The Ghana National Chamber of Commerce and Industry (GNCCI) has cautioned that Ghana’s 2025 end-period inflation target of 11.9 percent, as outlined in the national budget, is unlikely to be achieved.
According to the Chamber, the recent monetary policy rate hike to 28%, coupled with the impending utility tariff adjustments which is a 14.75% increase in electricity rates and a 4.02% hike in water tariffs effective May 3 will exert additional pressure on the cost of doing business.
GNCCI Chief Executive Officer, Mark Badu-Aboagye, tells Citi Business News that the cumulative impact of these policy moves could erode business margins and stoke inflationary pressures, making the budget target difficult to meet.
“The combined effects of this is that you are going to have a high cost of production. Policy rate has gone up to 28% which means interest rate will go up. Electricity and water have also gone up by 14.75% and 4.02%. They all add up to direct cost and there is nothing you can do about it.
“All these things will lead to an increase in prices. As a country if you look at the 2025 budget, we have a target of 11.9% for inflation. If you want to achieve that target which in my opinion will be extremely difficult without this increment, it means that we are not likely to achieve that because prices are going to go up and it is going to translate into a higher level of inflation.
“Much as they will want to control inflation by increasing policy rate, this increment in tariff will rather reverse the process and cause inflation to go up,” he said.
