The Association of Ghana Industries (AGI) says the increasing concentration of bank lending toward commerce and the service sector, warning that inadequate financing for industry and manufacturing could undermine Ghana’s long-term economic transformation agenda.

The concern comes despite a marginal decline in the Ghana Reference Rate (GRR), which eased from 10.06% in April to 10.03% for May 2026, according to the Ghana Association of Banks.

While welcoming the downward adjustment in the benchmark lending rate, Greater Accra Regional Chairman of AGI, Tsonam Akpeloo, argued that the more critical issue remains how credit is distributed across the economy.

According to him, a significant share of private sector financing continues to flow into trading activities and services rather than productive sectors such as manufacturing and industrial production.

“We observe that a lot more of the credit facilities are not necessarily going to industries. It appears that commerce, buying and selling, and the service sector seem to be taking a chunk of the monies that are going to the private sector,” he stated.

The comments highlight growing concerns within Ghana’s industrial sector over the structure of bank lending, at a time policymakers are pushing for industrialisation, import substitution, and value-added production as key drivers of economic growth.

Mr. Akpeloo stressed that although declining benchmark rates could gradually ease borrowing costs for businesses, industries still face significant barriers in accessing long-term and affordable financing required for expansion and capital investment.

He argued that the industrial and manufacturing sectors remain central to sustainable economic growth, employment generation, and the successful implementation of government initiatives such as the proposed 24-hour economy policy.

“The real sector is really the one that drives economic expansion, economic growth, and job creation,” he emphasised.

Data from Ghana’s banking sector have consistently shown stronger credit growth toward commerce and services, partly due to lower perceived risks, shorter repayment cycles, and quicker returns compared to manufacturing and industrial projects, which often require large capital commitments and longer gestation periods.

Industry players, however, warn that continued underfunding of manufacturing could weaken Ghana’s broader economic transformation ambitions and limit the country’s ability to build resilient local production capacity.

Mr. Akpeloo noted that AGI remains hopeful that the continued decline in the Ghana Reference Rate will eventually translate into lower commercial lending rates and improve financing conditions for businesses.
“This decline will go a long way to boost the overall interest rates at which we access facilities at the banks and make sure that the interest rates get cheaper over time,” he said.

He further called on banks and financial institutions to develop dedicated financing mechanisms tailored specifically for industrial growth, including special-purpose funding vehicles and long-term capital support structures.

According to him, industries require patient capital to finance factory expansion, machinery acquisition, and the establishment of new production plants capable of scaling domestic manufacturing output.

“We really want to encourage the banking sector to create a special purpose vehicle or other mechanisms for boosting the industrial and manufacturing sector,” he added.