President tells banks to reduce lending rates now
President Nana Addo Dankwa Akufo-Addo, Wednesday, urged the banks to reduce their lending and interest rates to allow small and medium enterprises that depend on loans to thrive in the domestic commercial competition.
The President said though the inflation rate had declined to 10.3 per cent as at January 2018; and there had been a growing improvement in the macro economy; while the 91-day treasury bill-rate had fallen from 16.4 per cent in 2016 to 13.4 per cent: the banking lending rate to the private sector had remained stubbornly high.
This averaged between 31.7 per cent and 29.2 per cent within the same period, he noted, emphasing that, “The gap between what is happening with the decline in inflation and the rates being charged by banks is a gap we have to bridge.”
President Akufo-Addo, who was speaking at the commissioning of the $60 million EcoBank Head Office Building, in Accra, on Wednesday, stated that there should be a collective determination to turn the country’s economy around to bring progress and prosperity to the people.
The Office building, which covers a 27000 square meter area, has a 14- floor block of corporate offices, board and meeting rooms, staff training and executive dining areas and a rooftop executive cocktail lounge, among others.
The President emphasised that the lending rates to the private sector must come down; and this must be done as a matter of urgency, to complement to the achievements of his Government.
“What we need now is to churn a new path for the future,” he explained.
Dr Ernest Addison, the Governor of the Bank of Ghana (BoG) said, to realise the ‘Ghana Beyond Aid’ agenda, the financial institutions had a stake in championing that transformational agenda.
He said Ghana was now considered one of the growing economies to do business with, and the Government was creating opportunities for the private sector to grow and develop, thereby creating jobs for the people.
“The Financial sector needs to be strong and re-position itself to support the private sector in its continuous growth,” he said.
The BoG, he said, was currently transiting from the capital measurement framework to a risk-based capital requirement.
He said the collapse of many institutions elsewhere, and the recent collapse of the two banks in Ghana, had a lot to do with bad corporate governance structures.
The BoG, he said, therefore, would intensify its supervisory and regulatory activities of the financial industry to ensure its integrity and efficiency and also ensure that the benefits of liberalisation and competitiveness in the industry were realised.