Lower Inflation to Ease Borrowing Costs but SME Credit Access Remains Constrained – Joe Jackson
Chief Executive Officer of Dalex Finance, Joe Jackson, has welcomed the sustained decline in Ghana’s inflation rate, but cautions that the impact on borrowing costs, particularly for SMEs, will not be immediate due to persistent structural constraints in the financial system.
Speaking on Ghana Tonight on Thursday, December 4, 2025, Mr Jackson noted that although headline inflation and the Ghana Reference Rate (GRR) continue to fall, SMEs should temper their expectations regarding cheaper credit in the short term.
“As an SME, you hear that the reference rate is falling and inflation is falling. It sounds like good news,” he said. “But the truth of the matter is that it’s like hearing that rain is coming and you don’t own an umbrella. Banks won’t just adjust pricing because the Bank of Ghana has reduced the reference rate. They adjust when their perception of risk changes.”
According to him, commercial banks still favour government securities over lending to SMEs because Treasury bills remain relatively attractive and risk-free.
“At this rate of inflation, banks still love T-bills more than they love SMEs,” he stressed. “T-bills don’t negotiate, they don’t complain, and they don’t default.”
Mr Jackson, however, maintained that the continued easing of inflation and benchmark rates will eventually translate into lower borrowing costs.
“Over the long term, certain things will happen—one, the cost of borrowing will definitely come down. No one should be confused about that,” he stated. “It may take some time; it won’t happen tomorrow. But businesses with access to credit stand to benefit from lower input costs and improved profitability.”
He advised SMEs to strengthen their financial documentation and maintain proper records to position themselves for credit when conditions fully improve.
Ghana’s inflation rate fell for the eleventh straight month in November 2025, dropping to 6.3% from 8.0% in October, according to new CPI data released by the Ghana Statistical Service.
Government Statistician Dr Alhassan Iddrisu attributed the decline to broad-based reductions across both food and non-food components. Month-on-month inflation stood at 0.9%.
Food inflation eased sharply from 9.5% to 6.6%, while non-food inflation slowed to 6.1% from 6.9%. Services inflation also moderated to 3.8%.
Regionally, the North East Region recorded the highest inflation at 12.3%, whereas the Savannah Region posted a marginal deflation of -0.02%.
The sustained disinflation trend has strengthened expectations of a more accommodative monetary environment in the medium term, though analysts caution that structural bottlenecks including high utility costs and limited credit to SMEs remain key risks to business recovery.
