Business
BoG Opts for Steady Rates While Inflation Continues to Fall
The Monetary Policy Committee (MPC) of the Bank of Ghana is set to make a crucial decision on the country’s benchmark interest rate at its 124th meeting. In a cautious approach, the committee is expected to hold steady at 28 per cent, opting for prudence over hasty rate cuts.
According to GCB Capital’s Economic and Market Insight analysis, this measured stance will allow the MPC to closely monitor the economy’s progress, particularly with headline inflation currently below 20 per cent.
As the economic landscape continues to evolve, the MPC may signal a potential gradual rate reduction by the third quarter of 2025, contingent on sustained disinflation trends, currency stability, and fiscal discipline.
A rate cut in Q3 2025 could provide a much-needed boost to the economy, but it hinges on the Bank of Ghana’s ability to maintain a delicate balance between growth and inflation control. With fiscal policy and foreign exchange markets playing a critical role, the MPC’s decision will be closely watched by stakeholders and market analysts alike.
However, potential upside risks such as rising fuel prices, depreciation of the cedi or trade tensions could postpone any easing. Conversely, a more rapid disinflation could accelerate this timeline.
Nonetheless, if a rate-cutting cycle does occur, nominal interest rates are likely to decline, which would lower borrowing costs and potentially stimulate economic activity.
However, caution is warranted as any premature easing of policy could trigger a resurgence of inflation, jeopardising the recent progress in price stability.
Headline inflation
Headline inflation has been steadily declining since its peak, with the April figure of 21.2 per cent indicating progress, yet it remains significantly above the central bank’s target range of 8±2 per cent.
The current policy rate of 28 per cent continues to exceed inflation, demonstrating the Monetary Policy Committee’s (MPC) commitment to anchoring expectations.
However, with the real policy rate of 28 per cent compared to the 21.2 per cent inflation has reduced the urgency for further tightening.
The continued decline in inflation to 21.2 per cent, the fourth consecutive monthly drop, signals a gradual easing of inflationary pressures.
However, with the Monetary Policy Rate (MPR) elevated at 28 per cent, the policy stance remains tight to anchor inflation expectations.
Treasury yields, currently ranging between 15.23 per cent and 16.95 per cent (Tender 1953), remain deeply negative in real terms, creating disincentives for holding government securities.
Fiscal consolidation efforts have further motivated the Ministry of Finance to suppress borrowing costs, resulting in limited upside for treasury yields despite the high policy rate.
In the fixed income market, the low real returns on government securities continue to dampen investor appetite.
As Ghana lacks inflation-indexed bonds, investors are increasingly shifting towards higher-yielding corporate debt, bank securities and short- to medium-term assets that provide better liquidity and potential for reinvestment at higher rates if inflation moderates further.
The equity market presents selective opportunities as macroeconomic stabilisation improves investor sentiment.
Banking stocks continue to perform well, benefiting from improved net interest margins and lower impairments, while other listed sectors such as agriculture, manufacturing, and telecoms stand to gain from easing cost pressures and a stabilising cedi.
Ghana cedi
On the currency front, the cedi has shown strong performance, emerging as the best-performing currency globally in May.
This appreciation is supported by a disciplined fiscal outlook, investor confidence and structural measures, including the newly passed Act establishing GOLDBOD and foreign exchange initiatives by the Bank of Ghana.
These interventions are expected to provide short- to medium-term stability to the currency and ease demand-side pressures on foreign exchange markets.
In the commodities space, price stability in locally produced foods and non-food baskets and agricultural imports may continue as global commodity markets adjust, and local currency strength reduces pass-through effects.
However, external shocks, trade tensions and global supply chain risks still present a level of unpredictability that investors must factor into their outlook.
Given the current macro and market dynamics, investors should consider repositioning toward short to medium-duration fixed income instruments, high-quality corporate bonds and equities with strong fundamentals in sectors benefiting from disinflation and exchange rate stability.
Holding moderate commodity exposure, particularly to gold, may provide a hedge against volatility. Meanwhile, given the cedi’s strengthening trajectory and policy support, dollar hoarding may be reduced in appeal, but maintaining a balanced exposure to foreign currency assets could still serve as insurance against future shocks
Source: Graphic online
The Ghana Stock Exchange recorded a landmark performance on Wednesday, as its benchmark Composite Index crossed the 14,000 mark for the first time in history.
At the close of the 7,166th trading session on March 4, 2026, the GSE Composite Index rose by 270.78 points to settle at 14,005.32. The Financial Stocks Index also advanced strongly, gaining 309.94 points to close at 8,805.87.
Market capitalisation climbed to GH¢256.75 billion, up from GH¢251.02 billion recorded the previous day, reflecting sustained investor participation across the market.
A total of 3,583,308 shares were traded during the session, with a combined value of GH¢39.82 million. Although trading volume was lower compared to earlier sessions in the week, the total value represented the highest single day turnover recorded so far this week.
Banking Stocks Lead Market Gains
Banking equities accounted for much of the day’s momentum.
GCB Bank PLC posted one of the strongest gains, rising by GH¢4.52 to close at GH¢49.80. The bank recorded 441,752 shares traded, contributing nearly GH¢22 million to the total value of shares exchanged.
Standard Chartered Bank Ghana PLC added GH¢4.72 to close at GH¢51.96, while Ecobank Ghana PLC closed unchanged at GH¢57.00, with 24,534 shares traded.
Other financial stocks also recorded gains. Enterprise Group PLC rose by GH¢0.80 to GH¢9.00, while Ecobank Transnational Inc. gained GH¢0.13 to close at GH¢1.55.
However, Societe Generale Ghana PLC declined by GH¢0.11 to close at GH¢11.40, making it the only actively traded stock to record a loss during the session.
Telecommunications and Energy Counters Advance
Scancom PLC, operators of MTN Ghana, remained the most actively traded stock. The counter rose by GH¢0.02 to close at GH¢5.80, with 1,968,543 shares exchanged, valued at over GH¢11.4 million. The stock’s closing bid and offer prices indicated sustained demand ahead of its upcoming dividend payment.
In the energy and insurance sectors, Ghana Oil Company Limited advanced by GH¢0.52 to GH¢5.77, while SIC Insurance Company PLC gained GH¢0.29 to close at GH¢4.90.
Republic Bank Ghana PLC increased by GH¢0.11 to GH¢2.73, and Atlantic Lithium Ltd rose by GH¢0.12 to GH¢6.52. Benso Palm Plantation PLC edged up marginally by GH¢0.01 to close at GH¢74.01.
Broader Market Performance
Several listed equities recorded no price changes during the session, including AngloGold Ashanti PLC, Guinness Ghana Breweries PLC, TotalEnergies Marketing Ghana PLC, and Unilever Ghana PLC, among others.
Since the beginning of the year, the Composite Index has recorded a cumulative gain of 59.69 percent, while the Financial Stocks Index has returned 89.49 percent. Wednesday’s performance marked the eighth consecutive trading session of gains for the benchmark index, as market observers monitor the 14,500 point level as the next key threshold.
Banks in Ghana wrote off GH¢1.64 billion in bad debts in 2025, representing a sharp 57.1 percent decline compared to the previous year, according to data released by the Bank of Ghana.
Figures from the central bank’s Domestic Money Banks Income Statement show that in 2024, banks made provisions amounting to GH¢3.82 billion for bad loans, depreciation and other related losses. The significant drop in write-offs in 2025 signals a relative easing in credit losses across the industry.
Despite this improvement, asset quality risks within the banking sector remain elevated. The January 2026 Banking Developments Report indicates that the industry’s Non-Performing Loans ratio declined to 18.9 percent in December 2025, down from 21.8 percent recorded in December 2024.
When adjusted to exclude fully provisioned loan loss categories, the NPL ratio fell more sharply from 8.5 percent to 5.0 percent over the same period, reflecting stronger recovery and provisioning efforts by banks.
However, the total stock of non-performing loans increased marginally by 0.8 percent to GH¢21.0 billion in December 2025. This contrasts with the much higher growth rate of 31.4 percent recorded in December 2024, suggesting that while bad loans are still rising in absolute terms, the pace of growth has slowed considerably.
A breakdown of the NPL figures shows that the private sector continues to account for the overwhelming share of distressed loans. Its proportion of total non-performing loans rose to 97.5 percent in December 2025, up from 96.2 percent a year earlier. In contrast, the public sector’s share declined to 2.5 percent from 3.8 percent over the same period.
The central bank noted that the overall decline in the NPL ratio reflects broad-based improvements in asset quality across most sectors of the economy. However, two sectors recorded worsening loan performance. The construction sector saw its NPL ratio rise from 29.8 percent to 30.7 percent, while the agriculture, forestry and fishing sector experienced a more significant increase from 38.0 percent to 46.3 percent.
All other sectors reported improvements in asset quality during the review period, pointing to gradual stabilization in credit conditions within the banking industry.
Ghana has recorded a decline in its global mining investment standing, slipping seven places in the latest Global Mining Investment Attractiveness Index released by the Fraser Institute.
The country fell from 46th position out of 82 jurisdictions in 2024 to 53rd out of 68 jurisdictions assessed in 2025. Although Ghana’s overall score saw only a marginal decrease, the drop in ranking reflects stronger performance by competing mining destinations worldwide.
Slight Score Decline, Sharper Ranking Impact
In 2024, Ghana achieved a score of 56.98 percent. This declined modestly to 55.21 percent in 2025. Analysts note that the sharper fall in ranking was largely driven by improvements recorded by other countries rather than a significant deterioration in Ghana’s performance.
The Fraser Institute’s Annual Mining Survey evaluates jurisdictions based on mineral potential and policy-related factors that influence exploration investment decisions, including taxation frameworks, regulatory stability, and government policy predictability.
Within Africa, Ghana ranked eighth out of 16 countries surveyed, placing slightly ahead of South Africa, with an overall continental score of approximately 55 percent.
Survey Methodology and Industry Participation
The 2025 survey was conducted electronically between August 5 and November 26, targeting about 2,304 mining industry professionals globally. Senior executives formed a significant portion of respondents, with more than 46 percent serving as company presidents or vice-presidents, while over 25 percent were managers or senior managers.
Participating firms collectively reported exploration expenditures totaling about US$4.2 billion in 2025.
Jurisdictions are ranked according to how public policies either encourage or discourage mining investment. The Investment Attractiveness Index combines two key measures: the Best Practices Mineral Potential Index, which assesses geological prospects, and the Policy Perception Index, which evaluates investor confidence in government policies.
The number of jurisdictions assessed annually varies depending on commodity price trends and activity levels within the global mining sector. Previous surveys evaluated 82 jurisdictions in 2023, 86 in 2022, and 84 in 2021.
Policy Debate Shapes Investor Sentiment
The report comes at a time when sections of Ghana’s mining industry have raised concerns about proposed government reforms, including potential tax and regulatory reviews affecting the sector.
Some mining companies have indicated that changes to existing policies could influence profitability and employment levels if implemented.
Government officials, however, argue that the reforms are intended to ensure the country derives greater value from its mineral resources while maintaining a balance between attracting investment and safeguarding national economic interests.
President Mahama to Embark on Working Visit to South Korea
“Corruption is a Cancer That Erodes Our Nation” — Mahama Urges Stronger Anti-Corruption Fight
Mahama Urges Youth to Prepare for Future in 69th Independence Day Address
-
Entertainment1 week agoTHE INSIDE STORY: Why President Mahama Revoked Gideon Nii Aryeequaye’s Appointment as Executive Secretary of the Creative Arts Agency
-
Entertainment2 weeks ago[EDITORIAL] Praised in Victory, Crucified in Defeat: The Ghanaian Fanbase Paradox
-
Business2 weeks agoThirdWell launches Inclusive Business Centre to support Accredited Inclusive Businesses in Ghana
-
Sports1 week ago2026 FIFA World Cup: President Mahama tasks supporters to return immediately after the tournament
-
Entertainment1 week agoSONA: GH¢20m for Film Sector, GH¢20m for Creative Industries — Mahama Announces Major Investment
-
General News2 weeks agoPolice Arrest Two in Agona Swedru With 209 Slabs of Suspected Narcotics, Reject GH₵100,000 Bribe
-
Sports2 weeks agoBREAKING: Salary Crisis hits Tension at Eleven Wonders Camp for the second time
-
General News2 weeks agoEduwatch Demands Accountability for GH¢42.1bn Education Spending in 2026 SONA