GNCCI Warns Ghana’s 2025 Inflation Target at Risk Due to Rising Costs and Policy Hikes

The Ghana National Chamber of Commerce and Industry (GNCCI) has raised concerns that the country’s 2025 inflation target of 11.9% may not be achievable. This warning comes in light of recent economic measures, including a significant hike in the central bank’s monetary policy rate to 28%. The GNCCI fears that such moves, alongside upcoming increases in utility tariffs, will put further strain on businesses and contribute to higher inflationary pressures.

In particular, the Chamber points to the impending utility tariff hikes scheduled for May 3, which include a 14.75% increase in electricity rates and a 4.02% rise in water tariffs. The GNCCI believes these increases will directly impact the cost of doing business in Ghana, adding to the already high production costs facing businesses. This compounded cost burden, the Chamber warns, will likely lead to price hikes, further exacerbating inflation.

Mark Badu-Aboagye, the CEO of the GNCCI, emphasized that these policy changes—while aimed at controlling inflation—are likely to have the opposite effect. He explained that the increase in the monetary policy rate and utility tariffs would raise the cost of production, which in turn could lead to higher prices across various sectors of the economy. The result, he noted, would be a significant challenge to meeting the government’s inflation target for 2025.

Despite efforts to curb inflation through higher interest rates, Badu-Aboagye argues that the combination of these price hikes would likely erode business margins and fuel further inflation. With the cost of electricity, water, and financing set to increase, the GNCCI warns that the nation may struggle to achieve its fiscal goals in the near future.

Source: Citi newsroom