Introduction to Interest Rates and Economic Growth
The Asantehene, Otumfuo Osei Tutu II, has urged the Bank of Ghana (BoG) to lower interest rates, stating that Ghana’s economic recovery will remain fragile without affordable credit to drive domestic private sector investment. Speaking during a courtesy visit to the Bank of Ghana’s headquarters, Otumfuo underscored the significant impact of the central bank’s policies on the daily lives of Ghanaians.
The Impact of High Interest Rates
Decisions taken by the BoG ultimately influence livelihoods, access to food, housing, education, and healthcare. Describing the BoG as a pivotal institution in the country’s economic architecture, the Asantehene challenged its leadership to chart a clear path away from the current high interest rate regime toward a more supportive environment for business growth and wealth creation. He emphasized that recent gains in macroeconomic stability, including emerging signs of currency stabilization, should not lead to complacency.
The Need for Lower Interest Rates
The Asantehene warned that sustaining recovery would require deliberate and consistent policies aimed at lowering the cost of borrowing for businesses and households. He stated that no amount of investment by the government can give Ghana a sound economy, and that a private push is needed to stimulate domestic industry. The traditional ruler framed his appeal as a national economic imperative, dismissing the notion that government spending or significant foreign investment could alone solve Ghana’s developmental needs.
The Role of the Bank of Ghana
Governor Dr. Johnson Asiama responded by reiterating his ambition to reduce Ghana’s lending rate to no more than 10 percent by the end of his four-year tenure, underscoring a policy focus on making credit more affordable. The central bank has cut its benchmark monetary policy rate three times in 2025, most recently by 350 basis points to 18 percent in November, citing improved macroeconomic outlook and continued inflation decline.
Collaboration and Independence
During the visit, BoG officials briefed the Asantehene on ongoing efforts to stabilize the financial system and maintain price stability while emphasizing support for sustainable economic growth. Otumfuo Osei Tutu II called for closer collaboration between the central bank, government, and private sector to ensure that monetary gains translate into real benefits for businesses and households across the country. He also called for political support to enable the BoG to carry out its mandate independently and professionally, free from political interference.
Conclusion
The Asantehene’s comments add to growing calls from business leaders and economic stakeholders for a more accommodative monetary stance as inflation continues to moderate. Ghana’s inflation rate fell to 5.4 percent in December 2025 from 23.8 percent a year earlier, marking the 12th consecutive month of disinflation. The visit underscores the relevance of traditional authority in national economic conversations, and the need for continued collaboration and dialogue between stakeholders to promote economic growth and stability.
