By Franklin ASARE-DONKOH
Ghana has emerged as Africa’s most aggressive monetary easing economy, following an unprecedented series of policy rate cuts by its central bank.
According to the latest analysis by the African Development Bank (AfDB) in its 2026 African Economic Outlook, the West African nation outpaced all regional peers in slashing borrowing costs.
This aggressive pivot marks a dramatic turnaround from the severe debt distress that plagued the country just a few years ago.
The Bank of Ghana (BoG) engineered a staggering 1,400-basis-point reduction in its benchmark monetary policy rate.
The rate was halved from a peak of 28.0% in January 2025 to 14.0% by March 2026.
This historic unwinding of tight monetary policy was catalysed by a rapid slowdown in inflation. Headline inflation declined from a high of 54.0% in early 2023 to 3.4% by April 2026.
Led by Governor Dr Johnson Asiama, Ghana’s central bank capitalised on this disinflationary momentum, a strongly recovering cedi, and robust fiscal consolidation undertaken by the government.
The executive branch’s strict spending controls, including reducing the number of government ministries and abolishing some unpopular taxes, significantly helped the BoG tame price volatility.
According to BoG data, Ghana’s aggressive monetary relaxation has been supported by strong macroeconomic fundamentals, including robust growth, rising trade surpluses and substantial foreign exchange reserves.
Available data show that real Gross Domestic Product (GDP) growth accelerated to 6.0% in 2025, with the AfDB projecting a strong 5.0% growth rate through the end of 2026.
Driven by strong global gold prices and cocoa exports, Ghana’s current account surplus reached $9.4 billion in 2025.
Gross international reserves increased to $14.5 billion, representing a healthy 5.8 months of import cover.
This improved economic position enabled Ghana to conclude its International Monetary Fund (IMF) Extended Credit Facility programme ahead of schedule.
The country has since transitioned to a non-financing policy coordination framework, ending its reliance on fresh IMF lending.
Despite the AfDB highlighting Ghana’s aggressive policy cuts, the domestic business community continues to face a major challenge in the form of high commercial lending rates.
While the central bank reduced its policy rate to 14.0%, data show that average commercial lending rates stood at 16.33% in April 2026.
Although this represented a decline from the 20.58% recorded in January, retail banks have been slow to pass on the full benefits to businesses, leaving many enterprises struggling to access affordable credit.
The aggressive easing cycle has, however, reached a temporary pause.
At its latest Monetary Policy Committee meeting, the BoG maintained the benchmark policy rate at 14.0%.
The central bank cited a slight rise in domestic inflation to 3.4%, alongside escalating geopolitical tensions in the Middle East.
The BoG noted that disruptions to global shipping and volatility in energy markets require heightened vigilance to safeguard Ghana’s hard-won macroeconomic stability.
