Economic Gains Impressive, but Borrowing Costs Remain a Concern — Kyei-Mensah-Bonsu

Former Majority Leader and Member of Parliament for Suame, Osei Kyei-Mensah-Bonsu, has lauded the government for what he described as “remarkable and commendable progress” in stabilising Ghana’s economy over the past year. He pointed to the sustained strengthening of the Ghanaian cedi against major foreign currencies and the drop in inflation to single digits — currently at 9.4% — as evidence of prudent economic management and policy consistency.

Speaking on Channel One TV’s The Point of View with Bernard Avle on Monday, October 6, 2025, Mr. Kyei-Mensah-Bonsu noted that the government’s fiscal discipline and monetary reforms have begun to yield positive results. However, he cautioned that the high cost of borrowing remains a major bottleneck to private sector growth and full economic recovery.

“What should concern us now is the cost of borrowing because it is not reflecting in that. Is there anything wrong? Because necessarily it should translate into that,” he observed. “If the interest rate is still hanging up there, it means some of the fundamentals are not talking to each other — and we need to interrogate that.”

The former Majority Leader explained that while inflation and exchange rate stability signal macroeconomic improvement, high lending rates continue to stifle local businesses and discourage productive investments. He added that unless lending costs fall significantly, the private sector — regarded as the engine of economic growth — will find it difficult to expand and create jobs.

Mr. Kyei-Mensah-Bonsu also acknowledged that part of the current stability stems from prudent financial management and substantial reserves inherited from the previous administration. He revealed that Ghana’s foreign reserves, which stood at over $9 billion before the economic turbulence of 2022–2023, provided an important cushion that supported the Bank of Ghana’s interventions and helped stabilise the cedi.

He praised the government for building on that foundation, noting that recent improvements in the balance of payments, increased foreign exchange inflows, and fiscal restraint have restored some level of investor confidence.

Nonetheless, he warned against complacency. “The government must not rest on its laurels. What is important now is policy coordination — fiscal and monetary policies must talk to each other. The Bank of Ghana and the Ministry of Finance must continue to work hand in hand to ensure these gains are not reversed,” he urged.

Recent data from the Bank of Ghana’s Monetary Policy Report supports his assertion of macroeconomic progress. The report indicates that average lending rates have declined from 26.6% to 24.2%, while yields on short-term money market instruments are trending downward. Specifically, the 91-day Treasury bill rate fell from 13.4% at the end of July 2025 to 10.3% in August, reflecting easing conditions in the money market.

Economists, however, share Mr. Kyei-Mensah-Bonsu’s caution that lower inflation and exchange rate stability must translate into cheaper credit and improved access to finance for businesses. Many argue that without affordable capital, the broader population will not feel the impact of the government’s economic gains.

In closing, Mr. Kyei-Mensah-Bonsu emphasised that sustainable economic growth will depend on bridging the gap between macroeconomic stability and microeconomic relief. “It’s not just about the numbers looking good on paper,” he said. “It’s about ensuring that households, farmers, and business owners can feel the difference in their daily lives. Only then can we say we are truly rebuilding the economy.”