The Ghana Stock Exchange (GSE) closed higher on Wednesday, July 31, as a sharp rise in MTN Ghana’s share price and a dramatic spike in trading volumes boosted market sentiment.
The benchmark GSE Composite Index rose to 6,776.09 points, delivering a strong year-to-date return of 38.61%. Despite a marginal drop of 1.11 points in the Financial Stocks Index, which settled at 3,422.89, financial stocks still held an impressive year-to-date return of 43.77%.
Market capitalization jumped by 1.31 billion cedis to close at 143.46 billion cedis, signaling renewed investor confidence.
Trading activity recorded a significant uptick, with 3,877,672 shares traded — an 865.79% increase from the previous session. Market turnover reached 12.08 billion cedis, marking one of the most active sessions in recent months.
MTN Ghana led the market, gaining to GHC3.35 pesewas per share, and standing as the session’s only advancer. In contrast, SIC Insurance declined to 1 cedi, 05 pesewas per share.
Analysts attribute the strong market showing to continued investor appetite for telecom and insurance stocks, with expectations of sustained bullish sentiment in the near term.
In another development, Dr. Eric Boachie Yiadom, Senior Fellow at Africa Policy Lens (APL) and lecturer at the University of Professional Studies Accra (UPSA), has voiced concerns over the Bank of Ghana’s recent 300 basis points reduction in the policy rate.
He described the new rate as inadequate to resolve the high cost of credit faced by businesses.
Speaking to 3business on July 30, he argued that the policy rate should be closer to 20 percent rather than the current 25 percent to effectively stimulate economic activity.
He questioned the rationale behind maintaining such a rate when the economy is showing signs of improvement.
According to Dr. Boachie, “the high policy rate inflates the cost of credit for businesses, leading to expensive sourcing of materials and higher production costs.”
This supply-side pressure, he warned, “could sustain inflation despite improvements on the demand side”. Furthermore, he noted that the high credit cost limits consumer purchasing power, potentially stalling market growth.
“He urged the Bank of Ghana Governor to consider lowering the policy rate further to stimulate both demand and production, arguing that increased credit availability would lead to more affordable goods and services rather than driving inflation up. Dr. Boachie pointed out that compared to regional peers like Nigeria—with inflation at around 22% and a policy rate of 27.5%—Ghana’s 25% rate with a lower inflation rate of approximately 13.4% appears disproportionately restrictive.
Highlighting the economic consequences, Dr. Boachie said the current approach threatens key sectors such as manufacturing, which has seen growth decline to 3.4%, and warned that continued high borrowing.
