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

Ghana has witnessed a significant drop in borrowing costs as inflation has eased sharply, according to the World Bank. The average lending rates plummeted by over 11 percentage points within a year, falling from 27% in June 2025 to 15.6% by June 2026. The central bank's policy rate followed a similar trend, reducing from 28% in April 2025 to 14% by March 2026, marking a substantial 1,400 basis-point cut.

The World Bank hailed Ghana's 2025 disinflation as particularly remarkable, noting that headline inflation plummeted from 23.2% in February to 5.4% in December, the lowest since 1999. This improvement was attributed to tight monetary policy, a 28.9% appreciation of the cedi, and lower food prices. While the gains extended to financial conditions, becoming more favorable for households and businesses, the World Bank cautioned that Ghana's price stability remains vulnerable to external factors and supply-side pressures.

Inflation fell to 3.2% in March 2026 but rose to 5.3% by June, partly due to higher food and energy import costs, climate-related disruptions, and Middle East conflicts that boosted fuel prices, impacting transport operators, manufacturers, and agro-processors. The government countered with a temporary fuel price relief measure to support consumers and businesses, but the World Bank stressed the need to safeguard the gains made during the country's rapid disinflation.