Work to bring down interest rates …President directs BoG
President Akufo-Addo has directed the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, to cross-examine the issue of high-interest rates in the country.
He has also tasked Dr. Ernest Addison to figure out how the problem could be curtailed in the nearest possible period. “I’ve requested the Governor to interrogate the issue of high interest rates in Ghana, and how the problem could be addressed to enhance the competitiveness of the private sector,” he noted.
President Akufo-Addo said this at the Chief Executive Officers (CEOs) Executive Forum, held in Accra yesterday.
It would be recalled that the President, on several platforms, has lamented the killer interest rates charged by banks in the country. A few of these instances are when he opened the Headquarters of Ecobank, Standard Chartered Bank, and Calbank, all in Accra.
In July this year, President Akufo-Addo, in a meeting with officials from the International Finance Corporation (IFC), said a single-digit interest rate would be the “single most decisive breakthrough for the private sector.”
At that meeting, he bemoaned how the private sector, which is looking forward to loans, would be able to thrive with double digits inflation.
At yesterday’s meeting with the CEOs, President Akufo-Addo indicated the reforms put in place by the Central Bank to solidify the sector, which was not only under-capitalized, but many of their activities were characterized by fraudulent transactions, as a result of poor management practices in several banks, as well as weak oversight by the Central Bank were appropriate.
“In the halfway stage of 2019, according to the Bank of Ghana, the banking sector, after the reforms, recorded a profit after tax of GH¢1.67 billion, representing year-on-year growth of 36.3%, compared to 21.7% in the same period last year,” he asserted.
The President told the gathering of CEOs of key private and public sectors that the government recognizes that macroeconomic stability is necessary, but not a sufficient condition for economic transformation.
In this regard, the government embarked on a comprehensive programme for industrial transformation based on ten pillars, which include the ‘One District, One Factory’ initiative, the stimulus package for distressed companies.
Explaining the need for the meeting, the Minister for Trade and Industry, Alan Kyerematen, expressed with regret, how many African countries, including Ghana, have no institutionalized process for long-term engagement between the government, public sector institutions, and private sector operators.
He, however, added that in Ghana, there have been some attempts to create a forum for such consultative engagements between government and the private sector, which, he said, were not enough.
“So, we decided, under the leadership of the President, to create this new public-private dialogue mechanism, which has a number of critical features,” he mentioned.
The maiden event saw the President respond to some concerns of the private sector, through the CEOs who made it to the meeting.