Ghana IntelBrief
Back to Latest Briefings
Policy rate cuts won’t spur growth without cheaper bank loans – Economist
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 source

Related Articles

QNET, Manchester City Host Grassroots Football Clinic in Ghana

May 25, 2026

QNET, Manchester City Host Grassroots Football Clinic in Ghana
  • QNET and Manchester City expanded their global partnership by hosting the “ManCity-QNET Football Clinic 2026” in Accra, Ghana.
  • The five-day grassroots programme, held from May 20-24, trained 25 selected boys and girls aged 8-11.
  • Participants received elite coaching based on Manchester City academy methods, focusing on football development, leadership, and confidence.
  • The initiative was described as a Corporate Social Responsibility (CSR) effort aimed at empowering young talents, not a scouting exercise.
  • Organisers plan to make the football clinic a regular event in Ghana and across Sub-Saharan Africa.
Read full briefing

Ghana’s Jada Yankey clocks new personal best at AP Race London International

May 24, 2026

Ghana’s Jada Yankey clocks new personal best at AP Race London International
  • Ghanaian swimmer Jada Yankey achieved a new personal best in the women’s 50m butterfly at the AP Race London International 2026.
  • She clocked 30.74 seconds, finishing second in her heat at the competition held from May 23 to 25.
  • The event took place at the London Aquatics Centre, a recognized international swimming competition licensed by World Aquatics.
  • Yankey, who is set to turn 14, is considered one of Ghana’s most promising young swimming talents.
  • She previously recorded several personal bests at the 2026 Africa Aquatics Championships in Oran, Algeria.
Read full briefing

Keta MP offers relief to Afiadenyigba SHS after fire outbreak

May 24, 2026

Keta MP offers relief to Afiadenyigba SHS after fire outbreak
  • MP for Keta, Kwame Dzudzorli Gakpey, donated essential supplies to Anlo Afiadenyigba Senior High School.
  • The donation followed a fire that gutted the boys' dormitory on May 19th.
  • The relief package included mattresses and bedsheets, aimed at providing immediate support to affected students.
  • The fire was brought under control by the Anloga Fire Station, preventing further spread.
  • The Ghana National Fire Service (GNFS) urged all schools nationwide to strictly observe fire safety measures.
Read full briefing