Back to Latest Briefings
May 20, 2026
AI-Enhanced
Policy rate cuts won’t spur growth without cheaper bank loans – Economist
Money
Policy
Growth
Key Points
- Economist Dr. Sajid Chaudhry argues that Bank of Ghana policy rate cuts will have limited impact on economic growth unless commercial banks also reduce lending rates.
- He noted commercial banks are slow to transmit rate cuts due to non-performing loans, exchange-rate instability, and macroeconomic uncertainty, maintaining wide net interest margins.
- Dr. Chaudhry's analysis from 2002-2024 shows a direct correlation between lower lending rates and higher GDP growth, while high interest rates weaken economic performance.
- He recommends the Central Bank adopt regulatory measures to encourage faster transmission of policy rate cuts to borrowers and improve deposit rates when monetary policy tightens.
- He also urged commercial banks to strengthen loan screening, businesses to improve productivity and repay loans, and the government to maintain macroeconomic stability.
Why This Matters
This analysis is crucial for Ghana as it identifies a key impediment to economic growth: the slow transmission of monetary policy. If commercial banks do not lower lending rates despite policy rate cuts, the private sector's access to affordable credit remains constrained, undermining efforts to stimulate economic activity and achieve broader development goals. Addressing this bottleneck is vital for the effectiveness of the Bank of Ghana's monetary policy and for fostering a more robust business environment.
Read Full Article
View original sourceRelated Articles
July 8, 2026
Abu Trica rushed to Police Hospital as lawyer raises concerns over access to client
- Frederick Kumi (Abu Trica) has been rushed to the Police Hospital, according to his lawyer, Oliver Barker-Vormawor.
- His legal team has been denied access to him for over a week, and they are unaware of his current detention location, with Interpol denying custody.
- Barker-Vormawor plans to file a habeas corpus application if authorities continue to deny Abu Trica his right to legal representation.
- The lawyer criticized the treatment of Ghanaian citizens in cases involving foreign law enforcement agencies, likening it to treating them as 'animals'.
- Abu Trica faces extradition to the United States over an alleged $8 million romance scam and wire fraud scheme.
July 8, 2026
GRA gives Electrochem seven days to settle GH¢6.8m tax debt or face sanctions
- The Ghana Revenue Authority (GRA) has issued a seven-day ultimatum to Electrochem Ghana Limited to settle an outstanding tax liability of GH¢6.8 million.
- As an enforcement measure, GRA officers sealed off the company's administration block at Ada on July 8.
- The tax arrears date back to 2021, initially totaling GH¢8.8 million with interest, though a GH¢200,000 payment was made by the company.
- The GRA chose not to fully shut down operations to allow the company to continue working and raise funds for the remaining balance.
- This action is part of the GRA's intensified enforcement drive to improve revenue mobilization and meet its annual collection targets.
July 8, 2026
Akandoh mourns Sefwi Sayerano shooting victims, calls for justice
- Health Minister and Juaboso MP, Kwabena Mintah Akandoh, expressed condolences for a fatal shooting incident in Sefwi Sayerano.
- The incident, which occurred during a police attempt to arrest a suspected drug peddler, resulted in three deaths and two injuries.
- A confrontation between police officers from the Sefwi Wiawso Divisional Police Command and residents led to the shootings.
- Mr. Akandoh called for justice and adherence to legal processes, urging that the law take its course.
- He also criticized minority MPs for allegedly politicizing the tragic event.