- Businesses Need Stability More Than Cheaper Credit as Inflation Risks Persist – Joe Jackson
Ghana’s economic recovery has become resilient enough to absorb temporary shocks, but policymakers must prioritise price stability over cheaper borrowing costs until inflation risks become clearer, Chief Executive Officer of Dalex Finance, Mr Joe Jackson, has said.
Speaking during a NorvanReports and Economic Governance Platform X Space discussion on Ghana’s inflation outlook and the strength of the ongoing economic recovery, Mr Jackson said the country had made progress in restoring macroeconomic stability, but warned that the recovery remained vulnerable to renewed price pressures.
He described Ghana’s economy as “resilient, but not yet robust,” arguing that while recent improvements in inflation, exchange-rate stability and market confidence were encouraging, the country was not yet in a position to treat fresh shocks lightly.
“A resilient economy can survive shocks. A robust economy hardly notices them. Ghana has become more resilient, but we are still working towards becoming robust,” he said.
His comments come at a time when Ghana’s inflation has begun turning upward after months of sharp decline. The shift has reopened debate over whether the Bank of Ghana should continue easing monetary policy or pause further rate cuts to assess whether the latest price pressures are temporary or likely to persist.
Mr Jackson urged businesses and households to moderate their expectations, stressing that a decline in inflation does not mean prices are falling. Rather, it means the pace at which prices are increasing has slowed.
“When inflation declines, prices do not fall. They simply stop rising as quickly,” he said.
That distinction, he noted, is important for public understanding of the recovery. Many households continue to feel pressure from high living costs despite lower inflation numbers, while businesses still face elevated input costs, utility costs, transport costs and financing constraints.
According to Mr Jackson, the next six months will be critical in determining whether Ghana’s recent inflation gains can be preserved. He identified two major risks that could reignite price pressures: worsening geopolitical tensions affecting global oil supplies and weather-related disruptions linked to the El Niño phenomenon.
He warned that instability in global oil markets could feed into domestic fuel prices, transport fares and general inflation, especially in an import-dependent economy where petroleum prices influence business costs and household expenditure.
He also pointed to the risk of adverse weather conditions, saying excessive rainfall could damage agricultural production across Ghana and neighbouring countries, putting renewed pressure on food prices.
“Too much rain can be just as damaging as too little rain. We should monitor weather conditions just as closely as global oil markets,” he said.
Food prices remain one of the most sensitive components of Ghana’s inflation basket. Any disruption to local food supply, transport routes or regional food flows could weaken recent gains in inflation control and place renewed pressure on household budgets.
Mr Jackson said this is why the current policy environment requires caution rather than aggressive easing.
He called for continued fiscal and monetary discipline, warning that any relaxation could quickly undermine investor confidence and reverse the stability achieved over the past year.
“Everyone is watching government expenditure like a hawk. The fiscal discipline that has brought us this far must continue,” he said.
His warning places government spending at the centre of the inflation debate. While monetary policy can help anchor expectations, excessive public expenditure, weak revenue control or renewed fiscal slippages could increase liquidity pressures, weaken confidence and complicate the central bank’s inflation management.
On monetary policy, Mr Jackson argued that the Bank of Ghana should resist calls for an immediate reduction in the policy rate. He said the current environment demands patience, especially as inflation has started edging upward.
According to him, businesses value predictability and stable market conditions more than rapid reductions in interest rates.
“What businesses need is stability, not necessarily lower interest rates. Stable prices and stable markets are what encourage investment,” he said.
The comment challenges the common argument that lower interest rates should automatically follow falling inflation. While cheaper credit can support business expansion, Mr Jackson suggested that premature rate cuts could send the wrong signal to markets if inflationary pressures are not yet fully understood.
“The real debate is no longer whether to cut rates. At this point, we should wait for more data. The worst thing would be to cut too early,” he said.
His position is likely to feed into ongoing discussions ahead of the Bank of Ghana’s next Monetary Policy Committee decision. The central bank has already reduced the policy rate significantly this year, but the recent upward movement in inflation has raised questions about whether further easing would be appropriate.
For businesses, the policy choice is delicate. Lower interest rates could reduce borrowing costs and support investment, but renewed inflation would hurt planning, raise input costs, weaken consumer purchasing power and potentially increase exchange-rate pressure.
Mr Jackson said the more important objective is to preserve macroeconomic credibility.
Stable prices, predictable policy, disciplined public spending and confidence in the direction of the economy, he argued, are more valuable to businesses than a quick reduction in borrowing costs that could later prove unsustainable.
His comments also reflect the painful memory of Ghana’s recent high-inflation period, when businesses struggled with rising costs, volatile prices, weak consumer demand and uncertainty in financial markets.
“The economy still remembers the pain of high inflation. There is enough resilience for now, but the best course is to wait, watch the data and preserve stability,” he said.
The NorvanReports and Economic Governance Platform discussion examined whether Ghana’s recovery is strong enough to withstand fresh price pressures as inflation begins to rise again.
For Mr Jackson, the answer is that Ghana has gained some resilience, but not enough to justify complacency.
The policy lesson, he argued, is clear: the country must avoid sacrificing stability for short-term relief. The recovery may be improving, but it still needs protection from premature fiscal or monetary looseness.
As the Bank of Ghana prepares for its next policy decision, the central question will be whether the latest inflation increase is a temporary adjustment or the start of a more persistent trend.
Until that answer becomes clearer, Mr Jackson believes the safest course is caution.
For businesses, that may mean waiting longer for cheaper credit. But for the broader economy, he said, the greater prize is stability.
