President Nana Addo Dankwa Akufo-Addo has appealed to banks to reduce their interest rates so as to compliment the efforts being made by his government to create a more stable macro-economic framework in the country.
According to President Akufo-Addo, the first year of his administration has witnessed fiscal discipline being maintained, with fiscal deficit reducing from 9.3% in 2016 to 5.6% in 2017. The projection, this year, he said, is that fiscal deficit will reduce to 4.5%.
“We have seen inflation decline from 15.6% in 2016 to 11.8% in 2017, and, now, at the end of January, 10.3%. The Monetary Policy Rate has also been falling from 25.5% in 2016 and now stands at 20%. The 91-day Treasury bill rate has also been falling from 16.4% in 2016 and now stands at 13.4%,” the President said.
However, President Akufo-Addo noted that banking lending rates still remained high, averaging between 31.7% and 29.3% within the same period.
“The gap between what is happening to the decline in inflation, and the lending rates being charged by the private sector, is a gap we have to bridge. And, if we are to give substantial complement to the vision that we all share, as a Ghana free and globally competitive economy, my challenge to you is to complement the efforts of my government, which is creating a more stable macro-economic framework, by bringing down lending rate,” he said.
The President continued, “I have said that I am in a hurry. I am in a hurry because the Ghanaian people are also in a hurry to see an improvement in the quality of their lives and, therefore, if we are ready to give an impetuous to the private sector in our country, lending rates must come down. And they need to come down as a matter of urgency.”
President Akufo-Addo made this known on Wednesday, 7th March, 2018, when he commissioned the $60 million new Ghana Head Office of Ecobank, in Accra.
The President stated that a strong commitment from a bank like Ecobank, “a leading bank in our country”, to tackle the anomaly of high bank lending rates “would be a very good signal to the others”.
He noted that a reduction in lending rates “would be the way we can grow our private sector, and enable it to create jobs and with all the other linkages, to grow into an enhancement of our general prosperity. So my challenge is for you to look at reducing lending rate as quickly as possible.”
President Akufo-Addo assured that a positive response to his appeal from banks would ensure that “I will definitely lend my voice to an improved banking culture that ensures that people pay back their loans.”
The President congratulated the promoters, the management and Board of Directors of EcoBank for the tremendous strides that have made over the years, typified by this new Ghana Head Office.
He noted that even though the Ecobank is a major pan African bank, the Ghanaian entity is the most profitable within the pan African context.