Ghana ranks third among Sub-Saharan African countries with the highest policy rate, according to the World Bank’s October 2025 Africa Pulse report, despite aggressive monetary easing by the Bank of Ghana this year.
The ranking reveals a paradox at the heart of Ghana’s economic recovery. While the central bank has slashed rates by a cumulative 7.5 percentage points since January 2025, bringing the benchmark to 21.5 percent, that figure still trails only Nigeria’s 27 percent and Malawi’s 26 percent across the region.
The latest 350-basis-point cut in September brought Ghana’s rate to its lowest level since October 2022, signaling the Monetary Policy Committee’s growing confidence in the country’s disinflation progress. That confidence stems from sustained single-digit inflation, robust economic growth, and stronger external buffers, marking a notable reversal from the contractionary stance that defined the 2022 to 2023 inflationary crisis.
But here’s what makes Ghana’s position particularly striking. While the central bank celebrates historic rate cuts, businesses still operate in one of the region’s most expensive borrowing environments. That creates a competitive disadvantage that could undermine Ghana’s ambitions under the African Continental Free Trade Area.
Countries such as Kenya, Mozambique, Lesotho, and South Africa have already embarked on substantial easing cycles. Others, including Angola, Rwanda, and Uganda, have held rates steady for months at levels well below Ghana’s current benchmark. This means Ghanaian firms seeking to scale operations or compete across borders face higher capital costs than most of their regional counterparts.
The World Bank’s Africa Pulse report doesn’t just highlight Ghana’s ranking. It also underscores that the country’s monetary environment remains relatively tight compared to regional peers, even as policymakers tout progress toward normalization. For local manufacturers, importers, and service providers, these elevated rates translate directly into constrained expansion plans and reduced competitiveness.
What’s particularly interesting is the timing. Ghana’s cedi was the best-performing currency in Africa during the first eight months of 2025, with a year-to-date gain of 20 percent, buoyed by tight fiscal and monetary policy, rising export revenue, and improved market sentiment. That currency strength, partly enabled by elevated interest rates, has helped stabilize the macroeconomic environment. But it also illustrates the trade-offs inherent in Ghana’s recovery strategy.
The Bank of Ghana’s Monetary Policy Committee has anchored its recent easing on three pillars: inflation declining to 11.5 percent in August (the lowest in four years), strong economic activity with real GDP growth exceeding expectations, and improved external buffers including foreign exchange reserves. These fundamentals suggest room for additional cuts without jeopardizing stability.
Yet the World Bank’s report cautions that global economic uncertainty, volatile commodity prices, and regional political instability could disrupt Sub-Saharan Africa’s broader monetary normalization process. For Ghana, which emerged from a debt restructuring just months ago, these external risks demand careful policy calibration.
The competitive implications extend beyond simple borrowing costs. Under AfCFTA, where manufacturers in Accra compete directly with counterparts in Nairobi or Johannesburg, interest rate differentials matter. A Ghanaian producer paying 25 to 30 percent on working capital loans faces structural disadvantages against competitors accessing credit at 15 to 18 percent in neighboring markets.
Some economists argue that Ghana’s relatively high rates reflect lingering risk perceptions rather than current fundamentals. The country’s recent debt default, ongoing restructuring, and fiscal consolidation efforts have created what they describe as a “memory premium” in lending rates. Banks remain cautious despite improving macroeconomic indicators.
The World Bank revised Ghana’s 2025 economic growth forecast upward to 4.3 percent in its October report, suggesting the economy is responding positively to stabilization efforts. However, growth projections assume continued policy normalization, including further interest rate reductions that would gradually align Ghana’s monetary stance with regional peers.
The central bank faces a delicate balancing act. Cut too aggressively, and inflation expectations could become unanchored, reversing hard-won gains. Move too cautiously, and Ghana risks cementing its position as a high-cost economy that struggles to attract investment or compete in regional trade.
What’s clear from the World Bank’s ranking is that seven and a half percentage points of cuts, while historically significant, haven’t fundamentally altered Ghana’s relative position in Sub-Saharan Africa’s monetary landscape. The country entered 2025 with one of the region’s highest rates and remains there despite unprecedented easing.
For businesses watching these developments, the message is mixed. Rates are falling, which is positive for investment planning and expansion decisions. But they’re falling from such elevated levels that Ghana still ranks near the top of Africa’s most expensive borrowing markets. That reality shapes everything from project feasibility studies to decisions about where to locate manufacturing facilities.
The World Bank report emphasizes that countries with well-anchored inflation expectations, like Ghana, have room to continue easing cautiously. That suggests the Monetary Policy Committee could deliver additional cuts in coming months, particularly if inflation remains contained and external conditions stay favorable.
Whether Ghana can move from third to somewhere in the middle of Sub-Saharan Africa’s policy rate rankings depends partly on continued disinflation success. But it also requires addressing the structural factors, including risk perceptions and banking sector margins, that keep lending costs elevated even as the central bank’s benchmark falls.
For now, Ghana’s businesses operate in what economists call a “high but improving” interest rate environment. The challenge for policymakers is accelerating that improvement without compromising the stability that makes rate cuts possible in the first place.