’s Economic Stability Under Stress as Stakeholders Demand Lower Lending Rates and Relief from Rising Production Costs
Ghana’s macroeconomic landscape in mid-2026 shows signs of significant recovery, yet businesses and economic experts are warning that these gains must translate into tangible benefits for households and the industrial sector. Speaking at Channel One TV’s Quarterly Economic Outlook, Prof. Agyapomaa Gyeke-Dako of the University of Ghana Business School noted that while headline inflation has dropped to 5.3% and the cedi remains relatively stable, a shift from 'macro-correction to micro-distribution' is essential. She emphasized that the current recovery remains fragile, requiring deliberate policies to ensure that improved indicators lead to inclusive growth, higher productivity, and sustainable employment across the country. Despite the positive trajectory, the Association of Ghana Industries (AGI) and the Ghana Union of Traders’ Association (GUTA) have raised alarms over persistent hurdles in the business environment. AGI CEO Seth Twum-Akwaboah highlighted that a massive 48% increase in electricity tariffs for bulk industrial consumers is severely undermining the competitiveness of local manufacturers. Furthermore, while average lending rates have decreased from approximately 31% to 16%, industry leaders argue these figures are still too high for meaningful expansion. Clement Boateng, President of GUTA, noted that although banks are more willing to lend, the high cost of credit remains a primary barrier to investment, especially when coupled with rising operational costs such as port charges and water tariffs. Addressing the financing gap, Andrews Akoto, Head of Trading at Absa Bank Ghana, suggested that traditional bank loans alone are insufficient for large-scale industrial expansion. He encouraged firms to tap into capital markets for 'patient capital' and long-term financing, which are better suited for establishing factories and large-scale projects. While declining interest rates have encouraged more lending to small and medium-sized enterprises (SMEs), Akoto stressed that financial institutions must also provide capacity-building support to help these businesses transition into larger entities capable of listing on the Ghana Stock Exchange’s alternative market. Looking ahead, the economic outlook faces significant external headwinds that could derail domestic progress. Michael Kottoh, Managing Partner of Konfidants, identified four critical global risks: geopolitical tensions in the Middle East driving up freight and energy costs, uncertainty in global trade due to shifting tariff policies, persistent inflation in major economies, and the volatility associated with the US AI investment boom. As the government promotes initiatives like the 24-hour economy, stakeholders maintain that success will depend on the state's ability to facilitate affordable, long-term credit and stabilize production costs against these global and domestic pressures.
