The debate on high lending rates will not vanish anytime soon, as President Nana Akufo-Addo has tasked the newly constituted Board of the Bank of Ghana to work around the clock and bring down the cost of credit in the country.

Cost of borrowing is very high in Ghana and places the nation among countries in Sub-Saharan Africa with expensive lending rates.

Inaugurating the reconstituted Governing Board of the Central Bank, President Akufo-Addo said it’s not right for the spread between lending rates and the policy rate of the Bank of Ghana to remain high.

“I’ll use this occasion to bring into focus a matter of great importance for the rapid growth of our economy, that is to urge the banks to interrogate the issue of high interest rates in Ghana and how the problem should be addressed to enhance the competitiveness of the private sector.”

“It is surely not right that the Central Bank’s monetary policy rate stands at 13.5%, whilst the commercial banks lend to the private sector at rates of 21% and above. This is a gap we have to breach if we are to realize the vision of Ghana whose economy is globally competitive. I believe the Bank of Ghana is best place to lead this process of reflection and action”, the President pointed out.

Governor of the Bank of Ghana, Dr. Ernest Addison on his part pledged the Central Bank’s commitment to pursue prudent monetary policies to consolidate the gains chalked so far.

“Given the rich and diverse background of the team on the board, there is no doubt on my mind that together we can build a solid foundation that has been laid by our predecessors and take this institution to even greater height”.

“I look forward to good cooperation and interesting deliberations on some of the critical issues concerning the economy especially what you [ President Akufo-Addo] have identified this evening in terms of the spread of the interest rate of the commercial banks over the policy rate”, Dr. Addison said.

“Once again I will like to say a big thank you for the trust you’ve reposed in us. The Board of the Central Bank is up to task of implementing sound policies to ensure stability, supported by a safe, sound, efficient and stable market financial system”, the Governor added.

The Board is chaired by Dr. Ernest Addison, Governor of the Bank of Ghana, with members including Dr. Maxwell Opoku-Afari, First Deputy Governor of the Bank of Ghana; Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana and Charles Kofi Adu Boahen, Minister of State at the Ministry of Finance.

The other members are Dr. Kwame Owusu-Nyantekyi, Dr. Samuel Nii-Noi Ashong, Jude Kofi Bucknor, Joseph Blignam Alhassan, Andrew Adinorte Boye-Doe, Comfort Ocran, Dr. Regina Adutwum, Angela Kyerematen-Jimoh and Professor
Eric Osei Assibey.

BoG cuts policy rate to 13.50% in May 2021

The Bank of Ghana cut its policy rate to 13.50% in May this year.

Though average lending rates have dropped from the high 29% in 2016  to about 20.5% in 2021, it’s still considered high on the African continent.