Bawumia tells new BoG board to reduce interest rate

The Vice President Dr Mahamudu Bawumia has asked the newly inaugurated board of the Bank of Ghana (BoG) to ensure that Ghana’s high-interest rates reduce drastically.

He was speaking when he inaugurated the new board members of the central bank after he swore them in on Wednesday (August 9, 2017).

He argued that the continuous decline in policy rate recently must directly reflect in the lending rates of the bank.

“Your mandate is to see how the financial sector can play its responsible role crowding in the private sector to get access to credit affordably which means we have to think seriously about bringing interest rates down. We know that the Bank of Ghana has been bringing the policy rate down and as we stabilize the macro economy, bring about fiscal consolidation; better anchored inflationary expectations then you will see stability in the currency. And so while we achieve that macroeconomic stability, we expect the decline in policy rate is also transmitted to lending rates in the country among the banks.”

Ghana’s interest rate is one of the highest in the world. It has an average base rate of 26.3 percent with its policy rate at 21 percent.

Ghana together with Argentina (24.75%), Mozambique (23.25%), Gambia (23.00%), Malawi (22.00%) and Haiti (20.00%) constitute the six countries with policy rates above 20 percent.

There has been growing agitation among depositors over the past months over the high rates, as other rates – treasury bills and policy rates keep declining.

The board comprises 13 members including the Governor of BoG, Dr Ernest Addison as its Chairman.

The Governor’s two deputies Dr Maxwell Opoku Afari and Dr Johnson P Asiama are also members of the board.

Other members of the board are a Deputy Finance Minister, Charles Adu-Boahen, Mr Keli Gadzekpo, and Dr Kwame Owusu – Nyantekyi.

The rest are Dr Sr Eugenia Amporfu, Dr Samuel Nii Noi Ashong, Mr Jude Bucknor, Mr Joseph B Alhassan, Mr Andrew Boye- Doe, Dr Maria Hagan and Mrs Comfort Ocran.