The Ghana National Chamber of Commerce and Industry (GNCCI) is calling for a significant reduction in the Monetary Policy Rate, warning that the current high interest rate is stifling investment and economic growth.
Mark Badu Aboagye, Chief Executive Officer of the GNCCI, says the current policy rate of 28% is excessively high given the country’s inflation rate of 13.7%.
Speaking on Business Focus on July 28, Mr Badu Aboagye argued that the gap between inflation and the policy rate — a real interest rate of 14.3 percentage points — is too wide to attract the necessary investment inflows.
“If you subtract 13.7 from 28%, that’s the real interest rate, and if it’s really working, it should be sufficient to bring in the inflows. But once the inflows are not coming, it means your real interest rate is artificial,” he said.
The GNCCI is calling for a 300-basis point (3 percentage point) reduction in the policy rate to ease borrowing costs and stimulate private sector activity.
The Chamber reaffirmed its commitment to working closely with both public and private sector stakeholders to build a resilient and inclusive business environment that supports long-term, sustainable economic growth across Ghana.
The Bank of Ghana is expected to review the policy rate at its next Monetary Policy Committee (MPC) meeting, with many businesses hoping for a shift towards a more accommodative stance.
Meanwhile, the Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, opened the 125th Monetary Policy Committee (MPC) sitting on July 28.
In his opening remarks, Dr Asiama told the committee to “be aware of the risks, such as a resumption of exchange rate volatility, crude oil price increase, and the potential impact of some taxes to be imposed within the context of the mid-year budget review and how this will affect pricing behaviour.”
“This can cause a shift in inflation expectations,” he said.
He said the decline reflects multiple reinforcing factors, including disciplined monetary and fiscal policy management and the appreciation of the cedi Economic activity has picked up significantly. Provisional GDP data for the first quarter of 2025 indicate real growth of 5.3 percent, driven mainly by strong performance in agriculture and services. Non-oil GDP grew even faster at 6.8 percent. The Bank’s Composite Index of Economic Activity rose by 4.4 percent in May, supported by robust consumption, increased trade volumes, cement sales, and a rebound in tourism. These improvements are mirrored in stronger business and consumer confidence, as reflected in recent PMI data.
READ ALSO: Finance Minister unveils Volta Economic Corridor to drive 24-hour Economy
