Ghana cuts rates to lowest in 4 years while peers pause amid global uncertainty

While some African central banks are pausing to assess the economic fallout from the escalating conflict in the Middle East, Ghana has continued easing monetary policy, delivering its fifth interest rate cut in a row on Wednesday.

At its second Monetary Policy Committee (MPC) meeting of the year, the Bank of Ghana reduced its Monetary Policy Rate by 150 basis points to 14 percent, the lowest level since October 2021. The reduction was also smaller than the previous four cuts, which ranged between 250 and 350 basis points, suggesting a more cautious approach as the easing cycle matures.

The move slightly exceeded market expectations of a 100 basis-point cut, signalling policymakers’ stronger focus on supporting economic growth despite emerging global risks.

The central bank said easing inflation and favourable domestic conditions created room to continue loosening policy even as geopolitical tensions threaten global energy markets.

Despite Ghana — Africa’s largest gold producer — cutting its MPR rate by 1,400 basis points since last year, Johnson Asiama, the central bank governor, noted that real interest rates remain elevated. “As inflation continues to decline, real rates remain relatively high,” he told reporters at a press conference.

BoG expects inflation to remain within its 6–10 percent target band over the medium term, although risks are emerging from rising crude oil prices linked to the escalating conflict involving the United States, Israel and Iran.

Last month, headline inflation slowed to a 25-year low of 3.3 percent, but policymakers warned that base effects and higher global energy prices could trigger some upward pressure in the coming months.

Strong gold prices have also helped stabilise the country’s external position. The surge in bullion prices over the past year has boosted foreign exchange inflows, easing pressure on the cedi and providing additional room for monetary easing.

Still, the conflict in the Persian Gulf threatens to complicate the outlook for central banks across Africa by pushing up oil prices, increasing import costs and potentially reversing recent gains in inflation.

Ghana’s policymakers, however, appear more optimistic than many of their peers, citing easing price pressures and accelerating economic growth.

Asiama said the central bank would closely monitor developments in the Middle East and was prepared to act if inflation risks intensified.

Angola, Morocco hold rates

Elsewhere on the continent, policymakers have adopted a more cautious stance.

The National Bank of Angola kept its key interest rate unchanged at 17.5 percent last week, marking its first pause after three consecutive rate cuts. The decision came as inflation continues to ease, with headline inflation falling to 13.35 percent in February, the lowest level since July 2023, supported by a stable kwanza.

Similarly, Morocco’s central bank left its benchmark interest rate unchanged at 2.25 percent on Tuesday, extending its hold for a fourth consecutive meeting. Policymakers cited strong economic activity, contained inflation and heightened global uncertainty.

The North African economy is estimated to have expanded 4.8 percent in 2025, with growth projected to accelerate to 5.6 percent this year, largely driven by stronger agricultural output. The country has also recorded mild deflation since November, with prices falling 0.8 percent year-on-year in January.

Attention now turns to South Africa, where the central bank is expected to meet next week. Despite easing price pressures, economists expect the South African Reserve Bank to keep its benchmark rate unchanged as rising oil prices linked to the Middle East conflict could push inflation higher in coming months.

Inflation in Africa’s most industrialised economy slowed to 3.0 percent in February, down from 3.5 percent in January, remaining comfortably within the central bank’s 3–6 percent target range.