The Ghana National Chamber of Commerce and Industry (GNCCI) has cast doubts on the government’s ability to achieve its 2025 inflation target of 11.9%, describing it as overly ambitious given current economic conditions.
Mark Badu Aboagye, CEO of the GNCCI, acknowledged that reducing inflation is crucial for business stability and consumer confidence. However, he argued that the challenges witnessed in 2024—including persistently high lending rates and food price instability—make the target difficult to attain without stronger policy interventions.
“We have seen how inflation has remained stubbornly high due to structural challenges in food production, fuel price volatility, and high interest rates. The government is projecting 11.9% by the end of 2025, but the real question is: What specific policies are in place to achieve this?” he questioned.
Ghana’s inflation rate stood at 23.8% as of December 2024, significantly above the government’s end-of-year target. While the finance minister, Dr. Cassiel Ato Forson, expressed confidence in a downward trajectory, Mr. Badu Aboagye believes achieving 11.9% requires aggressive reforms, particularly in stabilizing food prices and reducing the cost of credit for businesses.
He pointed out that lending rates, currently averaging 27%, remain prohibitively high, limiting investment and increasing the cost of doing business.
“When businesses borrow at such high rates, production costs increase, and those costs are passed on to consumers, fueling inflation. Until we address this issue, inflation will not decline as projected,” he noted.
Another major concern, he said, is food price instability, which continues to be a primary driver of inflation. He stressed the need for a clear agricultural policy focused on boosting local food production, reducing post-harvest losses, and enhancing food distribution systems to prevent price shocks.
Beyond food inflation, Mr. Badu Aboagye also warned that fuel price volatility remains a key risk factor that could undermine the government’s inflation target. With global oil price fluctuations and the depreciation of the cedi, transport costs could continue rising, exerting further pressure on inflation.
“The cost of fuel affects everything, from transportation to production and logistics. We need a sustainable policy to manage these price movements, or we risk missing the inflation target again,” he cautioned.
While the GNCCI supports efforts to bring inflation under control, it is urging the government to outline concrete steps to address these challenges rather than relying on projections.
“We need a holistic strategy—one that tackles lending rates, stabilizes food prices, and ensures predictable fuel costs. Without this, 11.9% inflation will remain an optimistic target rather than a realistic one,” he concluded.
