Vice President Dr. Mahamadu Bawumia has made a strong case for an improved savings culture and financial inclusion to help reduce interest rates the country.
Ghanaians must inculcate in them a better savings habits to promote financial inclusion which is crucial in reducing interest rates says the Vice President of Ghana, Dr Mahammadu Bawumiah.
Referencing from the experiences of notable world economies, he highlighted how a better savings culture would help decrease the cost of credit.
Addressing participants at the 5th Economic Outlook and Business Strategy Conference in Accra, he said, ‘‘if you have more savings in your financial system, then you would have more investment in the economy. More investment means more growth, more growth means lower unemployment and less poverty’’
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The Vice President also believes, “the whole issue of interest rates and how we bring it down sustainably has a direct relationship with financial inclusion. If you have an economy where 60-70 percent of your population are excluded from the financial system, structurally you should expect higher interest rates, other things being equal’’.
Dr Bawumia pointed out that "the structure of the economy will deliver higher interest rates, so financial inclusion and bringing down interest rates are actually quite linked".
Government policies and removal of VAT on financial services
He reaffirmed government’s commitment to improving the business environment saying “government of Nana Akufo-Addo is pro-business and we have made it a point that we want to build the most business-friendly economy in Africa."
"We are therefore keen on developing the financial sector to deepen financial inclusion and bring more Ghanaians out of extreme poverty."
This was very influential in the President’s decision to repeal the 17.5 percent Value Added Tax (VAT) on financial services.