High Lending Rates in Ghana Despite Inflation Drop: Deloitte 2026 Budget Analysis

Introduction

In Ghana’s evolving economic landscape, one persistent challenge stands out: high lending rates in Ghana hovering around 24%, even as inflation experiences a vital drop. Deloitte Ghana’s latest analysis of the 2026 budget highlights this anomaly, noting that these average lending charges in Ghana remain the highest in the sub-region despite improved macroeconomic stability. This report underscores how elevated borrowing costs continue to hinder the ease of doing business, affecting enterprises from small startups to large corporations.

Understanding this dynamic is crucial for investors, policymakers, and business owners. As Ghana advances toward its medium-term inflation target of 8%, structural bottlenecks prevent lending rates from aligning with these gains. This article breaks down Deloitte’s findings pedagogically, explaining key economic concepts like inflation, lending risk, and fiscal-monetary coordination to empower readers with actionable knowledge.

Analysis

Deloitte’s examination reveals a disconnect between Ghana’s macroeconomic progress and its lending environment. Despite a sustained decline in inflation over the past year—potentially dipping below the 8% benchmark—the average lending rates in Ghana have not followed suit. This persistence stems from unresolved structural issues that elevate lending risk for financial institutions.

Macroeconomic Improvements Driving Inflation Drop

Inflation in Ghana, measured by the Consumer Price Index (CPI), has benefited from robust performance of the Ghana cedi and reduced imported inflation pressures. Food and non-food inflation rates improved markedly in 2025, reflecting better currency stability and global commodity trends. Pedagogically, inflation represents the rate at which prices for goods and services rise, eroding purchasing power. A drop from double digits toward single digits signals enhanced economic management, typically lowering nominal interest rates as central banks ease policy.

Why Lending Rates Remain Elevated

However, banks price in risks beyond inflation, including default probabilities tied to structural weaknesses in agriculture, fiscal policy, and external vulnerabilities. At approximately 24%, Ghana’s rates top sub-regional peers, increasing the cost of doing business in Ghana. This analysis teaches that lending rates = base rate (often tied to policy rate) + risk premium. In Ghana, the risk premium dominates due to these bottlenecks.

Summary

Deloitte Ghana emphasizes that while inflation’s decline bolsters stability, high lending rates undermine business competitiveness. Structural reforms, accelerated agricultural programs, and policy coordination are essential to lower borrowing costs sustainably. Global risks like geopolitical tensions add caution, but with fiscal discipline and external buffers, cedi stability can persist into 2026.

Key Points

Practical Advice

For businesses and policymakers navigating high lending charges in Ghana, Deloitte offers targeted recommendations. Here’s how to apply them practically:

For Businesses

Diversify funding sources beyond traditional bank loans, such as equity financing or export credit agencies. Optimize cash flows by leveraging government incentives in the 2026 budget, like tax rebates for exporters. Pedagogically, calculate your effective borrowing cost: Nominal rate (24%) minus inflation (projected <8%) yields a real rate of ~16%, still burdensome—hedge with forward contracts on forex.

For Policymakers

Accelerate the Agriculture for Economic Transformation agenda to boost domestic food production, reducing import reliance. Implement contingency measures for commodity shocks, such as strategic reserves for oil and cocoa. Coordinate Bank of Ghana’s monetary policy with Ministry of Finance fiscal tools for holistic risk reduction.

Investment Strategies

Investors should monitor cedi inflows from multilaterals like IMF. Short-term: Focus on sectors with low import exposure, like local manufacturing. Long-term: Bet on reforms lowering rates to sub-regional averages (15-20%).

Points of Caution

While positives abound, Deloitte warns of external threats. Rising global risks from geopolitical tensions could spike commodity prices, reversing inflation gains. Specific vulnerabilities include:

• Gold, oil, and cocoa price volatility affecting exports and fiscal revenues.
• Investment realignments disrupting external financing.
• Need for external buffers (reserves) and targeted mitigations to shield domestic prices.

Businesses must stress-test operations against cedi depreciation scenarios, maintaining at least 3-6 months of forex reserves.

Comparison

Ghana’s average lending rates in Ghana at 24% contrast sharply with sub-regional neighbors. For context:

This table illustrates Ghana’s outlier status: higher rates despite better inflation control, highlighting structural drags versus peers’ diversified economies and stronger reserves.

Legal Implications

No direct legal implications arise from Deloitte’s economic analysis, as it focuses on policy recommendations rather than regulatory breaches. However, sustained high lending rates could indirectly influence contract law and debt recovery under Ghana’s Borrowers and Lenders Act, 2020 (Act 1052), which caps certain fees but not base rates. Businesses should ensure compliance with disclosure rules from Bank of Ghana directives to avoid penalties.

Conclusion

Deloitte’s 2026 budget review paints a balanced picture: Ghana’s inflation drop is a win, but high lending rates in Ghana demand urgent structural fixes. By addressing bottlenecks through coordinated policies and agricultural boosts, the nation can lower borrowing costs, enhancing business viability and attracting investment. Vigilance against global risks will sustain cedi stability, paving the way for resilient growth. Stakeholders must act decisively to translate macroeconomic gains into tangible opportunities.

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