By Kingsley Webora TANKEH

The CEO of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, has called for the Bank of Ghana to significantly reduce its benchmark interest rate, aiming to bring it down to 20% by the end of the year. He cited stable inflation forecasts and overall economic steadiness as reasons behind this request.

He claimed that the present 25 percent tax rate hinders business expansion and increases inflationary trends even though there have been some reductions recently.

At the unveiling of GhanaFest Europe ’25 in Accra, Mr. Badu-Aboagye stated that the effects of interest rate reductions take time but are crucial for sustained economic balance.

“On average, it takes about two years before it influences other macroeconomic indicators, particularly inflation,” he stated, addressing concerns that an aggressive change in the interest rate might undo previous progress.

“The lower inflation we are experiencing today stems from the interest rate increases implemented several years ago,” he further stated.

He argued that lowering the benchmark interest rate by 500 basis points to 20 percent would take “approximately three-quarters” of a year to influence inflation, yet would instantly “boost our economy and create robust production capabilities essential for curbing inflation.”

He stressed, ‘I do not believe they should maintain the policy rate at a very high level.’ ‘We have the capacity to relax monetary policy in order to support fiscal measures affecting the everyday economy.’

The Monetary Policy Committee of the Bank of Ghana (BoG) implemented an unusual reduction in the benchmark interest rate by 300 basis points during its meeting in July, lowering it from 28% to 25%. While commendable—being the largest decrease since September 2024, when it reduced the rate by 200 basis points—the private sector continues to face high borrowing costs.

As a result, they expect additional reductions to enhance availability of financial resources as inflation remains sharply declining. Inflation has been decreasing since the start of the year, dropping from 23.5 percent measured in January to 12.1 percent in July 2025.

Nevertheless, borrowing costs stayed high — with the Ghana Reference Rate (GRR) staying close to 23.80 percent for various types of loans. As per the most recent Annualised Percentage Rate (APR) figures released by the Bank of Ghana, significant differences exist among different borrower groups and loan terms. In fact, families have better access to lower interest rates compared to small and medium-sized businesses.

Certain financial institutions provide APRs approximately at 20 percent for specific loan terms, whereas some impose fees surpassing 40 percent. Small and Medium Enterprises encounter elevated minimum interest rates — even the most favorable one-year business loans carry charges over 17 percent, and mid-term financing frequently goes beyond 30 percent.

Mr. Badu-Aboagye highlighted that lower interest rates are essential for Ghanaians companies facing challenges due to increased U.S. tariffs and looking to expand into European and other African markets.

“From the perspective of the situation, a 3 percent decrease is quite significant — yet a 25 percent interest rate remains elevated,” he expressed concern. He challenged the central bank’s cautious approach, stating that despite strong economic conditions, they justify additional relaxation of the BoG rate.

He argues that the ongoing drop in inflation, robust reserves, and strengthened cedi provide flexibility. “This presents a significant chance for the central bank to also relax monetary policy,” he stated.

He emphasized that current elevated interest rates hinder companies from growing their activities and funding entry into new markets essential for reducing reliance on exports affected by U.S. tariffs, which he noted influences employment opportunities.

Continuing to question the idea that cutting rates would boost inflation, he contended that a significant portion of Ghana’s inflation is “cost-driven.” Elevated interest rates significantly raise production expenses. “Lowering the interest rate implies reducing the cost of production too. Consequently, inflation should decrease.”

Mr. Badu-Aboagye is additionally advocating for Ghanaians to redirect their export focus towards Europe, capitalizing on GhanaFest Europe ’25 amid increased U.S. tariffs. He believes this transition—moving past conventional products such as cocoa, gold, and petroleum—will open up chances for innovation, expansion, development, and employment creation. Nonetheless, achieving this will necessitate investments from small and medium enterprises—which might be supported through reduced loan interest rates.

He conveyed the Chamber’s dedication to aiding Ghanaian small and medium enterprises in reaching new markets and expanding. “There is significant emphasis on exporting and gaining entry into markets… this is the foundation we’re building. I would strongly advise the business sector to work together with GNCCI to tap into European markets.”

Reiterating the call for a shift towards Europe, the General Manager of the Ghana-Netherlands Business and Cultural Council (GNBCC), Ms. Hilde Famaey, issued an invitation to Ghanaian companies and government representatives: “Leverage GhanaFest Europe ’25 not only to display goods, but also to introduce viable investment initiatives. Arrive ready; the GNBCC stands ready to serve as your link to Dutch funding, innovation, and know-how.” She described the October gathering as a “carefully designed entry point” to highlight Ghana’s promise for Dutch enterprises.

The head of Diaspora Relations within the President’s office, Mr. Kofi Okyere Darko, emphasized that GhanaFest Europe ’25 serves as “a platform to enhance mutual trade and investments,” utilizing Ghana’s closeness to Europe along with the EU’s Economic Partnership Agreement, particularly benefiting areas such as farming, medicine, information technology, and transportation.

The GhanaFest Europe ’25 event, hosted by RAM Media Concepts together with the Royal Dutch Embassy, will be held at the Amare Conference Center in The Hague from October 23 to 25, 2025. This fair features various activities such as business-to-business discussions, an exposition, a durbar ceremony, visual arts showcase, cultural presentations, musical performances, fashion displays, and culinary experiences.

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