Ghana’s Inflation Falls, But SMEs Still Struggle: What the Numbers Don’t Show

Ghana’s headline inflation rate dropped to 11% in August 2025, according to the Ghana Statistical Service (GSS), marking its lowest level since late 2021. The Bank of Ghana (BoG) has seized on this achievement as evidence that its tight monetary policy — anchored by a policy rate that peaked at 30% last year — is finally paying off.

But for Ghana’s small and medium enterprises (SMEs), which form more than 85% of all businesses and contribute nearly 70% of GDP, the story looks different. Many business owners interviewed in Accra, Kumasi, and Takoradi insist that the celebrated macroeconomic recovery feels distant from their daily struggles.

Disinflation vs. Reality

While the overall consumer price index is falling, the cost of doing business remains high. For instance, electricity tariffs rose by 18% in May 2025 following a Public Utilities Regulatory Commission (PURC) adjustment. Transport costs, heavily tied to global oil markets, have also seen only marginal relief. A recent World Bank Africa Pulse report noted that in Ghana, “inflationary pressures on utilities and fuel disproportionately affect small enterprises, eroding their margins even when headline inflation eases.”

Take the case of Afia, a bakery owner in Madina, who shared with Accra Street Journal that the price of flour has indeed stabilized compared to last year. “But my oven runs on electricity, and my distribution depends on fuel. My bills haven’t gone down. So when they say inflation is falling, I don’t feel it,” she said.

This disconnect highlights a persistent challenge: macroeconomic stabilization does not automatically translate into microeconomic relief.

The Credit Crunch

Even more pressing than high costs is the issue of access to credit. In theory, a policy rate cut should encourage lending. In practice, SMEs in Ghana still face prohibitive borrowing costs. Commercial lending rates, according to the BoG’s July 2025 banking sector report, remain above 25% for most businesses.

An IMF working paper published in June 2025 observed that in frontier markets like Ghana, “banks exhibit risk aversion in extending credit to SMEs, particularly in post-inflationary adjustment phases.” This means that even with disinflation, financial institutions remain reluctant to lower rates or expand SME loan books.

Kwame Mensah, who runs a small furniture-making business in Kumasi, put it bluntly: “The bank tells me inflation has gone down, but when I applied for a loan in July, they still quoted me 28%. How is that different from when inflation was 30%?”

Structural Barriers

The challenges facing SMEs extend beyond inflation and credit. Ghana’s infrastructure bottlenecks — unreliable electricity, congested ports, and slow internet in secondary towns — continue to weigh heavily.

A 2024 survey by the Association of Ghana Industries (AGI) found that 67% of SMEs cited “infrastructure deficiencies” as their main barrier to scaling. The report concluded that while macroeconomic stabilization is necessary, “long-term competitiveness requires addressing structural bottlenecks that undermine productivity.”

Digital adoption remains another concern. While e-commerce platforms like Jumia and local startups have seen growth, a GSMA Mobile Economy Report in 2024 revealed that nearly 70% of Ghana’s SMEs still lack a digital presence. Without access to online sales channels, many SMEs remain exposed to local demand shocks and rising operating costs.

Global Lessons

Ghana is not alone in this disconnect between headline disinflation and SME realities. Nigeria, for instance, saw inflation ease slightly in early 2024, but SMEs still faced soaring energy costs due to the removal of fuel subsidies. Kenya, similarly, managed to lower its inflation rate, but a sharp rise in electricity tariffs in 2023 offset the gains for small businesses.

In countries where SMEs form the backbone of the economy, economists argue that stabilization must go hand-in-hand with targeted SME support — from concessional financing schemes to digital capacity building. The African Development Bank (AfDB) has recommended that West African governments prioritize “sectoral relief programs” alongside monetary stabilization.

Policy Blind Spots

The Bank of Ghana’s Monetary Policy Committee (MPC), which is expected to cut the policy rate from 25% to 22% later this September, argues that lower inflation and easing rates will eventually translate into relief. Yet, critics warn that the MPC risks overlooking the time lag and the uneven impact across sectors.

Economist Dr. Priscilla Adjei of the University of Ghana recently noted in a seminar that “macroeconomic stabilization is necessary but not sufficient. Without structural reforms and SME-focused interventions, Ghana risks celebrating numbers while businesses suffocate.”

The Way Forward

What would meaningful relief look like for Ghana’s SMEs?

Targeted Credit Schemes: Expand concessional lending programs through the Ghana Enterprises Agency, ensuring SMEs can borrow at single-digit rates.

Energy & Utility Stabilization: Introduce predictable utility pricing models that protect small businesses from sudden tariff hikes.

Digital Transformation Support: Provide tax incentives for SMEs that adopt digital platforms for sales and logistics.

Infrastructure Investment: Accelerate projects in power distribution and transport corridors that directly reduce operating costs.

The experience of Rwanda’s SME policy framework, which combines financing with infrastructure and digital support, offers a potential model. In Kigali, small enterprises now account for 40% of digital commerce transactions, partly due to targeted government incentives.

Conclusion From Accra Street Journal

Falling inflation is a positive headline. But for Ghana’s SMEs — the bakers, tailors, welders, traders, and small manufacturers who form the backbone of the economy — the struggle continues. Unless policymakers bridge the gap between macroeconomic stabilization and microeconomic reality, Ghana’s celebrated recovery risks becoming an elite narrative, disconnected from the entrepreneurs who power its streets and markets.

Samuel Kwame Boadu is the Founder and Editor-in-Chief of Accra Street Journal, SKB Journal, and Accra Sports News, all under Samboad Publishing, a subsidiary of Samboad Business Group Ltd.

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