Despite Recent Cuts, Ghana’s Policy Rate Still 3rd Highest in Sub-Saharan Africa

Although the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has consistently cut the country’s policy rate, the cut is still not enough to make Ghana competitive in Sub-Saharan Africa.

The latest World Bank October 2025 Africa Pulse report reveals that Ghana still ranks as the country with the third-highest policy rate in Sub-Saharan Africa.

The report revealed that Ghana trails only Nigeria (27%) and Malawi (26%) in the region, with its current benchmark rate standing at 21.5% following a cumulative 7.5 percentage point reduction since January 2025.

The latest cut of 350-basis-point slash in September brought the rate to its lowest level since October 2022, signaling the central bank’s growing confidence in the country’s disinflation progress.

The BoG’s Monetary Policy Committee (MPC) says the decision was anchored on sustained single-digit inflation, robust economic growth, and stronger external buffers, marking a notable shift from the contractionary stance adopted during the 2022–2023 inflationary crisis.

Despite the significant cuts, the World Bank’s ranking underscores that Ghana’s monetary environment remains relatively tight compared to its regional peers. Countries such as Kenya, Mozambique, Lesotho, and South Africa have already embarked on easing cycles, while others like Angola, Rwanda, and Uganda have held rates steady for months.

 In contrast, Ghana’s rate, admittedly declining, continues to hover above regional averages, keeping borrowing costs high for businesses.

While the Bank of Ghana’s rate cuts are commendable, further reductions may be necessary to enhance Ghana’s cost of capital and business competitiveness, particularly under the African Continental Free Trade Area (AfCFTA).

The current lending environment, shaped by one of the highest policy rates in the region, limits local firms’ ability to scale and compete across borders.

The World Bank’s report also cautioned that global economic uncertainty, volatile commodity prices, and regional political instability could disrupt the region’s monetary normalization process. However, it emphasized that countries with well-anchored inflation expectations, like Ghana, have room to continue easing cautiously.

Although Ghana has made strides in taming inflation and restoring macroeconomic stability, more decisive policy easing may be required to unleash the country’s full industrial and trade potential under AfCFTA.

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