Ghana’s borrowing costs plunge as inflation eases sharply – World Bank

Ghana has witnessed a remarkable turnaround in its borrowing costs, thanks to a sharp decline in inflation, according to the World Bank. The average lending rates have plummeted by an astonishing 11 percentage points over the past year, the report reveals. In its latest Economic Update, the World Bank highlighted that the cost of borrowing had dropped from 27% in June 2025 to a more manageable 15.6% by June 2026.

This significant reduction in interest rates followed a similar decline in the central bank's policy rate, which fell from 28% in April 2025 to 14% by March 2026.

The World Bank commended Ghana's 2025 disinflation as "particularly remarkable," noting that headline inflation plummeted from 23.2% in February to a record-low 5.4% in December. This drastic fall in inflation was attributed to a combination of tight monetary policy, a substantial appreciation of the Ghanaian cedi, and lower food prices. The report indicated that the gains in price stability extended beyond headline inflation, with financial conditions becoming more favorable for both households and businesses.

Despite these positive developments, the World Bank cautioned that Ghana's price stability remains vulnerable to external factors and supply-side pressures. Inflation experienced a resurgence, climbing from 3.2% in March 2026 to 5.3% by June. The renewed pressure was primarily driven by higher food and energy import costs, increased energy and fertilizer prices, and climate-related disruptions to production.

The conflict in the Middle East further exacerbated the situation by pushing up fuel prices, impacting transport operators, manufacturers, and agro-processors.

To mitigate the impact on consumers and businesses, the government introduced a temporary fuel price relief measure. However, the World Bank emphasized that the recent inflation rebound underscores the importance of safeguarding the gains achieved during Ghana's impressive disinflation episode.