- Macro Stability Is Back but Business Costs Remain Too High – GCCI Chief Says
Ghana’s improving macroeconomic indicators may be masking the depth of cost pressures still facing businesses, with firms continuing to struggle under high borrowing costs and weak competitiveness despite a more stable economic environment, according to Mark Badu-Aboagye, Chief Executive Officer of the Ghana National Chamber of Commerce and Industry.
Mr Badu-Aboagye acknowledged that the recent improvement in inflation, interest rates and exchange rate stability reflects deliberate policy coordination.
But he warned that the recovery remains uneven, particularly for businesses that rely on affordable credit to expand production, improve productivity and compete in regional and international markets.
“For businesses, stability is very critical for everything that we do,” he said, pointing to “positive and significant improvement in the macroeconomic indicators” driven by tighter alignment between fiscal and monetary policy.
Inflation has declined sharply to 13.2 per cent, while the policy rate has been cut from 28 per cent to 14 per cent a shift Mr Badu-Aboagye described as requiring “a high level of commitment.” He also cited favourable external conditions as contributing to the stabilisation process.
However, he cautioned that lower inflation and easing monetary policy have not yet translated into sufficiently affordable financing for businesses.
“Interest rate is coming down, but we still think that it’s very high,” he said.
The concern goes to the heart of Ghana’s real-sector recovery challenge. While macroeconomic stabilisation has improved sentiment, businesses continue to face high effective lending rates, elevated operating costs and intense competition from imports and regional producers.
Mr Badu-Aboagye said Ghanaian firms are not operating in isolation. Many produce not only for the domestic market but also for export markets, where they compete with goods from economies that offer producers significantly cheaper credit.
“We don’t produce only for Ghana; we produce for external markets. We are competing with products coming from other regions,” he said.
He drew comparisons with francophone West African peers, where policy rates are around 13.2 per cent, arguing that Ghana’s effective lending rates, hovering around 17.5 per cent, remain a constraint on productivity and export competitiveness.
For manufacturers, traders and service providers, the cost of capital is not a technical monetary policy issue. It determines whether firms can retool, restock, hire, invest in technology, expand distribution or compete with imported goods.
Mr Badu-Aboagye also questioned the alignment between key financial benchmarks, particularly the Ghana Reference Rate and inflation.
“If you have the reference rate around 10 to 11 per cent and inflation at 13.2 per cent, I still see a mismatch,” he said, calling for a “closer relationship between inflation and the lending rate” to ensure credit pricing better reflects underlying macroeconomic conditions.
He further highlighted the central role of the exchange rate in shaping recent economic gains, describing currency stability as “very significant” in influencing the broader outlook for firms.
The cedi’s relative stability has helped reduce uncertainty in pricing, import planning and inventory management. But for many firms, the exchange rate gain must be matched by lower financing costs, improved infrastructure, stable utility pricing and stronger consumer demand before the recovery can be considered fully real-sector driven.
Mr Badu-Aboagye’s intervention adds to a recurring theme in Ghana’s recovery narrative: macroeconomic stabilisation is necessary, but it is not sufficient.
Inflation may be falling, the policy rate may be easing and the exchange rate may be calmer, but businesses will judge the recovery by the cost of credit, the strength of demand, the ability to compete and the confidence to invest.
For the Ghana National Chamber of Commerce and Industry, bridging that gap is now the central policy test. Until borrowing costs fall more decisively and competitiveness improves relative to regional peers, Ghana’s recovery risks remaining more visible in official data than in day-to-day business activity.
