THE Chief Executive Officer (CEO) of the Ghana National Chamber of Commerce and Industry (GNCCI), Mr Mark Badu-Aboagye, has asked the Bank of Ghana (BoG) to change the method used in determining interest rates in the country.
The change, he said, was needed to ensure that businesses benefited from the consistent drop in the Bank of Ghana’s policy rate.
He mentioned that until the mechanism for calculating interest rate was adjusted, it would take some time for a downward change in particular in the policy rate to impact directly on interest rates in the country.
Mr Badu-Aboagye, who said this in an interview with the Graphic Business on Tuesday, January 23 in Accra, noted that BoG’s decision to maintain the policy rate at 20 per cent would not have any direct impact on businesses.
“So we want the central bank to go beyond just reducing or increasing the policy rate and re-examine the mechanisms to which the policy rate will affect the interest rates charged by the banks,” he said.
He explained that businesses did not borrow from the central banks and therefore a reduction in policy rates, if not translated into a decline in interest rate by commercial banks, would not have any positive impact on businesses.
He said the business community was not surprised by the central bank’s decision to maintain the policy rate at 20 per cent, following other variables such as inflation.
“We have the interest rates reducing from 25.5 per cent to 20 per cent last year yet the interest rates remain between 30 and 35 per cent.”
He mentioned that a reduction in the interest rates would enable the private sector to access affordable credit in order to expand, employ more people and generally contribute to the overall economic growth of the country.
He said the developments within the macroeconomy were sending positive signals to the business community and commended the government for its economic policy direction which had culminated in the relative stability within the economy.