Credit to Ghana’s private sector has surged sharply, signalling renewed momentum in economic activity as lower borrowing costs and improving business confidence drive demand for financing.
The Bank of Ghana (BoG) disclosed that private sector credit expanded by 41.2 percent year-on-year in June 2026, a significant increase from the 8.6 percent growth recorded during the same period last year.
In real terms, after adjusting for inflation, private sector credit growth stood at 34.1 percent, underscoring the strong recovery in lending to businesses and households.
The development comes at a time when interest rates across the financial sector have continued to decline, easing financing conditions for firms seeking capital to expand operations.
Announcing the outcome of the 131st Monetary Policy Committee (MPC) meeting, Governor Dr. Johnson Asiama said the strong growth in credit reflected an improving credit environment and stronger demand within the economy.
The MPC noted that sustained economic expansion, positive business sentiment and lower lending rates are expected to support further credit growth in the coming months.
Falling rates drive borrowing
Data presented by the central bank showed a broad moderation in interest rates across the financial market.
The average lending rate in the banking sector declined to 15.6 percent in June 2026, from 27 percent a year earlier.
Similarly, the Ghana Reference Rate fell to 10 percent, compared with 23.8 percent in June 2025, while yields on short-term government securities also eased significantly.
The benchmark 91-day Treasury bill rate dropped to 5.3 percent from 14.7 percent over the same period.
According to the central bank, the decline in borrowing costs has improved access to credit and encouraged businesses to seek financing for investment and expansion.
The growth in private sector credit comes amid concerns that banks have increasingly preferred investing in government securities instead of lending to businesses.
Responding to questions during the MPC press briefing, Dr. Asiama acknowledged that banks still hold significant investments in government instruments but indicated that the trend is expected to gradually reverse.
He explained that declining yields on government securities would make lending to businesses more attractive over time.
“Private sector credit is actually going up compared to last year. It’s going up quite rapidly,” the Governor stated.
“Banks are still investing in government securities, but we believe that as rates continue to fall, we will see greater recourse to private sector lending by the banks.”
The sharp rise in lending coincided with stronger economic performance during the first half of the year.
Ghana’s economy grew by 6.4 percent in the first quarter of 2026, supported mainly by the services and industrial sectors.
The Bank’s Composite Index of Economic Activity (CIEA), which tracks high-frequency economic indicators, also recorded annual growth of 13.4 percent in May 2026, compared to 4.4 percent during the same period last year.
Credit growth, international trade, industrial production and tourism activity were among the major contributors to the improved economic outlook.
Business and consumer confidence surveys conducted in June further pointed to optimism about growth prospects, subdued inflation and improving financing conditions.
The central bank says additional measures are being introduced to encourage credit growth and deepen financial intermediation.
Dr. Asiama disclosed that the Bank of Ghana is working with financial institutions to strengthen risk management systems and expand digital lending channels.
He indicated that authorities expect these measures to support higher levels of credit to productive sectors of the economy.
“We are working with banks to strengthen their risk management frameworks. Several other measures we are introducing should see private sector credit at higher levels,” he said.
