According to the Chief Executive Officer of PEF the high interest rates on loans is greatly affecting their profit margins, making it difficult for them to expand and grow their businesses.
The Bank of Ghana (BoG) on 12th November,2014 increased the monetary policy rate by 200 basis point from 19 percent to 21 percent, as part of moves to tame inflation, which hit 16.9 percent in October,2014.
Minister of Trade and Industry, Dr Ekow Spio-Garbrah, on the same day pledged his Ministry’s commitment to embark on a crusade against the high interest rate regime in the country.
Interest rates in the country are currently hovering around an average of 31 percent.
Speaking to the Citi Business News Chief Executive Officer of PEF Nana Osei – Bonsu blamed government for the situation.
“How viable can businesses survive, with this kind of rate where are we going. We are in a global village competing with the rest of the world. Look within our sub-region what do we compare to the rate that we have, so our business are going to be disadvantaged. They are not going to be able to do business and compete with others and they are not going to attract investments into their businesses.”
He augured that pricing of goods and services is high because interesting rates is so high and without adding the other cost of operation alone puts the cost structure high up there even before adding profit margins and the figures alone when you look at it will not alone any business to state afloat not to talk of surviving.
“So we have to look at the holistic approach from A to Z in the value chain as this policy and this rate how did they influence competitiveness, how do they influence profitability and how do they influence government revenues. Unless we look at that then they cannot survive.”
By: Norvan Acquah – Hayford/citifmonline.com/Ghana