The Association of Ghana Industries (AGI) is calling for a reduction in the Bank of Ghana’s benchmark policy rate, as the Monetary Policy Committee (MPC) convenes to announce its latest decision today. The appeal comes amid a notable rebound in key macroeconomic indicators, particularly the strengthening of the Ghana cedi and signs of easing inflationary pressures.
At its last meeting, the MPC raised the policy rate by 100 basis points to 28%, citing persistent inflation risks. However, with the cedi appreciating over 24% year-to-date against the U.S. dollar and inflation showing signs of moderation, the AGI believes the time is ripe for a policy shift that supports economic growth.
AGI Chief Executive Officer, Seth Twum Akwaboah, expressed optimism that the improving economic landscape justifies a rate cut that could significantly benefit the private sector.
“I think that MPC is always based on parameters and improvement and the macroeconomic environment. Therefore, we definitely expect some improvement in that area. The MPC to a large extent determines the interest rate because the banks rely on it,” Akwaboah stated.
With businesses still navigating high operational costs, AGI argues that a reduction in the policy rate would directly translate into lower lending rates, enabling companies to invest more confidently, expand production, and ultimately lower consumer prices.
“With the improvement in the macroeconomic environment, with the improvement in the cedi…the stability we are experiencing, we also expect that policy rate will improve to reflect the interest rate so that companies can benefit, and that is the way to reduce cost of production and translate it into lower pricing for businesses. We expect a downward review all things being equal,” he added.
The business community is closely monitoring the central bank’s decision, which could signal a strategic pivot from inflation containment to growth stimulation. For AGI and its members, such a move would provide critical relief to industries still recovering from the compounded shocks of recent years, including currency depreciation, high borrowing costs, and supply chain disruptions.
