- Private-Sector Credit Growth Accelerates to 41.20% as Liquidity Expands
Credit to Ghana’s private sector expanded sharply in the first half of 2026 as stronger liquidity within the financial system and declining interest rates encouraged banks to increase lending to businesses and households.
The Bank of Ghana’s July 2026 Summary of Economic and Financial Data showed that nominal private-sector credit grew by 41.20% year-on-year in June, accelerating from 40.40% in May and 28.70% in April.
When adjusted for inflation, real private-sector credit increased by 34.10%, compared with growth of 35.40% in May and 24.50% in April. The expansion indicates that credit growth remained substantial even after accounting for changes in consumer prices.
The nominal value of private-sector credit reached GH¢119.60 billion at the end of June 2026, up from GH¢84.80 billion in the corresponding period of 2025.
Real private-sector credit, measured using the Ghana Statistical Service’s consumer price index, increased to GH¢44.20 billion from GH¢32.90 billion a year earlier.
The figures point to a significant recovery in financial intermediation, with banks directing a larger volume of resources towards companies and individuals after a period in which high interest rates, inflation and economic uncertainty constrained lending.
Private-sector credit growth strengthened progressively during the opening months of 2026. Nominal growth increased from 19.50% in January to 18.70% in February, before accelerating to 23.80% in March, 28.70% in April, 40.40% in May and 41.20% in June.
Real credit growth followed a similar pattern, rising from 15.10% in January to 19.90% in March and 34.10% by June.
The expansion occurred alongside a considerable reduction in borrowing costs. Ghana’s average lending rate declined to 15.64% in June 2026 from 27.00% a year earlier, while the Ghana Reference Rate fell to 10.02% from 23.80%.
Lower lending rates have improved the conditions under which businesses can finance working capital, inventories, equipment and expansion. They have also reduced the indicative cost of consumer and household credit, although actual borrowing rates continue to depend on the risk profile of individual customers.
The acceleration in credit was supported by rapid growth in monetary aggregates.
Total liquidity, measured as broad money plus foreign-currency deposits, increased by 28.50% year-on-year to GH¢417.60 billion in June. This compared with annual growth of 28.00% in May and 22.20% in April.
Broad money, excluding foreign-currency deposits, expanded by 27.70% to GH¢338.60 billion. Narrow money, comprising currency outside banks and demand deposits, increased by 29.10% to GH¢221.50 billion.
Demand deposits recorded annual growth of 33.80%, while currency outside banks increased by 20.00%. Savings and time deposits expanded by 25.00% to GH¢117.00 billion.
The rise in demand deposits suggests that a larger volume of funds was immediately available for transactions, while the growth in savings and time deposits strengthened the banking sector’s pool of funds for lending and investment.
Foreign-currency deposits stood at GH¢79.00 billion in June, representing annual growth of 32.20%. Although this was below the 41.70% growth recorded in May, it indicates that foreign-currency holdings within the banking system remained significantly higher than a year earlier.
Reserve money, which represents the monetary base controlled most directly by the central bank, increased by 31.70% year-on-year to GH¢148.50 billion.
The growth was driven largely by an increase in banks’ reserves, which contributed 20.10 percentage points to the expansion in reserve money. Currency outside banks contributed 10.30 percentage points, while non-bank deposits contributed 1.40 percentage points.
The stronger reserve position of banks points to greater liquidity within the financial system, improving their capacity to support lending and settle transactions.
Net foreign assets emerged as a major source of monetary expansion, growing by 63.60% year-on-year in June. Net domestic assets increased by 17.80%.
The strong growth in net foreign assets reflects the effect of Ghana’s external-sector performance on domestic liquidity. The country recorded substantial export receipts and a large trade surplus during the first half of 2026, increasing the foreign assets held within the monetary system.
However, net foreign assets declined in absolute terms from GH¢139.10 billion in May to GH¢124.00 billion in June. Net domestic assets, meanwhile, rose from GH¢278.20 billion to GH¢293.60 billion.
Claims on the private sector reached GH¢120.70 billion in June and contributed 14.10 percentage points to the annual growth in net domestic assets.
Net claims on government fell from GH¢131.30 billion in May to GH¢124.80 billion in June, although they still contributed 6.40 percentage points to net domestic asset growth.
The combination of expanding private-sector credit and moderating claims on government may suggest a gradual improvement in the allocation of banking-sector resources towards productive private activity rather than government financing.
The increase in liquidity and lending provides support for Ghana’s broader economic recovery. Greater access to credit can help businesses expand production, maintain employment and invest in new capacity, particularly after several years of elevated financing costs.
Yet the speed of monetary and credit growth will require careful monitoring. Headline inflation increased from 3.70% in May to 5.30% in June, while non-food inflation rose to 6.30%.
Rapid growth in money supply does not automatically produce higher inflation, particularly where it is matched by increased output and demand for money. However, sustained liquidity expansion could add to price and exchange-rate pressures if credit growth significantly exceeds the economy’s productive capacity.
Asset quality will also be important. The expansion of lending must be accompanied by sound credit assessment and monitoring to prevent future increases in non-performing loans.
The banking industry’s non-performing loan ratio improved to 16.10% in June from 23.10% a year earlier. Preserving that progress while expanding credit will be a key test of the quality of the financial-sector recovery.
The monetary indicators therefore depict an economy experiencing a strong revival in credit and financial-system liquidity. Private-sector lending is growing at its fastest pace in the period covered by the report, while deposits, broad money and reserve money are all expanding significantly.
The development could support investment and economic activity during the remainder of 2026. However, the Bank of Ghana will need to balance the benefits of stronger lending against the potential risks that rapid liquidity growth may pose to inflation, the exchange rate and financial stability.
