The president, Nana Addo Dankwa Akufo-Addo, wants measures put in place to reduce interest rates to a 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.

He was speaking to a delegation from the international financial corporation a division of the World Bank that called on him at the Jubilee House.

On 19 July, the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) kept its key policy rate unchanged at a five-year low of 16.00%. The decision marked the third consecutive hold following January’s unexpected cut. 

Many businesses and individuals had hoped that this would have reflected in the interest rates charged by banks. But that has not been the case.

The Summary of Economic and Financial data of the central bank shows that the average lending rate of banks is now pegged at 27.8% as of February this year, after falling to 26.9% in December last year from the 29.3% recorded in February 2018.

This double-digit rate for President Akufo-Addo does not auger well for the private sector.

He believes the World Bank officials and the BoG can put their heads together to address the issue.

“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.”