MP Kennedy Agyapong of Assin Central has urged commercial banks to lower interest rates in order to boost economic activity.
“Ghana’s interest rates are really ludicrous, making it almost hard for local enterprises to compete favorably with international ones,” he stated.
In a meeting with students of KNUST’s School of Business in Kumasi on Tuesday, Mr Agyapong urged them to take use of the opportunities that are available to them.
Accompanied by the Kumasi Business Incubator and the School of Business, this event was dubbed “Practitioners’ engagement on entrepreneurial competencies,” and it was designed to help students understand some of the talents and attributes they need to succeed as entrepreneurs.
For the most part, commercial banks add their profit margins to the interest rates they charge on loans they give out, resulting in higher interest rates, according to Mr Agyapong.
According to him, “Many firms have been grumbling about this.” He said, “It’s because of the high financing rates that most Ghanaian companies choose to import completed items, rather than produce them at home,”
Bank of the Future
For the Development Bank of Ghana (DBG), Mr. Agyapong asked the institution to engage directly with companies and not transfer funds from the DBG to commercial banks for onward lending.
It would be preferable for the DBG to lend money directly to the private sector rather than via commercial banks, he added.
It would be impossible for the DBG to fulfill its goal of providing inexpensive loans to the private sector if it had to use a third party, he said.