The Ghana Venture Capital and Private Equity Association (GVCA) has welcomed the Bank of Ghana’s recent decision to reduce the policy rate to 15.5 percent, describing it as a step in the right direction for easing financing conditions in the country’s private sector.
Speaking on the move, Amma Gyampo, Chief Executive Officer of GVCA, said the lower rate should help businesses access more affordable debt, particularly for working capital, while also improving repayment capacity.
“Private equity is a long-term investment. It is closely linked to debt markets. More affordable debt in the market is critical because it helps businesses borrow at reasonable rates and repay loans more easily when rates are lower,” she said.
Gyampo, however, cautioned that the rate cut alone is insufficient. She emphasized the need for deeper structural reforms to align Ghana’s borrowing costs with regional peers and create a more predictable macroeconomic environment for investors.
“We are looking at regional comparisons. Ghana’s policy rates remain high relative to other markets in the region. While it’s great to see an improved macro environment this year, including favorable factors like gold prices, there is more room for the government and the Ministry of Finance to focus on fundamental economic reforms,” she added.
The GVCA CEO also stressed the central role of the private sector in driving economic growth, productivity, and revenue mobilization.
She urged policymakers to strengthen incentives, legal frameworks, and tax policies to encourage domestic capital formation, especially in light of declining global aid flows and development finance.
“The private sector is the driver of every economy. If we want more tax contributions, a better skilled workforce, and stronger productivity, we need policies, incentives, and frameworks that encourage domestic investment. This is particularly important now, as global aid and development finance are facing cuts,” Gyampo said.
The rate reduction may provide some relief for businesses struggling under high borrowing costs, but Ghana’s economic fundamentals including fiscal discipline, inflation control, and debt sustainability will be crucial in sustaining private sector growth and attracting long-term investment in 2026.
The Bank of Ghana’s move is the latest in a series of monetary policy adjustments aimed at balancing economic recovery with price stability and investor confidence, as the country navigates global uncertainties and regional competition for capital.
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Source: www.myjoyonline.com