No Celebration Yet: High Borrowing Costs Still Choking Businesses

C-NERGY Ghana, an advisory and investment banking firm has warned that the persistently high cost of borrowing risks stifling enterprise growth and job creation, despite the Finance Ministry’s optimism over Ghana’s recent macroeconomic gains.

In its review of the 2025 Mid-Year Budget, the firm said the 3.3 percentage point drop in average bank lending rates, from 30.3% to 27% offerred little relief for businesses and consumers alike. “If government expects the private sector to drive enterprise growth and create decent, well-paying jobs under the 24-hour Economy initiative, then lending rates must drop much further,” C-NERGY noted.

For many small and medium-sized enterprises (SMEs), access to credit remains out of reach, with expensive loans stalling expansion plans and threatening cash flows. Ordinary Ghanaians, too, continue to feel the pinch, as high borrowing costs translate into steeper prices for goods, services, and housing.

C-NERGY also questioned the sustainability of the cedi’s strong performance in the first half of the year, warning that its 42.6% appreciation against the dollar may be largely the result of interventions by the Bank of Ghana. “Should these interventions be scaled back, as recommended by the IMF, we could see a reversal of these gains, especially with global price shocks and ongoing trade tensions,” the report cautioned.

However, C-NERGY acknowledged that improved reserves, now at 4.6 months of import cover, buoyed by the new GOLDBOD arrangement, remain a critical buffer. The think tank urged policymakers to tackle structural bottlenecks in lending and capital markets to lower financing costs and give businesses the breathing space needed to invest, hire, and expand.