Deloitte West Africa has commended the Monetary Policy Committee (MPC) of the Bank of Ghana for maintaining the policy rate at 27%, emphasizing its potential to anchor inflation expectations despite ongoing short-term pressures.
In its latest economic brief on the Monetary Policy Rate (MPR) in Ghana and Nigeria, the professional services firm highlighted that the decision would bolster the cedi’s recovery and ensure external sector stability. Deloitte also noted that an unchanged policy rate could enhance both business and consumer confidence.
The MPC explained its rationale for maintaining the 27.0% rate, citing slightly elevated inflation levels despite a rebound in the Ghana cedi’s stability and a steady domestic economy.
Deloitte expressed optimism about the policy rate’s role in supporting economic growth and curbing inflationary pressures. Looking ahead, the firm forecasted improved economic performance for Ghana, driven by rising business confidence and increased economic activity.
Additionally, Deloitte anticipated that the strengthening of the local currency would contribute to further price stabilization.
Nigeria: Higher Fuel Prices Drive MPR Increase
In Nigeria, the MPC raised the MPR to 27.50%, marking the sixth increase since January 2024, as inflationary pressures persist. Deloitte attributed this hike to concerns over higher fuel prices, which have significantly impacted production and distribution costs, as well as sustained exchange rate pressures and elevated core inflation.
The firm cautioned that these factors could lead to reduced disposable income, tighter money supply, constrained credit access, higher borrowing costs, and an increase in loan defaults.
Despite these challenges, Deloitte remained confident in the resilience of Nigeria’s banking system, noting its ability to weather both external and internal macroeconomic impediments.
