BoG flags proposed utility tariff hikes as risk to inflation, policy rate outlook

The Bank of Ghana (BoG) has cautioned that proposed utility tariff hikes could significantly influence its next policy rate decision, as the central bank weighs risks to the country’s disinflation progress.

Utility providers have requested increases of more than 200 percent for both water and electricity tariffs, raising fears that the adjustments could derail recent gains in taming inflation.

Consumer inflation slowed to 11.5 percent in August, falling below the government’s year-end target of 11.9 percent. This improvement, supported by cedi stability and fiscal consolidation, prompted the Monetary Policy Committee (MPC) in July to slash the policy rate by 300 basis points to 25 percent.

At the opening of the MPC’s 126th meeting on Monday, Governor Dr. Johnson Asiama highlighted encouraging fiscal indicators, including a deficit of 0.7 percent of GDP in the first half of the year and a mid-year decline in the public debt ratio.

But he warned that global trade uncertainties and the looming tariff hikes remain key risks:

“Our commitment remains firm: maintain price stability, safeguard financial stability, and create the conditions for inclusive, sustainable growth,” Dr. Asiama said.

The MPC is expected to announce its latest decision on the benchmark lending rate at a press briefing on Wednesday, September 17, 2025.