Ghana’s President Nana Addo Dankwa Akufo-Addo has expressed concern over high interest rate despite efforts by government to bring it down to a acceptable level.
He said the situation is hindering access to finance to local companies.
President Akufo Addo stated this when a delegation from the International Finance Corporation paid a courtesy call on him at the Jubilee House in Accra.
The President wants interest rate which stands at 15 point two percent to single digit.
He said despite the many advancements and changes made in strengthening the banking sector, one major problem that still prevails is the high rates at which banks lend.
Those changes, however, in the President’s view have not proven sufficient at the moment “for us to sit back and say that now we have created a situation where the financing sector can be really autonomous and independent.
“There is the need for some involved engagement to find out how this particular hurdle can be overcome because with the changes that have been made…the interest rates in Ghana are still relatively high,” President Akufo-Addo said.
This double-digit rate for President Akufo-Addo does not auger well for the private sector.
He believes the World Bank officials and the Central Bank of Ghana can put their heads together in bringing interest rate to a single digit.
“The entrepreneurial capacity and capabilities of Ghanaians is no longer an issue but where does the entrepreneur turn to for the 50, 100, 200,000-dollar initial support from the bank?” he queried.
In his view, the microfinance institutions are no longer viable alternatives because they are “taking not just an arm and a leg but both arms and legs in terms of the rates of interests that they are charging
“Sitting back and watching what is going on in the economy, I believe that this is the single most important breakthrough we can make is for interest rates to be brought to accessible levels.”
He said his government inherited weak and fragile banking sector hence the need to sanitize the sector.
The leader of the delegation and Vice President of IFC, Hans Peter Lanks spoke about measures to bring down interest rate.