The Bank of Ghana has cut interest rates by more than 1,400 basis points over the easing cycle, a move that has lowered the average lending rate by about 600 basis points and pulled inflation toward target. The same rate path is squeezing Ghana’s banking sector profitability by attacking the line item that still drives nearly 70 percent of industry revenue: net interest income. PricewaterhouseCoopers (PwC) Ghana’s 2026 Banking Survey puts the squeeze in numbers, and tells the country’s commercial banks to rebuild their business around fee-based, digital revenue.
Titled “When Rates Recede: Sustaining and Returning Value in Ghana’s Banking Sector Through a Falling Interest Rate Cycle,” the survey was presented at PwC’s 2026 Ghana Banking Forum, attended by chief executive officers, chief financial officers, representatives of the Ghana Association of Banks (GAB), the Bank of Ghana (BoG), and other stakeholders. The diagnosis is the work of Country Senior Partner Vish Ashiagbor and Financial Services Leader Kingsford Arthur.
The Margin Squeeze Is Already in the Numbers
The survey reports that the Bank of Ghana’s monetary policy easing in response to declining inflation led to a reduction of more than 1,400 basis points in the Ghana Reference Rate (GRR), with the industry’s average lending rate falling by approximately 600 basis points. The headline rate path is a victory for the macroeconomy, but it lands directly on the line item that has carried the banking sector. Net interest income still accounts for nearly 70 percent of total industry revenue, and the survey frames the dependence as the single biggest threat to forward earnings. The faster the rate path falls, the faster the spread that funds the sector narrows.
That dependence was workable in a high-rate environment that cushioned margins. As the policy rate falls toward the 12 percent to 13 percent range PwC forecasts for early 2027, the spread between what banks earn on loans and securities and what they pay for deposits narrows. PwC expects net interest margins to remain under pressure for the next six to twelve months, and banks that have no fallback beyond the spread will be the ones most exposed.
The same forces that drive the squeeze are also creating an opening. Cheaper borrowing should pull private sector credit off the floor; Ghana’s services and commerce sectors already dominate the lending book, and a renewed appetite for working capital could revive loan growth. The catch is that loan growth at lower rates is not, by itself, a fix. The survey frames the next phase as a question of revenue mix; volume growth alone is not the answer, and the firm’s prescription is to start the rework while the macro is still supportive.
A Decade of Quiet Repositioning on the Balance Sheet
The mix that banks earn from has already shifted under them. PwC’s 2026 survey documents a quiet inversion over the past decade, from a lending-led model to a government-securities-led one. In 2015, loans contributed 64 percent of net interest income, with investment securities at 33 percent, and the loan book was, in plain terms, the engine.
By 2025 the engine had been swapped. Government securities accounted for 55 percent of net interest income, while loans contributed just 38 percent. The role reversal reflects the high-rate environment, in which Treasury bill yields at multi-year highs made government paper the more attractive destination for bank deposits. That strategy worked while yields were sticky. Treasury yields are now falling in step with the policy rate, which means the assets banks leaned on hardest are losing yield first, and the loan book has to be rebuilt at exactly the wrong time in the spread cycle.
The exposure is structural, not cyclical. PwC warns that the growing reliance on government securities leaves banks increasingly exposed to declining Treasury bill yields as interest rates continue to ease.
In other words, the same balance sheet that looked safe in 2023 is the one most at risk of being marked down over the next two years. The implication is that banks will need to rebuild lending capacity, even as the spread on those loans compresses. The two halves of the squeeze, lower Treasury income and thinner loan margins, are landing on the same income statement.
| Source of net interest income | 2015 share | 2025 share |
|---|---|---|
| Loans | 64% | 38% |
| Investment / government securities | 33% | 55% |
Credit Is Concentrated in the Riskier Sectors
The lending book that Ghana’s banks have stepped back from is also the most credit-stressed part of the economy. PwC’s survey reports that bank lending remains concentrated in the services sector, which accounted for 22.2 percent of total credit in 2025, followed by commerce and finance at 19 percent. Those same sectors also recorded the highest levels of impaired assets and non-performing loans. Lower policy rates will not, on their own, heal that concentration.
The pattern is consistent with what the broader sector has been reporting, from Ghana’s banks hitting 73 percent sustainability compliance under the Bank of Ghana’s roadmap. Credit-risk concentration in services and commerce is the harder leg of the rebuild, because the cure (more lending at lower rates) is also the pressure point.
Banks that have steered around this concentration by sitting on government paper have earned a clean return for a few years. They will now have to underwrite the recovery in the same sectors where impairment risk is highest, with thinner margins to absorb losses. The next test is execution, not policy. The survey does not break out non-performing loan ratios by sector, but the directional message is that growth and credit quality will be in tension for as long as the rate path keeps falling. That tension is the new normal for Ghanaian commercial banks in 2026 and beyond, on top of an existing execution load that includes tightening fraud controls after GH₵63 million in reported banking fraud in 2023.
PwC’s Prescription: Five Bets Beyond the Balance Sheet
The pivot PwC is demanding is not subtle. The survey calls on banks to move beyond traditional balance sheet lending toward digital ecosystems that generate sustainable, fee-based income. Arthur framed the shift bluntly at the forum: “If we remove interest income from your income statement today, what remains, and is it strong enough to build the future of your bank?” The conclusion the firm is asking executives to draw is that, for most Ghanaian banks, the answer is no.
The prescription is five specific bets, each capital-light by design and built to replace interest income with fees, commissions, and transaction revenue. Banks that have already invested in agency banking, mobile money rails, or corporate treasury platforms have a head start on at least one of the five. The full list, which PwC presents as moves to make in parallel, runs through payments, SME platforms, trade finance, embedded APIs, and advisory work.
- Payment and transactional banking: merchant acquiring, point-of-sale networks, and integrated cash management.
- SME ecosystems: digital invoicing and supply chain platforms that embed small and mid-sized businesses.
- Trade finance and FX: letters of credit, guarantees, and corporate foreign exchange hedging.
- Embedded banking: APIs that plug bank services into fintech, retail, and digital payment platforms.
- Advisory services: corporate debt restructuring, capital raising, and public-private partnership advisory.
If we remove interest income from your income statement today, what remains, and is it strong enough to build the future of your bank? The future belongs to institutions that pivot away from balance sheet dependency towards transaction and ecosystem banking. By scaling digital platforms, trade finance, API-enabled embedded partnerships and advisory services, banks can unlock capital-light revenue streams.
Arthur, Financial Services Leader at PwC Ghana, at the 2026 Ghana Banking Forum.
The Macro Backdrop Banks Are Sailing Into
The macro numbers behind the squeeze are, in isolation, a relief. PwC expects inflation to stay within the Bank of Ghana’s medium-term target range of 6 ± 2 percent, set out in the central bank’s inflation targeting framework. The cedi is expected to depreciate gradually to between GH¢11.50 and GH¢13.00 to the US dollar by the end of the year. Together, those two numbers describe a stabilising economy, not a stressed one, which is the broader context in which the bank-level squeeze is playing out.
The Bank of Ghana is doing the work the central bank is supposed to do. The policy rate is expected to decline to between 12 percent and 13 percent by early 2027, completing the easing cycle that has already taken the Ghana Reference Rate down by more than 1,400 basis points. For households and corporate borrowers, that is unambiguously the good news. For the spread-dependent banking sector, it is the squeeze.
Ashiagbor told the forum that the macro stabilisation is welcome but reframes the operating problem. “We are transitioning from a high-interest-rate environment that cushioned margins to an easing cycle that will test corporate resilience. This next phase must be driven by deep, deliberate banking transformation.” The call is for banks to start the transformation now, while the macro is still supportive. Waiting for a stress event to force it is the more expensive option.
PwC’s framing is that the cycle is structural. The firms that read it that way have a planning horizon of years, not quarters.
We are transitioning from a high-interest-rate environment that cushioned margins to an easing cycle that will test corporate resilience. This next phase must be driven by deep, deliberate banking transformation.
Ashiagbor, Country Senior Partner at PwC Ghana, at the 2026 Ghana Banking Forum.
What “Outperformance” Looks Like by 2027
PwC’s prescription for outperforming is shorter than its diagnosis. The firm expects net interest margins to stay under pressure for the next six to twelve months, and possibly beyond, but believes that institutions which successfully diversify into fee-based and transaction-driven businesses will significantly outperform peers over the medium term. The outperformance gap, in PwC’s framing, is the gap between banks that redesign the business model now and banks that wait for the rate cycle to reverse. Ashiagbor closed the forum with that point.
“The winners in the medium term will not be those waiting for interest rates to bounce back, but those who redesign their business models around value-added services, transaction volumes and customer-centric platforms.” The full survey, the latest in PwC Ghana’s banking survey series, is structured around that bet. Banks that match the survey’s diagnosis with the survey’s prescription are the ones PwC sees outperforming the sector by 2027.
Frequently Asked Questions
What is the PwC 2026 Ghana Banking Survey about?
PwC’s 2026 Ghana Banking Survey is the 2026 edition of the firm’s annual assessment of Ghana’s commercial banks, presented at the 2026 Ghana Banking Forum in Accra. The 2025 edition focused on artificial intelligence and generative AI in banking; the 2026 edition, titled “When Rates Recede: Sustaining and Returning Value in Ghana’s Banking Sector Through a Falling Interest Rate Cycle,” focuses on the impact of the central bank’s rate cuts, which have already taken the Ghana Reference Rate down by more than 1,400 basis points. Its core finding is that the sector’s reliance on net interest income, which still accounts for nearly 70 percent of total revenue, leaves it exposed to a multi-year margin squeeze.
Why are falling interest rates a problem for Ghanaian banks?
Ghanaian banks earn roughly 70 percent of their revenue from net interest income, the spread between what they charge on loans and securities and what they pay on deposits. The dependence deepened over the past decade, as the share of net interest income coming from government securities rose from 33 percent in 2015 to 55 percent in 2025, while the share from loans fell from 64 percent to 38 percent. With the policy rate expected to decline to between 12 percent and 13 percent by early 2027, that mix now works against the sector for the first time in years.
How concentrated is Ghana’s bank credit by sector?
PwC’s survey reports that services accounted for 22.2 percent of total bank credit in 2025, and commerce and finance accounted for 19 percent. Both sectors also recorded the highest levels of impaired assets and non-performing loans in the loan book. The implication is that any revival in private sector credit, which the rate cuts are designed to encourage, will run through the same sectors that already hold the most risk.
What is the Ghana Reference Rate, and how much has it fallen?
The Ghana Reference Rate (GRR) is the Bank of Ghana’s benchmark used by commercial banks in pricing loans. PwC reports that the central bank’s monetary policy easing in response to declining inflation has cut the GRR by more than 1,400 basis points, with the industry’s average lending rate falling by approximately 600 basis points over the same period. The policy rate itself is forecast to decline to between 12 percent and 13 percent by early 2027, completing the easing cycle.
What is PwC recommending Ghanaian banks do?
PwC identified five strategic areas for diversifying non-interest income: expanding payment and transactional banking through merchant acquiring and point-of-sale networks, building SME ecosystems through digital invoicing and supply chain platforms, growing trade finance and FX services, developing embedded banking partnerships through APIs, and expanding advisory services in areas like debt restructuring and capital raising. The common thread is that each of the five is capital-light, meaning it does not require banks to add risk-weighted assets to grow the fee line. The argument is that these moves, executed in parallel, can replace the interest income lost to the rate cycle.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or professional advice. Banking sector conditions and forecasts discussed here reflect the views of PwC Ghana as published in its 2026 Ghana Banking Survey. Figures are accurate as of the publication date and may change. Readers should consult a qualified financial professional before making any investment or business decisions based on this content.
