Increment in policy rate will not control inflation; businesses will rather suffer – GNCCI

The Ghana National Chamber of Commerce and Industry(GNCCI) has opposed claims by the Bank of Ghana(BoG) that the hike in the policy rate is to control inflation and liquidity in the system.

The chamber contends that the method adopted by BoG to tame inflation is not effective as inflation rather keeps increasing.

It insists that the 30% policy rate will complicate the current challenges facing the industry and result in a further shutdown of businesses.

Speaking in an interview, the Chief Executive Officer of the GNCCI, Mark Badu-Aboagye, indicated that if the government continues to impose taxes, controlling inflation will be difficult.

“If you continue to increase the tariffs, this monetary policy will not work. Food inflation is very high, and we are not getting food. Monetary policy will not work. Is not more money in the pocket of people chasing fewer goods, is a supply-side constraint”.

“Food is not there. Producers are producing at a higher cost and will translate to higher prices leading to inflation”, he added.

He argued that the monetary policy has not been effective in controlling inflation and thus cannot solve the country’s soaring inflation.

“Monetary Policy has not been effective, and I have said it and am going to say they can continue to increase monetary policy, but it’s not going to solve the inflation that we have”.

The country’s inflation rate went up marginally for the second month running to 42.5% in June 2023, from 42.2% in May and well above the central bank’s target band of 6% to 10%.