He said a reduction in the interest rates would allow small businesses to borrow and to start up or expand their businesses, thereby creating jobs and putting money in the pockets of Ghanaians.
“Interest rates in Ghana are very ridiculous and make it virtually impossible for local businesses to compete favourably with foreign companies,” Kennedy Agyapong said.
He attributed the high rates to the high cost of operations and operational inefficiencies, bad debts, inadequate collateral, and generally high lending risks in the country.
He indicated that most commercial banks added their profit margins to the loans they gave out, which ended up raising the interest rates.
“Many businesses have been complaining about this,” he noted, adding that the high-interest rates were the reason most Ghanaian companies would rather import finished goods, instead of producing them locally.
The Bank of Ghana raised its main interest rate by 200 basis points to 19% to curb inflationary pressures and promote macroeconomic stability.
The policy rate is the rate at which the BoG lends to commercial banks in the country and serves as the benchmark interest rate for onward lending to businesses.
In March, the Bank of Ghana raised its policy rate by 250 basis points to 17% – the largest hike in its history – to stem runaway inflation in one of West Africa’s more prosperous nations as the government cut spending to reduce the budget deficit and save a sliding local currency.
