BoG makes more profit than Bank of England – Togbe Afede

According to the astute economist, the high interest rates in Ghana only enriches the central bank and the commercial banks.

“When you raise the interest rate it only rewards the banks, that is why the Ghanaian banking sector is about the most profitable in Africa, that is why the Bank of Ghana itself made about four times as much profit as the Bank of England. Bank of England presides over a 2.7 trillion economy, forty times our 70 billion economy.

“How can the Bank of Ghana make more profit than the Bank of England? They also profit from the high-interest rate so the high-interest rate does not benefit the economy, it benefits the banking system, making the Bank of Ghana profitable, making the banks very profitable, crowding out the private sector, inhibiting private sector growth, inhibiting the growth of the real sector of the economy, therefore inhibiting the creation of jobs for the teeming masses of the people,” he opined.

Togbe Afede has consistently opposed the high and increasing interest rate in Ghana, because he is of the view that it is only crowding out the private sector and also inhibiting job creation.

Speaking to journalists on the sidelines of the launch of the 53rd General Assembly of the World Trade Centres Association, on Thursday, February 9, the former Council of State member said “get inflation down, get the interest rate down and the cedi will maintain good stability against the dollar. Just keeping interest rates high will not tame inflation.

Why do I say so? In advanced countries, you raise interest rates to discourage spending, therefore, reducing demands for goods and therefore to tame pricing.

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) recently increased the policy rate to 28 percent.

This was up from the earlier rate of 27%.