President of Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng has called on the Bank of Ghana to take a second look at the rate at which it keeps increasing the prime rate.
His call comes after an announcement by the Bank of Ghana increasing the Monetary Policy rate to 28 percent.
This is because the increases have been negatively affecting businesses as the cost of doing business keeps increasing which consequently affects the prices of goods and services.
Dr. Obeng said the increase in the prime rate will make goods manufactured in the country expensive and uncompetitive given the implementation of the African Continental Free Trade Agreement (AfCFTA).
” What it means is that leading rates are going to go up. Already we are in the neighborhood of about 40 percent per any borrowed capital but now we are going to go up. It means that we are going to be rendered uncompetitive in the subregion, especially in the wake of the AfCFTA, we are almost out. goods and services is going to go up again unnecessarily and it’s going to push up inflation.
If the cost of doing business goes up, businesses are going to transfer the cost to the consuming public. Anytime, they push the rate up, prices also go up. It means they are using the wrong method.
They have to diagnose the problem well for us to have a proper solution rather than what we are going,” Dr. Obeng noted.
