The Association of Ghana Industries (AGI) views the move by the Bank of Ghana to raise the Monetary Policy Rate by 300 basis points from 19 percent to 22 percent as worrying.

The central bank made the decision after a Monetary Policy Committee meeting on Wednesday because of Ghana’s recent economic challenges.

The last change in the policy rate was in May 2022 and was maintained in July 2022.

Speaking on The Big Issue on Citi TV, the Chairman of the Greater Accra Regional branch of the Association of Ghana Industries, Tsonam Akpeloo said the move is not in the best interest of Ghanaian industries.

Mr. Akpeloo wonders what data motivated the central bank to make such a decision, considering that similar moves in the past have not yielded much results.

“The belief is that the central bank is trying to deal with the inflationary situation we are facing, so they are essentially trying to mop up excessive money in the economy. But where is the excessive money? Our feeling is that the central bank does not have the data to pursue some of these policies they are pursuing. Which data are they basing all of these decisions on?”

“Prior to the recent increase in the policy rate, there was another not long ago. We are yet to find out what benefit this brought to the country. Going ahead to increase the policy rate again, without telling us the results the previous one achieved, is not fair to us.”

“Already we are borrowing at an extremely high rate. In this era of continental free trade, we are expected to be competing with countries that have lower interest rates. That is really insensitive to our plights. Inasmuch as we appreciate that the central bank finds a need to solve the situation, this is not the best way to go about it.”

He thinks it would be better if government focuses on supporting and promoting local industries.

“Government has to be extremely intentional about policies that support and promote local industries. As we keep importing products, we are hurting our economy.”

Ghana’s economy is currently in dire straits with worsening public debt, rising inflation, skyrocketing fuel prices, and cedi depreciation, among others.

Latest figures released by the Bank of Ghana put Ghana’s total public debt stock, as of June 2022, at USS 54.4 billion or GH¢393.4 billion.