The Agbogbomefia of the Asogli State and President of the National House of Chiefs, Togbe Afede XIV, has lamented the state of Ghana’s monetary policy administration which he says makes it difficult for local business to thrive.
“I have not met anybody who disputed the fact that our interest rates have been too high,” he said on The Point of View on Citi TV.
“If you adjust the yields on our money markets for depreciation, the real return is still very high. And we expect businesses to mobilise money and industrialise this economy?”
Because of the state of affair, Togbe Afede contended that, the idea of Ghanaians investing money in agriculture “will just not happen.”
“The interest rates we have in this market make it almost impossible to do business profitably. That is why you look around and most of the companies are collapsing. It is hard to find Ghanaian companies that are 50 years old.”
In contrast, he noted that “the foreign-owned companies are able to borrow from abroad” at favourable rates to invest in Ghana.
The monetary policy determines the interest rate payable for borrowing.
The Bank of Ghana cut its base lending rate by 1.5 percentage points to 14.5 percent in March 2020.
This was the first drop in 14 months.
It said the move was to stimulate spending in the Ghanaian economy and increase money supply.
The Monetary Policy Committee (MPC) of the Bank of Ghana maintained the policy rate at 14.5 percent in September 2020 citing an improved outlook to growth and inflation.
The central bank also attributed the verdict to disruptions in the economy triggered largely by the COVID-19 pandemic.
In the last five years, the rate has stood at 16 percent in 2019, 17 percent in 2018, 20 percent in 2017, 25.5 percent in 2016 and 26 percent in 2015.