When the Bank of Ghana (BoG) reduced its Monetary Policy Rate (MPR) by 150 basis points to 14 percent on March 18, the announcement masked a sharper internal divide than the headline figure suggested. The official decision document from the 129th Monetary Policy Committee (MPC) meeting reveals that three members pushed for the full cut, one voted for a smaller reduction, and one wanted rates held entirely.
The majority bloc, comprising three of the five members, voted for the 150 basis point reduction, bringing the rate down from 15.5 percent. Their primary argument centred on the real policy rate. With headline inflation at 3.3 percent in February 2026, the real policy rate stood at a staggering 12.2 percent, a level they argued was actively suppressing credit, investment, and output recovery. Gross international reserves stood at approximately US$14.5 billion, equivalent to 5.8 months of import cover, while Ghana’s primary fiscal balance recorded a surplus of 2.6 percent of GDP at end-2025, buffers the majority cited as proof the economy could absorb the cut without risk.
One member in the majority forecast that inflation would return to the target band in the second half of 2026, while another projected it could arrive as early as the second quarter.
A fourth member broke from the majority, voting for a more modest 75 basis point reduction to 14.75 percent. That member acknowledged the domestic case for easing but raised pointed concerns about the ongoing US-Israel-Iran war, which has disrupted critical trade routes including the Strait of Hormuz. The member flagged a warning signal in non-food inflation, which edged up to 4.0 percent in February, suggesting underlying price pressures may be stickier than the headline rate implies, and warned that a prolonged war could trigger severe inflationary consequences for Ghana.
The fifth member voted to hold the rate at 15.5 percent entirely. That member argued that the 129th meeting was held amid heightened global economic uncertainty following the start of the US-Israel-Iran war, with oil prices hovering around US$100 per barrel and disruptions to both the Strait of Hormuz and Suez Canal threatening global supply chains. As a net oil importer, Ghana remained exposed to any sustained shock, and the member said it was premature to cut while the dollar was appreciating and supply chains remained blocked. The lone dissenter offered a conditional signal however, indicating willingness to support a bold cut at the May meeting if the conflict resolves and oil prices retreat.
Ghana’s real GDP grew 6.0 percent in 2025, up from 5.8 percent in 2024, with the Bank of Ghana’s Composite Index of Economic Activity recording annual growth of 8.4 percent in January 2026, compared with 6 percent a year earlier.
The next MPC meeting is scheduled for May 18 to 20, 2026, where policymakers will assess whether the majority’s easing bet holds or whether the external risks the dissenters warned of have begun to materialise.
