The industrial landscape in Ghana is witnessing a significant shift in sentiment as the cost of credit begins to align with the private sector’s growth requirements.
Mr. Seth Twum-Akwaboah, Chief Executive Officer (CEO) of the Association of Ghana Industries (AGI) has noted that business confidence is on a definitive upward trajectory, fueled by a substantial reduction in commercial lending rates.
Speaking in a recent interview, Mr. Twum-Akwaboah explained that the transition from the high-interest environment of 2024 to the current fiscal reality of 2026 represents a pivotal moment for local manufacturers and service providers who have long cited the cost of capital as their primary barrier to expansion.
“The figures tell us that the confidence level has gone up. The implication is that businesses are feeling more comfortable to invest. One area that is key is the lending rate. Most businesses rely on borrowing, so if the rate is at a level where I can access capital to run my business, it makes life more comfortable”
Mr. Seth Twum-Akwaboah, AGI CEO
The data analysed by the AGI boss revealed a dramatic correction in the credit market. Lending rates, which peaked at approximately 30 percent in 2024, have now retreated to roughly 17 percent.
He noted that this 13-point drop is not merely a statistical victory; it is a functional relief for firms that rely on external financing to manage daily operations and capital expenditure.
The reduction directly translates into a lower cost of doing business, which in turn allows Ghanaian firms to price their products more competitively against regional imports.
For the majority of Ghanaian industries, the lending rate is the most critical indicator of operational survival. In an economy where liquidity is often tight, the ability to access capital at 17 percent rather than 30 percent changes the entire feasibility of industrial scaling.
The AGI CEO pointed out that when the cost of borrowing drops, the immediate pressure on cash flow eases, allowing business owners to pivot from survival mode to strategic investment.
This surge in confidence is expected to manifest in increased inventory orders, factory upgrades, and workforce expansion. However, the AGI was quick to link this monetary relief to market competitiveness. If local producers can maintain lower operational costs, they can pass those savings on to the Ghanaian consumer.
This creates a virtuous cycle where local goods become more attractive than imported alternatives, fostering a stronger domestic market and reducing the nation’s reliance on foreign currency for basic consumption.
Post IMF Transition
While the current stability is welcomed, the AGI boss issued a stern warning regarding the upcoming conclusion of the International Monetary Fund (IMF) programme.
In the next few months, Ghana is expected to exit the fund’s formal oversight, a move that Mr. Twum-Akwaboah views with a mixture of optimism and extreme caution.
The concern is that the fiscal discipline enforced by the IMF might slacken once the “watchdog” leaves the room, leading to a return of the macroeconomic volatility that previously crippled the industrial sector.
The AGI CEO called on the government to demonstrate that it can maintain prudent management independently. The current investor confidence is built on the assumption of continued stability; any signal of a return to high deficit spending or currency instability could trigger a rapid reversal of the gains made over the last two years.
The transition period was described as a moment to tread cautiously, ensuring that the reforms absorbed at a high social and economic cost are not discarded for short-term political or fiscal gains. For the AGI, the strategic roadmap for the post-IMF era is centered on import substitution.
Mr. Twum-Akwaboah argued that Ghana’s persistent exposure to global economic shocks is a direct consequence of its high import bill. Thus deliberately shifting toward local production can build a buffer against international market fluctuations for the country.
The logic is that the less Ghana depends on the “mercy of the international market,” the more resilient its domestic economy becomes. Yet this shift requires more than just rhetoric; it requires a structural overhaul of how local production is incentivized.
The AGI suggested that the costs absorbed during the recent reform period must now yield tangible results in the form of increased factory output, as strengthening local supply chains will reduce the pressure on Ghana’s foreign exchange reserves, effectively “insulating” the economy from the slightest global shocks that cause rapid inflation and currency depreciation.
Development Finance Portfolio
A critical component of the AGI’s demand was a thorough review of state-linked financial institutions, including the EXIM Bank, Development Bank Ghana (DBG), and the National Investment Bank (NIB).
Mr. Twum-Akwaboah challenged these entities to ensure their lending portfolios are truly aligned with the “productive sector,” given that there is a perceived gap between the mandates of these banks and the actual availability of medium-to-long-term funding for industries.
The AGI CEO also pushed for a downward adjustment of interest rates at these development banks to reflect the new market reality. He argued that if commercial rates have fallen to 17 percent, development finance – which is intended to be subsidized and supportive – must drop even further.
Specifically, he suggested that if these banks were lending at 12 percent when commercial rates were at 30 percent, they should now be targeting rates as low as 6 percent. This would maintain the necessary spread that makes development finance a viable tool for industrial transformation.
As Ghana prepares for its post-IMF future, the Association of Ghana Industries is making it clear that the private sector’s support is contingent on continued fiscal discipline and lower interest rates.
The drop in lending rates to 17 percent has unlocked a wave of optimism, but that confidence is contingent on the government’s ability to manage the economy without an external safety net. The focus must now move to sustaining these gains through aggressive import substitution and a re-tooling of the national financial architecture.
If the state-linked banks can deliver the 6 percent long-term funding the AGI is demanding, and if the government maintains its current prudent stance, Ghana’s industrial sector may finally have the environment it needs to drive the country toward true economic self-reliance.
The next few months will be the ultimate test of whether this rising confidence is a temporary spike or the beginning of a permanent industrial.
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