Bank of Ghana Governor Targets 10% Lending Rate by 2028 as Credit Costs Begin Falling

In a bold declaration that could reshape Ghana's financial landscape, the country's central bank chief has set his sights on cutting lending rates in half within his tenure—and early signs suggest the journey has already begun.

Dr. Johnson Asiama, Governor of the Bank of Ghana, has reaffirmed his ambitious goal to bring lending rates down to no more than 10 percent by the end of his four-year term, signaling a major policy shift aimed at making credit affordable for Ghanaian businesses and households. Speaking during a courtesy visit by the Asantehene, Otumfuo Osei Tutu II, to the central bank on Wednesday, January 7, Dr. Asiama outlined a careful balancing act between protecting recent progress on inflation while supporting economic recovery through cheaper borrowing costs.

For a nation where high interest rates have long stifled business growth and made loans prohibitively expensive for ordinary citizens, the governor's target represents more than just numbers—it's about fundamentally changing how accessible credit is in Ghana's economy.

Dr. Asiama's declaration isn't just wishful thinking—data from the Bank of Ghana shows the journey toward lower rates has already started gaining momentum. Recent figures from the central bank's Monetary Policy Report reveal that credit conditions have begun softening across the financial system.

Average lending rates have dropped from 26.6 percent to 24.2 percent, marking a noticeable decline that borrowers are beginning to feel. While still far from the 10 percent target, the trajectory shows movement in the right direction.

Money market yields tell a similar story. The 91-day Treasury bill rate, a key benchmark in Ghana's financial markets, fell from 13.4 percent in July to 10.3 percent by August 2025. This sharp decline in government borrowing costs typically translates into easier credit conditions across the broader economy as banks and other lenders adjust their rates.

Dr. Asiama was careful to emphasize that achieving lower lending rates cannot come at the expense of monetary discipline. The central bank has worked hard in recent years to bring down inflation, and those gains must be protected even as policymakers pursue easier credit conditions.

"I have said on many occasions that my prayer and wish is that by the end of my four-year tenure, lending rates will not be more than 10 percent," the governor stated, adding that easing market conditions must happen without undermining the progress made on price stability.

This balance represents one of the trickiest challenges in monetary policy. Lower interest rates can stimulate economic activity by making borrowing cheaper, but if rates fall too quickly or too far, they can reignite inflation by flooding the economy with cheap money. Getting the timing and pace right requires careful judgment and constant monitoring of economic indicators.

Adding to the positive news, Dr. Asiama disclosed that Ghana's financial buffers have strengthened significantly. The country's gross international reserves have climbed above $13.8 billion, representing the highest level ever recorded in Ghana's history.

These reserves—essentially the country's savings in foreign currency—serve as a critical cushion against external shocks and provide confidence to investors and trading partners. The record level suggests that Ghana's external position has improved markedly, giving the central bank more room to maneuver on monetary policy without worrying about currency instability or balance of payments crises.

Strong reserves also signal that Ghana can meet its international obligations, import essential goods, and defend the cedi if necessary—all factors that contribute to overall economic stability and investor confidence.

If Dr. Asiama achieves his target, the impact on Ghana's economy could be transformative. Currently, high interest rates make it difficult for businesses to borrow for expansion, equipment purchases, or working capital. Small and medium-sized enterprises (SMEs), which form the backbone of Ghana's private sector, often find credit costs prohibitive.

Lending rates at 10 percent would put Ghana more in line with emerging markets that have achieved monetary stability. Businesses could borrow more affordably to grow operations and create jobs. Individuals could access mortgages, car loans, and personal credit at reasonable costs. The housing market, currently constrained by expensive mortgages, could see new life.

For entrepreneurs and innovators, cheaper credit would lower the barriers to starting and scaling businesses. For farmers needing seasonal financing, lower rates could make the difference between planting more acreage or staying small. For manufacturers looking to upgrade equipment, affordable loans could boost productivity and competitiveness.

Dr. Asiama assured that the Bank of Ghana would continue working closely with the Ministry of Finance and other stakeholders to maintain monetary stability while expanding access to affordable credit. This coordination between fiscal and monetary authorities will be crucial—government borrowing patterns, budget discipline, and debt management all affect interest rates and inflation.

The governor's target of 10 percent by the end of his tenure gives the central bank roughly two to three more years to close the gap from the current 24.2 percent average. That's a significant journey requiring sustained discipline, favorable economic conditions, and perhaps some luck with external factors like global commodity prices and exchange rate stability.

But with progress already visible, record reserves providing a cushion, and clear policy direction from the top, Ghana's financial sector may be witnessing the beginning of a new era—one where credit becomes a tool for growth rather than a luxury few can afford. Whether Dr. Asiama's prayer becomes reality will depend on execution, but at least the vision is clear and the journey has begun.