The government’s ambitious inflation target of 11.9% for 2025 is under serious threat following recent hikes in electricity and water, according to the CEO of the Ghana National Chamber of Commerce and Industry (GNCCI).
Mark Badu Aboagye, who was speaking on the implications of the utility tariff adjustments, warned that the cumulative effect of rising utility costs and high interest rates could derail efforts to curb inflation.
The business leader emphasized that price stability cannot be achieved while production costs are simultaneously being driven higher by the upward adjustment of tariffs.
He says businesses will have no option but to increase the price of goods and services, sparking inflationary pressures that could derail the target of 11.9% for the 2025 fiscal year.
He argued that the very measures intended to stabilize the economy may, ironically, be the same forces that deepen inflationary pressures.
To him, the development is a countermeasure to the government’s efforts to contain inflation, and hence, this may cause the target for the year to be missed again, just like last year.
“It’s not the best way to fight inflation. If you want to achieve inflation of 11.9% as stated in the budget, and you are increasing policy rates and utility tariffs, then the prices of goods and services will go up,” he said.
He continued that: “Obviously, your target for inflation will not be achieved. I think that it will be extremely difficult for us to achieve the target that we have set for inflation, given that prices of goods and services are going to go up based on this increase in tariffs.”
His remarks echo growing concerns among private sector players that rising utility bills, alongside elevated Bank of Ghana policy rates, are stifling business operations and pushing consumer prices higher, creating the opposite effect of what inflation control policies intend.
