Amid the significant cut in the monetary policy rate by the MPC of the Bank of Ghana, an economist at Pentecost University, Dr. Paul Appiah Konadu, says the decision is more than just a monetary policy maneuver; it’s a golden opportunity to reset Ghana’s investment priorities.
Although the business community, such as GUTA and the GNCCI, is lauding the 300-basis-point slash, the economist sees the development as a catalyst that can transform the country’s agricultural and industrial sectors.
Welcoming the move by the MPC, Dr. Appiah Konadu tells The High Street Journal that the country has done remarkably well in achieving macroeconomic stability. Per his assessment, the indicators are showing resilience.
“We are achieving stability. The cedi is gaining strength. Inflation is coming down. So the key microeconomic indicators are pointing to macroeconomic stability and even showing some resilience,” Dr. Konadu told The High Street Journal in an exclusive interview.
This stability in the indicators, he says, must not just end on paper, but must translate into real gains in the economy.
After months of belt-tightening, fiscal clean-up, and IMF-led reforms, Ghana’s economy is beginning to show early signs of recovery. The cedi has steadied, inflation has declined to its lowest in over two years, and foreign reserves are ticking upward. For Dr. Konadu, these are not just positive statistics; they’re signals for action.
The policy rate cut is a great opportunity for the real sectors of the economy to be stimulated. In his view, it is time for agricultural mechanization and a boost in industrialization since the policy rate offers room for less costly credit.
He points to the agriculture sector as a prime beneficiary. The cost of acquiring equipment and processing machines has fallen, creating fertile ground for agro-processing, value addition, and food security initiatives.
“This is a time to encourage investments in the economy, for instance, import substitution industrialisation. Now, in cedi terms import of machinery has become relatively cheaper. So this is a time to take advantage of the agriculture sector imports machines to support agro processing, and if interest rates are high, it is difficult to unlock such a kind of investment, especially credit-funded investments,” he championed.
Dr. Konadu argues that the rate cut is not just necessary, it is strategic. By lowering the cost of credit, the Bank of Ghana is giving investors the signal that now is the time to move.
The economist acknowledges that every policy rate cut comes with risks, especially in emerging markets where inflation can return uninvited. But he is confident that the current macroeconomic environment can absorb the stimulus without sparking a fresh wave of price increases if the investments are directed towards productive sectors.
