The Ghana National Chamber of Commerce and Industry (GNCCI) has expressed concerns that the inflation target of 11.9 percent set for the end of 2025, as stated in the national budget, is unlikely to be met.
The Chamber highlights that the recent increase in the monetary policy rate to 28%, along with forthcoming adjustments in utility tariffs—specifically a 14.75% rise in electricity rates and a 4.02% increase in water tariffs effective May 3—will further strain the cost of conducting business.
Mark Badu-Aboagye, the Chief Executive Officer of GNCCI, said the cumulative effects of these policy changes could diminish profit margins for businesses and intensify inflationary pressures, complicating the achievement of the budgetary target.
“The overall consequence is a rise in production costs. With the policy rate now at 28%, interest rates will inevitably increase. Additionally, the hikes in electricity and water tariffs by 14.75% and 4.02% respectively contribute to direct costs that are unavoidable.
“These factors will inevitably lead to higher prices. When considering the 2025 budget, which aims for an inflation rate of 11.9%, achieving this target seems exceedingly challenging given these increases. Likely, we will not meet this goal, as prices are set to rise, resulting in a higher inflation rate.
“While there is an intention to control inflation through the increase in the policy rate, the rise in tariffs will likely counteract these efforts and lead to an escalation in inflation,” he stated.
