Ecobank Transnational Incorporated (ETI) has questioned how realistic the fight against high interest rates in the country will be.
According to the bank’s CEO Albert Essien “with all due respect to my honorable Spio Garbrah, if the reference rate at the central bank , is at 25% or there about , why will you lend below that , people forget that the commercial bank is also a player in the economy”, he stressed.
The Minister of Trade and Industry Dr Ekow Spio Garbrah has vowed to ensure a reduction in the interest rates of banks after the business community lamented how it was crippling their operations.
According to him ‘we will be declaring a war on high interest rates, everybody, beginning from January first. so we are giving the banks notice, so they can begin taking appropriate measures. We are tired of structurally high interest rates’.
Ghana has one of the highest interest rates in the world, average rates are hovering around 35 percent.
The bank of Ghana’s policy rate which bank’s use to determine their base rate was increased to 21% from 19% on 12th November, 2014.
Speaking to Citi Business News on the sidelines of the “facts behind the figures ” programme organized by the Ghana Stock Exchange , Mr. Essien said ,”if the 91 day treasury bill rate is at that rate why would you lend below that , so I don’t know. I think the minister was saying something I’m not aware of”.
The Managing Director of Pro Credit Sarah Tsien Zetterli earlier warned government against its quest to ensure the reduction of interest rates of banks in the country.
According to her government must first guarantee an enabling environment for Small and Medium Scale Institutions by ensuring reliable supply of electricity and basic infrastructure.
” I would caution all of us in our war on interest rates,…let’s talk about exactly what the interest rate is , it is the cost of my product , plus the risk margin and a little bit of profit”, she said.
By: Rabiu Alhassan/citifmonline.com/Ghana
