The Ghana National Chamber of Commerce and Industry (GNCCI) has raised concerns over the government’s continued reliance on Treasury bills (T-bills) to finance domestic debt obligations, warning that this could have significant consequences for the private sector.
Reacting to the 2025 Budget presentation last week, GNCCI CEO Mark Badu Aboagye cautioned that the government’s heavy borrowing from the domestic market could crowd out private sector access to credit, as banks may prefer lending to the government due to the low-risk nature of T-bills.
“A major risk we identified is that a significant portion of the budget deficit will be financed locally, meaning the government will borrow more from the domestic market. This will crowd out private sector access to credit, push interest rates higher, and make it more difficult for businesses to expand,” he is quoted by thehighstreetjournal.com
Badu Aboagye also pointed out that the competition for funds between the government and businesses will likely drive up interest rates, making borrowing more expensive for entrepreneurs and industries that need capital to grow.
He advised businesses to prepare for potential liquidity constraints and rising lending costs.
SP/MA
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