AGI Warns 15.5% Policy Rate Could Undermine 24-Hour Economy
By Praisebell Rosemond Larbi
The Association of Ghana Industries (AGI) has urged the Bank of Ghana (BoG) to pursue deeper cuts in the monetary policy rate, cautioning that the current 15.5 percent benchmark could stifle private sector expansion and slow the implementation of the newly passed 24-Hour Economy Authority law.
Although the recent reduction in the policy rate has been welcomed by industry, AGI argues that borrowing costs remain prohibitively high for businesses expected to scale operations and run round-the-clock production under the new framework.
According to the Association, commercial lending rates remain close to 20 percent in cedi terms, limiting firms’ ability to invest in machinery, technology, and working capital required to sustain continuous production cycles.
Speaking in a media interview, AGI Greater Accra Regional Chairman, Tsonam Akpeloo, acknowledged the progress made but described the current rate as uncompetitive compared to other African economies.
“Currently, the policy rate is about 15.5%. That is great, but it’s still one of the highest in the world. We are really looking forward to seeing a day when we can borrow at 8%, as it happens in Ethiopia, or 10% as you get on the streets of Johannesburg. Yes, it is relatively better, but overall, you can only access facilities at about 20% in Ghana today, in cedi terms,” he said.
Mr. Akpeloo stressed that Ghanaian businesses now compete beyond domestic borders, particularly under the African Continental Free Trade Area (AfCFTA), making interest rate competitiveness a regional concern.
“You’re competing not only with companies within Ghana, but with every company in the African region. The issue of policy rate and borrowing costs is no longer local, it’s continental. Our focus is benchmarking our rates against what you see in Kenya or Egypt,” he noted.
AGI maintains that with inflation moderating and macroeconomic stability gradually improving, the central bank has scope to adopt a more growth-supportive monetary stance. The Association believes that more aggressive rate cuts would lower financing costs, boost industrial productivity, and enhance Ghana’s export competitiveness.
Industry leaders argue that the success of the 24-Hour Economy hinges not only on legislation and infrastructure, but also on affordable capital. Without accessible and reasonably priced credit, firms may struggle to expand shifts, upgrade equipment, or meet increased energy and labour demands.
AGI therefore called for continued dialogue between policymakers and industry stakeholders to ensure that monetary policy aligns with Ghana’s industrial transformation and job creation agenda.
