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    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

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    Fuel shortage: New policy to ensure direct delivery of fuel products underway – NPA

    Current high inflation rate not an isolated event – Seth Terkper

    Ghana needs more entrepreneurs to check imported inflation – Finance Minister

    Fuel prices to rise marginally in second pricing window of May – IES

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    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

    Fuel prices to rise marginally in second pricing window of May – IES

    Gov’t to put measures in place to reduce ‘imported inflation’ – Ofori-Atta

    Businesses will pass on increased cost of production from high utility tariffs – GNCCI

    KIC and Mastercard Foundation launch Agri-MSMEs acceleration program

    Benjamin Dzoboku appointed as new Managing Director for Republic Bank Ghana Plc

    Gov’t to launch national airline to benefit from AfCFTA – Hassan Tampuli

    Accra Brewery PLC launches thematic campaign dubbed ‘Taste no yɛ Deep’

    BoG reiterates calls for public to report unapproved banking charges

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    1.5% E-Levy rate will negatively impact GH¢6.9 billion target – Prof. Quartey

    Transactions to be affected by E-levy

    Bethniel Finance emerges winner in Innovation Challenge Program

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    Greater, more diverse participation in global trade is key to achieving Africa’s economic transformation – World Bank

    Seth Terkper advises against e-levy; urges government to run to IMF

    AfCFTA members conclude negotiations on rules of origin to enhance free trade

    Implement strategies to sustain increased consumer preference for digital payments – Bawumia

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    The seven factors driving high cost of living in Ghana

    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

    Over 120,000 persons reimbursed for wrongful e-levy deductions – GRA

    Fuel shortage: New policy to ensure direct delivery of fuel products underway – NPA

    Current high inflation rate not an isolated event – Seth Terkper

    Ghana needs more entrepreneurs to check imported inflation – Finance Minister

    Fuel prices to rise marginally in second pricing window of May – IES

    Samuel Dubik Mahama appointed ECG Managing Director

    Gov’t to put measures in place to reduce ‘imported inflation’ – Ofori-Atta

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    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

    Fuel prices to rise marginally in second pricing window of May – IES

    Gov’t to put measures in place to reduce ‘imported inflation’ – Ofori-Atta

    Businesses will pass on increased cost of production from high utility tariffs – GNCCI

    KIC and Mastercard Foundation launch Agri-MSMEs acceleration program

    Benjamin Dzoboku appointed as new Managing Director for Republic Bank Ghana Plc

    Gov’t to launch national airline to benefit from AfCFTA – Hassan Tampuli

    Accra Brewery PLC launches thematic campaign dubbed ‘Taste no yɛ Deep’

    BoG reiterates calls for public to report unapproved banking charges

  • TECHNOLOGY

    Government to invest heavily in internet safety – Ursula pledges

    Ho Node Hub rebrands as Node Eight

    Elon Musk strikes deal to buy Twitter for $44bn

    Block chain’s success will depend on supportive policy environment – Prof. Quaynor

    1.5% E-Levy rate will negatively impact GH¢6.9 billion target – Prof. Quartey

    Transactions to be affected by E-levy

    Bethniel Finance emerges winner in Innovation Challenge Program

    Taxing of non-resident e-commerce entities in Ghana could push prices up – Technology Consultant

    BoG cautions against fraudulent money-doubling scheme ‘BitCash Currency Exchange’

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    Standard of cars assembled in Ghana will not be compromised – GSA assures

    GUTA urges gov’t to get other countries to open their borders to facilitate trade

    Kyle Kelhofer appointed as IFC Senior Country Manager for Benin, Ghana, Liberia, Sierra Leone, and Togo

    Greater, more diverse participation in global trade is key to achieving Africa’s economic transformation – World Bank

    Seth Terkper advises against e-levy; urges government to run to IMF

    AfCFTA members conclude negotiations on rules of origin to enhance free trade

    Implement strategies to sustain increased consumer preference for digital payments – Bawumia

    Strict enforcement of AfCFTA regulatory framework will ensure smooth implementation of PAPSS – Bawumia 

    President of Cote d’Ivoire Alassane Ouattara meets Eni’s CEO Claudio Descalzi

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Zimbabwe: Banks Fleece Borrowers

bycitibusinessnews
October 5, 2016
in Africa, Southern Africa
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BANKS in Zimbabwe could still be fleecing borrowers through a litany of charges and the high cost of loans, despite the central bank putting a cap on lending rates; findings from the draft national competitiveness report have shown. The report says borrowers could be paying effective interest rates on bank loans in excess of 24 percent annually made up of the lending rates, establishment fees and insurance costs.”This makes borrowing in Zimbabwe very costly, with actual cost of borrowing in excess of 24 percent per annum,” the report says. Banks charge up to 6 percent annually on balances. The study confirmed earlier assertions that the high cost of funding is among a cocktail of factors making it difficult to do business in Zimbabwe and rendering it unattractive to investors.

In terms of the interest rate framework put in place by the Reserve Bank of Zimbabwe, banks may charge interest of up to 18 percent per annum on loans, excluding other loan charges.

Lending rates may, however, vary and may be as low as 8 percent per year depending on the class of the borrower and risk.

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The findings are part of a study on national competitiveness, which was carried out by the National Economic Consultative Forum, instructed and funded by the Ministry of Finance and Economic Development and its development partners.

The study concluded that even the most profitable companies in Zimbabwe may not earn returns enough to cover the cost of such punitive borrowing from the local banks.

“This cost directly affects the demand for bank loans and subsequently on how goods and services are priced in the economy.”

While Kenya and Zambia were found to also have high lending rates, standing at 18,08 percent and 19,5 percent respectively compared to Botswana (7,5 percent) and Mauritius (8,5 percent), interest rates in Zimbabwe are regarded too steep for a country that uses stronger currency, US dollar.

“Zimbabwe’s costs are in real terms compared to comparator countries whose interest rates are charged in local currencies whose value to the dollar fluctuates with any changes to the exchange rates,” the draft report by NECF noted.

The high lending rates are attributed to poor credit of the country (credit rating institutions), lack of investment vehicles in Zimbabwe (Government bonds), the political risk attached to the country, levels of Non-Performing Loans (higher than in the region) and problems with the collateral mechanism.

Generally, factors often cited for hindering business viability in Zimbabwe are high cost of borrowing, tight liquidity, outdated technology, use of old plant and machinery, declining agriculture output, low aggregate demand, electrical power outages and competition from cheap imports.

Government has since broadly responded to some of the issues constraining investors through policy reforms aimed at improving the ease of doing business environment to attract investment, which would address factors at micro level.

–

Credit: All Africa

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