The Importers and Exporters Association of Ghana is urging commercial banks nationwide to significantly reduce their lending rates following a notable decline in the Ghana Reference Rate to 10.02%.
The Executive Secretary of the Association, Mr Samson Asaki Awingobit, noted that the recent fall in the benchmark rate represents a strong opportunity for banks to make credit more affordable for businesses, especially small and medium-sized enterprises (SMEs) and industries that depend heavily on bank financing to expand operations, sustain production, and create employment.
Speaking to Citi Business News, Mr. Awingobit expressed concern that despite improvements in key macroeconomic indicators such as inflation, monetary stability, and the reference rate itself, many commercial banks continue to charge relatively high lending rates.
He noted that current lending rates in the banking sector still range between 18% and 24%, a level he believes is not consistent with the recent economic gains recorded in the country.
“We should be expecting lending rates to come down further from 19%, maybe at least to 15 or 14% in order to reflect the Ghana Reference Rate,” he stated.
The Ghana Reference Rate is a key benchmark used by banks in Ghana to price loans. It is intended to improve transparency in lending by providing a standardised base rate that reflects broader economic conditions, including inflation and policy trends set by the Bank of Ghana.
With the recent reduction from 14.58% in February to 10.02% in June, many stakeholders in the business community argue that borrowing costs should correspondingly decrease.
Mr. Awingobit emphasised that since commercial banks rely on indicators such as the reference rate and inflation to determine loan pricing, businesses should begin to benefit more directly from the improving economic environment.
In his view, lower lending rates would not only ease the financial burden on existing businesses but also encourage new investments, stimulate production, and support job creation across various sectors of the economy.
He further urged banks to ensure that the benefits of macroeconomic stability are passed on to the real sector of the economy. According to him, the private sector must be the ultimate beneficiary of economic progress, especially after sustained efforts by policymakers to stabilise inflation and improve monetary conditions.
“The private sector should be the ultimate beneficiary of the progress made in the economy,” he noted.
The Association also encouraged businesses seeking credit facilities to take a more proactive role in negotiating loan terms with financial institutions. Mr. Awingobit insisted that with the current downward trend in benchmark rates, banks can no longer justify maintaining high lending rates, especially when conditions in the broader economy have improved significantly compared to previous years.
He also addressed recent developments in inflation, noting that it had increased slightly from 3.4 percent in April to 3.7 percent in May.
However, he described the rise as modest and manageable, particularly when compared to the double-digit inflation levels Ghana experienced in earlier years.
In his assessment, the current inflation environment remains generally supportive of economic activity and investment.
“Inflation at 3.7% is still on a good note,” he said, while also calling for greater clarity on the factors contributing to the slight increase.
Beyond monetary policy concerns, Mr. Awingobit also expressed support for government efforts aimed at reducing Ghana’s import bill, particularly with regard to food imports such as rice.
He argued that strengthening domestic production capacity would help the country retain more resources within the local economy, create employment opportunities, and enhance long-term economic resilience.
He further appealed to the Governor of the Bank of Ghana and the central bank’s management to ensure that reductions in the Ghana Reference Rate are effectively transmitted through the banking system.
According to him, the impact of monetary policy reforms must be felt beyond the financial sector and reflected in the everyday cost of doing business.
“If the Bank of Ghana has worked hard to bring the reference rate to that point, then we should see a reflection in the commercial banks,” he added.
The Ghana Reference Rate remains a critical tool in the country’s financial system, designed to enhance fairness, transparency, and consistency in loan pricing.
With its recent decline, businesses across Ghana are now closely watching whether commercial banks will respond by adjusting lending rates downward in line with the improved macroeconomic environment.
