The Ghana National Chamber of Commerce and Industry (GNCCI) has welcomed the Bank of Ghana’s (BoG) basis points reduction in the monetary policy rate to 18% following the investment-led recovery at the domestic and international fronts.

The Central Bank on Monday, March 26, 2018 announced that it has reduced the policy rate by 200 basis points after concluding its Monetary Policy Committee (MPC) meetings for the quarter.

The Governor of the Bank of Ghana, Dr. Ernest Addison subsequently mentioned among other things that the decision was arrived at following indications that other variables point to the central bank’s ability to meet the annual inflation target.

This, the GNCCI believes will make businesses have access to cheap credit to grow and develop.

“SMEs and start-ups are encouraged by low rates to increase their level of investments over a certain period of time. It is for this reason that the chamber gladly welcomes the Bank of Ghana’s 200 basis points reduction in the monetary policy rate to 18%.”

The chamber at a press briefing Thursday afternoon stated that the lagged effect of the reduction in the monetary policy rate, which reflects the cost of banking and efficiency in the banking sector is a major concern to the private sector.

It further noted that “Ghana has the highest banking lending rate of 35.5% in Africa which is second to Brazil which has 55.06% in the world according to Trading Economics.”

According to the chamber, businesses are compelled to access short-term credit with high interest rates for long-term investment.

“We cannot continue undermining the competitiveness of these businesses and eroding their profits with high interest rates” the chamber states.