Policy rate reduction is meaningless without credit reform for ordinary Ghanaians – CUTS International

 

CUTS International has raised concerns that recent policy rate cuts in Ghana are failing to benefit ordinary consumers, citing the country’s predominantly cash-and-carry economic system.

Speaking to 3Business on 2 February 2026, the West Africa Regional Director of CUTS International, Kusi Adomaku, said Ghana’s credit framework requires urgent review if low and middle-income earners are to feel the impact of monetary policy decisions.

He explained that while reductions in the policy rate are generally positive, they have limited effect in an economy where access to credit remains low.

“The policy rate is good, but one of the challenges is that in this country, very few Ghanaians take credit. Almost everything requires physical cash. If you want to buy a car, about 95% of Ghanaians must pay cash to do so,” he said.

The consumer advocacy group, noted that although the Bank of Ghana has reduced its policy rate from above 20% last year to 15.5%, this has not translated into improved access to credit for households.

Mr Adomaku added that the benefits of lower interest rates tend to favour those in the formal sector with stable incomes, while the majority of consumers remain excluded.

Further emphasizing that, “If you want to buy anything, you need cash. So, when the policy rate goes down, it helps people in the formal sector who are on regular incomes. Banks may reduce their rates, but that does not automatically help the wider population.”

His comments follow the Bank of Ghana’s decision to cut the policy rate by 250 basis points on 28 January 2026, as part of efforts to stimulate economic activity and ease borrowing conditions.

By Coffie Mawuedem Noel