Despite the steady easing of inflation and stabilising cedi, businesses in Ghana continue to grapple with the high cost of borrowing, a pressure that many say is fast becoming untenable. For the Ghana National Chamber of Commerce and Industry (GNCCI), this is the right moment for decisive monetary policy relief.
As the Bank of Ghana prepares for its next Monetary Policy Committee (MPC) meeting from July 28 to 30, the Chamber is predicting, and urging, a significant policy rate reduction of at least 3 percentage points. According to the Chamber, the country’s macroeconomic indicators now offer a compelling case for a shift towards a more accommodative stance, especially to support businesses still reeling from years of elevated financing costs.
“In our own assessment, the policy rate should come down by at least 3%,” said GNCCI Chief Executive Officer, Mark Badu-Aboagye, in an interview with The High Street Journal. “Inflation has come down significantly, the cedi has stabilised, and foreign reserves are healthy. It is time to see meaningful relief for businesses facing extremely high lending rates.”
The Bank of Ghana’s policy rate currently sits at 28%, even as headline inflation fell to 13.7% in June, less than half its level just a few months ago. With inflation easing and exchange rate pressures abating, GNCCI argues the time is ripe for the central bank to help lower the cost of credit by loosening its monetary policy stance.
Still, the Chamber acknowledges that the impact of a rate cut may not be immediate. Mr. Badu-Aboagye explained that many businesses remain locked into expensive credit arrangements, and banks typically take time to adjust their lending rates even when the policy rate changes. “There’s always a lag effect,” he noted. “But a strong signal from the Bank of Ghana can start to change expectations and gradually bring relief.”
Beyond interest rates, the Chamber also pointed to other structural cost burdens that it says continue to constrain the private sector, including high taxes, rising production inputs, and the threat of new levies. Mr. Badu-Aboagye cited concerns over the proposed One Cedi per litre levy on fuel, warning that it could offset recent gains from declining fuel prices and further squeeze business margins.
As policymakers gather for what could be one of the most closely watched MPC meetings this year, GNCCI is calling for a broader rethink of economic management, one that goes beyond just inflation targeting to deliberately foster growth, investment, and job creation.
