News Guide Africa

Tag: Ghana National Chamber of Commerce and Industry (GNCCI)

  • The cost of survival: Navigating Ghana’s complex business landscape

    The cost of survival: Navigating Ghana’s complex business landscape

    By Adnan Adams Mohammed; Finance and Economic Journalist

    In the boardrooms of Accra and the bustling markets of Kumasi, a singular conversation dominates: the survival of the Ghanaian enterprise.

    In the wake of official macroeconomic indicators pointing toward a burgeoning recovery, the ground-level reality for many businesses remains a grueling tug-of-war between stabilizing data and stifling operational costs.

    From the exodus of local manufacturers to the struggle for capital among women entrepreneurs, Ghana’s business environment is at a critical crossroads.

    The “exodus” of local production

    The Ghana Union of Traders Association (GUTA) has sounded one of the loudest alarms. According to Joseph Paddy, Vice President of GUTA, the high cost of doing business is no longer just a balance sheet issue; it is a threat to national sovereignty in production.

    “Ghana remains one of the most expensive operating environments in the sub-region,” Paddy noted during a recent Joy Business Roundtable. The disparity is startling: while production costs in Ghana can consume 30% to 35% of revenue, neighboring Ivory Coast sees figures as low as 3% to 7%.

    The result is a worrying trend of “de-industrialization.” Paddy warned, “Traders often find it cheaper to import goods than to source them locally, even after paying duties.” He cited instances of local manufacturers shutting down machines to become importers simply to stay afloat, a move that inevitably leads to job losses.

    Structural bottlenecks vs. macro gains

    The disconnect between “headline” success and “street” reality is perhaps best explained by Mark Badu-Aboagye, CEO of the Ghana National Chamber of Commerce and Industry (GNCCI). While the government celebrates falling inflation recorded recently at 3.2% Badu-Aboagye argues that structural bottlenecks are blunting these gains.

    “The transmission mechanism takes some time, moving from the macro to the micro,” he explained. “Now you’ve done the macro, it is about time you do the micro.”

    A major point of contention is the “mismatch” between inflation and interest rates. With inflation at 3.2% but the reference rate hovering around 10%, businesses are still paying a premium for credit. “I see a mismatch in there… I want to see a very closer relationship between the inflation and the lending rate,” Badu-Aboagye stated, emphasizing that high production costs fueled by energy and transport keep prices elevated for consumers despite the central bank’s tight monetary policy.

    The capital gap: Women in business

    In Kumasi, the conversation shifts to equity and access. At the 3rd Women in Business Dialogue, stakeholders highlighted that while women represent 46% of Ghana’s entrepreneurial workforce, they remain the most underserved by formal financial structures.

    Dr. Gordon Acquaye, CEO of Business and Financial Times (B&FT), argued that funding alone isn’t the silver bullet. “Women need to be given that tool and structure from the onset… we are able to help them with bookkeeping, then the next level will be to scale up,” he noted. The upcoming Women’s Development Bank is seen as a beacon of hope, but as Regina Ofori of Ecobank emphasized, formalization remains the key: “Women can do a lot to support their businesses like registering their companies.”

    A glimmer of hope: Tax reforms and stability

    Despite the hurdles, there are signs of a policy pivot. Mary Kwarteng Darko, an Associate Director at PwC Ghana, suggests the tax regime is shifting from “aggressive” to “business-friendly.” The abolition of the Emissions Levy, E-Levy, and the COVID-19 Health Recovery Levy has provided immediate psychological and financial relief.

    “Overall sentiment is that the country is taking a more balanced approach to taxation,” Darko observed. However, she cautioned that the extension of the Growth and Sustainability Levy to 2028 creates “mixed sentiments” for long-term planning.

    From the government’s perspective, the recovery is well underway. Frederick Amissah, Technical Advisor to the Finance Minister, maintains that stability is breeding confidence. “Businesses are becoming a lot more confident. This shows the macro stability we have now is working,” he asserted.

    The path forward

    The consensus among industry players is clear: stability is a prerequisite, but it is not a destination. For the “Ghanaian Dream” of a self-reliant, industrial economy to survive, the government must move beyond managing the currency to managing the cost of a kilowatt of power and the interest on a small business loan.

    As Joseph Paddy aptly put it: “Every business grows on policy. One good policy can help a business grow.” The question remains whether those policies will arrive fast enough to keep the lights on in Ghana’s remaining factories.

     

     

     

  • GNCCI Applauds BoG’s Bold Rate Cut …presses banks to follow suit

    GNCCI Applauds BoG’s Bold Rate Cut …presses banks to follow suit

    The Ghana National Chamber of Commerce and Industry (GNCCI) has thrown its support behind the Bank of Ghana’s (BoG) decision to slash the Monetary Policy Rate from 18% to 15.5%

    The Chamber described the move as a “timely policy intervention” that signals a new era of business recovery and private sector–led growth for 2026.

    In a statement released on Thursday, January 29, 2026, the Chamber noted that this latest 250-basis-point cut brings the cumulative reduction in the policy rate to 11.5 percentage points over the last 12 months (January 2025 to January 2026).

    GNCCI President Mr. Stephane Miezan commended the Ministry of Finance and the central bank for their coordinated effort in stabilizing the economy. The Chamber attributed the steady decline in rates to prudent fiscal management and a gradual easing of the monetary tightness that has long hampered Ghanaian businesses.

    “This sustained reduction… reflects improving macroeconomic conditions and a gradual easing of monetary tightness,” the statement noted. “We encourage continuation of these efforts to rebuild business confidence.”

    The “Hidden” Costs of Credit

    Despite the celebration of the BoG’s decision, the GNCCI raised a red flag regarding the slow “transmission” of these cuts to the average borrower. The Chamber expressed deep concern that commercial banks have yet to significantly lower their lending rates, which remain prohibitively high for many.

    The GNCCI identified several “non-interest cost components” that continue to inflate the cost of credit by an additional 4% to 5%:

    ● Bank-specific risk premiums

    ● High operating costs and profit margins

    ● Processing and arrangement fees

    ● Commitment charges

    Banks Begin to Chase Borrowers

    However, the central bank sees a different side of the story. Speaking at the 128th Monetary Policy Committee (MPC) press briefing on Wednesday, January 28, the Governor of the Bank of Ghana, Dr. Johnson Asiama, revealed that the tide is beginning to turn.

    “Banks are beginning to call clients if they need loans,” the Governor disclosed, citing reports of banks offering rates as low as 15% to court reliable borrowers. Dr. Asiama described this as a positive signal of renewed liquidity and confidence within the banking system, suggesting that balance sheets are finally strengthening enough to support private-sector expansion.

    A Call to Action for Commercial Banks

    The Chamber warned that if commercial banks across the board do not align their rates with the central bank’s direction, the benefits of the rate cut will remain out of reach for many Small and Medium Enterprises (SMEs).

    To bridge this gap, the GNCCI is urging financial institutions to:

    1. Reduce non-interest charges: Lower the fees that artificially hike the cost of borrowing.

    2. Leverage risk-sharing: Utilize credit enhancement frameworks to mitigate lending risks.

    3. Support productive sectors: Focus on industries that drive job creation and long-term economic resilience.

     

     

  • Businesses, households await banks response to latest 250 bps Policy Rate cut

    Businesses, households await banks response to latest 250 bps Policy Rate cut

    By Toma Imirhe

    The Bank of Ghana again shook up financial markets last week with a 250 basis point reduction in its Monetary Policy Rate (MPR) to 15.5%, the lowest level in four years, signaling a strategic shift from inflation containment to supporting economic growth and credit expansion. The decision, announced by Dr. Johnson Pandit Asiama, Governor of the BoG, at the conclusion of the first Monetary Policy Committee (MPC) meeting for 2026, on Wednesday, January 28, reflects improving macroeconomic conditions, including a sharp decline in inflation and a strengthened external position.

    While a cut was widely expected, predictions by market analysts and commentators as to its size ranged from 100 basis points (bps) to 300 bps. The latest cut arrived at through a majority decision by MPC members is the fourth in a series of consecutive cuts in the MPR which began in late July last year and which have cumulatively lowered it by 1,250 bps from the 28% at which it stood for most of the first half of 2025.

    Announcing the decision last week, Dr. Asiama emphasized that the committee was encouraged by sustained disinflation and stable inflation expectations. He added that real interest rates remain elevated, allowing the central bank to “gradually recalibrate policy without undermining macroeconomic stability

    Analysts expect the cuts at the policy level to transmit over the coming months into lower commercial bank lending and deposit rates, though the speed and magnitude of this transmission will depend on competitive dynamics in the banking sector, risk perceptions, and broader liquidity conditions.

    Commercial banks set their own pricing based partly on the BoG’s policy signal plus risk premiums, operating costs, and desired profit margins. According to the Ghana National Chamber of Commerce and Industry (GNCCI), many lenders still maintain lending rates well above the policy rate, reflecting additional cost layers that add an estimated four or five percentage points to final borrowing rates. These costs, GNCCI argues, act as a drag on the full impact of monetary easing for businesses.

    One Accra-based banker, speaking on condition of anonymity, noted that lending rates could fall by 100–150 bps in the next two or three months as banks recalibrate pricing, but cautioned that the pace will vary by institution based on their respective costs of funds and risk appetite. “Where we’re seeing immediate softening is in short-term small and medium sized enterprise and trade finance facilities, which are now being re-priced closer to 19–20% from previous mid-20s levels,” the banker said.

    For private enterprises, especially SMEs, the initial expectation is that credit will become more affordable and accessible, supporting investment, working capital financing, and expansion plans. It is instructive that last year’s overall net 900bps cut supported a reduction of average lending rates to 20.45% from 30.25% and a rebound in real private-sector credit growth to 13.1%, up from 2.0% growth in 2024.

    “The rate cut is a timely boost for business recovery and private sector–led growth,” said an enthused GNCCI executive last week, applauding the central bank’s move but urging commercial banks to complement the policy cut with lower effective loan pricing and risk-sharing frameworks.

    However, some enterprises remain cautious. Many firms continue to face non-interest costs, collateral requirements, and high risk premiums the banking industry’s non-performing loans ratio remains elevated at 18.9% even though this is lower than the 21.8% it stood at by the end of 2024, which mean that even with an MPR at 15.5% effective borrowing costs can remain closer to 20% or more. The gap between the BoG’s benchmark rate and actual lending rates underscores the structural frictions in Ghana’s credit markets.

    On the household side, the reduction in the policy rate is expected to trickle down into lower deposit rates, though this process typically lags borrowing rate adjustments. Retail banks are likely to reduce savings and fixed-term deposit rates by 50–100 bps over the next three to six months, incentivizing consumption and potentially encouraging borrowing for mortgages, vehicle loans, and personal credit. Households holding time deposits at banks could see yields compress further as financial institutions pivot away from high-cost funding.

    Credit cards, mortgage products, and consumer loans may see a similar recalibration, albeit tempered by banks’ concerns over non-performing loans and capital adequacy. According to central bank data though, most Ghanaian banks met regulatory capital thresholds by end-December 2025 following a period of regulatory forbearance and sector cleanup, improving their capacity to expand credit.

    Several key factors will influence how commercial bank lending and deposit rates adjust.

    One is their liquidity conditions. With inflation subdued and reserves strengthened, liquidity in the banking system has improved a prerequisite for lower interest rates. Banks with excess liquidity and stable deposit bases are better positioned to pass through cuts to customers.

    Another is credit risk and non-performing loans (NPLs). Elevated NPL ratios remain a concern and so banks with large portfolios of distressed assets may be reluctant to slash lending rates aggressively until asset quality stabilizes further.

    A third determining factor is competition. Competitive pressure among mid-tier banks in particular could accelerate interest rate reductions, particularly in segments like SMEs and consumer credit where price sensitivity is high.

    Added to these will be macroeconomic expectations. If inflation remains anchored and the cedi stable, as the Bank of Ghana projects, market expectations of further rate cuts could take hold, prompting forward-looking adjustments in long-term borrowing and fixed income rates.

    Market participants widely expect that full transmission of the latest policy rate cut to most commercial loan and deposit products will take up to anywhere between two and four months, with some segments adjusting sooner, while more structurally rigid products like long-term mortgages may take more than half a year to reflect the new policy environment.

    By the end of last week, none of the commercial banks had publicly responded to the latest MPR cut with announcements of loan or deposit re-pricing, but the commencement of such announcements is anticipated over the coming weeks. .Effective policy transmission will be crucial for translating lower policy rates into tangible benefits for businesses and households alike.

     

     

     

  • Electricity tariff hike: CSOs, businesses clash over impact on consumers

    Adnan Adams Mohammed

    In an unusual situation, the Ghana National Chamber of Commerce and Industry (GNCCI) has down played fears of a potential impact of the recently announced increase in electricity tariffs on prices of goods and services.

    Their seeming support for the tariff hike follows criticism from some Civil Society Organisations against the Public Utilities Regulatory Commission (PURC) for the 2.45 percent tariff hike effective July 1, 2025, citing a lack of transparency, inadequate stakeholder engagement, and a disregard for economic indicators that should have warranted a reduction.

    The adjustment follows the Commission’s routine quarterly review. Meanwhile, water tariffs will remain unchanged for the third quarter of the year.

    In a joint statement issued last week, CUTS International Accra and the Centre for Environmental Management and Sustainable Energy (CEMSE) accused PURC of violating Section 3(c) of Act 538 of 1997, which mandates fair utility pricing for the mutual benefit of the government, producers, and end-users. However, the GNCCI CEO downplayed the potential impact of the increment, describing it as minimal.

    “What we are looking at is that if there is a further improvement in the key variables, we expect the tariffs for businesses to eventually be reduced,” Mark Badu-Aboagye said in an interview last week.

    He added: “Electricity costs per kilowatt hour in Ghana are already quite high, so an additional 2.45% increase will certainly raise production costs. However, I don’t believe this will result in a significant rise in prices.”

    Meanwhile, the CSOs argue that the proposed tariff increase is unjustified given recent improvements in Ghana’s macroeconomic conditions.

    The civil society groups cited the appreciation of the Ghanaian cedi against the US dollar and declining inflation rates both key variables in the tariff-setting formula.

    In a statement signed by the West African Regional Director of CUTS International, Appiah Kusi Adomako and the Executive Director for CEMSE, Benjamin Nsiah criticised PURC for failing to align its tariff review with current economic realities. They insist that consumers had expected a downward revision, not an increase.

    They pointed to the over 30% appreciation of the Ghanaian Cedi between the first and second quarters of 2025—from GH¢15.70 to GH¢10.31 per US dollar—which they say generated a GH¢1 billion windfall for government and utility providers. This surplus, they argued, could have been used to clear arrears or reduce consumer costs, rendering the tariff hike unjustifiable.

    The CSOs also criticised the PURC for relying on an outdated inflation rate of 20.67%, rather than the current 18.4%, noting that falling inflation lowers operational costs and should benefit consumers.

    Additionally, they described the increase in the Weighted Average Cost of Gas (WACOG) by only $0.08 (1%) as too insignificant to warrant a tariff hike. They cited a previous instance in 2024 when a 25% rise in gas costs led to only a 3.5% increase in tariffs, making the current adjustment appear economically indefensible.

    The statement further questioned the PURC’s justification of GH¢488 million in arrears, pointing out the Commission’s failure to explain how the cedi appreciation windfall was utilised. They also accused PURC of excluding stakeholders from the decision-making process, particularly in introducing fuel costs and reserve margins into the tariff without public disclosure or consultation. The CSOs noted the lack of transparency regarding the 27% fuel cost component, for which no data, simulations, or procurement details were shared.

    Warning of long-term consequences, the CSOs said continued upward tariff adjustments could entrench inefficiencies in Ghana’s power sector and unjustly burden consumers.

    “If care is not taken, PURC’s frequent upward tariff adjustments could succeed in the creation of an energy sector that is not efficient,” the statement read.

    They called on the President of Ghana to immediately halt the 2.45% tariff increase and demanded full disclosure of the tariff adjustment methodology and the assumptions that informed the Commission’s decision.