President Nana Akufo-Addo has charged the new board of the Bank of Ghana to interrogate the issue of high interest rates in the country.

According to the President, a low interest rate for businesses in the country is critical for ensuring that Ghanaian businesses become and stay competitive.

The President made the remarks at the swearing ceremony of the new board of the Central Bank last Friday.

Membership of the board
The Governing Board of the Bank of Ghana is responsible for formulating policies for the achievement of the Bank’s objectives.

The new Board is chaired by Dr. Ernest Addison, Governor of the Bank of Ghana.

The members include Dr. Maxwell Opoku-Afari, First Deputy Governor of the Bank of Ghana, Mrs. Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana, Mr. Charles Kofi Adu Boahen, Minister of State at the Ministry of Finance.

The other members are Dr. Kwame Owusu-Nyantekyi, Dr. Samuel Nii-Noi Ashong, Mr. Jude Kofi Bucknor, Mr. Joseph Blignam Alhassan, Mr. Andrew Adinorte Boye-Doe, Mrs. Comfort Ocran, Dr. Regina Adutwum, Ms. Angela Kyerematen-Jimoh and Professor Eric Osei Assibey.

While congratulating the new board, President Akufo-Addo bemoaned the gap between the Central Bank’s Monetary policy rate and average interest rates of commercial banks.

“Let me use this occasion to urge the Bank to interrogate the issue of high interest rates in Ghana, and how the problem should be addressed to enhance the competitiveness of the private sector. It is surely not right that the Central Bank’s MPR stands at 13.5% while the commercial banks lend to the private sector at rates of 21% and above.”

“This is a gap we have to bridge if we are to realize the vision of a Ghana whose economy is globally competitive. I believe the Bank of Ghana is best placed to lead this process of reflection and action,” he added.

The Monetary Policy Rate has dropped from 14.5% to 13.5% in the past 12 months, while the average lending rate has dropped from 21.95% to 20.61% within the same period, a development that has created disquiet among different business associations.

The President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng had earlier accused banks in the country of running a cartel arrangement that keeps interest rates high despite reductions in the monetary policy rate.

According to him, the lack of responsiveness of banks, when it comes to reacting to changes in the policy rate, leaves much to be desired.

“As a matter of fact, if the policy rate can go down even further, it will be great. The most important thing, however, is for the banks to be responsive. I would say that the gap between the policy rate and interest rates is still high. The current system is a rip-off. I’m beginning to be convinced there is some kind of cartel arrangement between the banks because this shouldn’t be happening in a competitive environment.”

“So we will call on the Bank of Ghana or the government to find a way to introduce a base cap or make some compelling arrangements that will make the banks come along,” he added.