- The Paramount Chief of Asogli Area is concerned about the high interest rates
- Togbe Afede XIV wonders why Ghana's interest rates are higher than that of the UK
- The Volta-based chief says the Bank of Ghana is to blame
Togbe Afede XIV, the Paramount Chief of the Asogli Traditional Area, has blamed the Bank of Ghana for the high lending rates in the country.
He said the Bank of Ghana has lost focus, competing with the banks for profits, instead of contributing to the macro-economic objectives of stability, growth and employment creation.
According to him, the government cannot take the blame for the high cost of credit in the country.
“The scapegoat has always been government borrowing, the high indebtedness of government. But I don’t think that is where all the problem”, he disclosed this when he paid a courtesy call on the Speaker of Parliament, Alban Bagbin.
“The UK’s debt to GDP ratio is about 104%. Ghana’s is 81%. Relatively, we are better. The per capita indebtedness of the UK is $42,000, ours is $1,400. Compared to income per capita, we are much better. Our income per capita is $2,300 that of the UK is $40,000. So UK’s debt per capita, $42,000, is higher than income per capita, $40,000. Our debt per capita $1,400, is much less than our income per capita, $2,300”, the renowned Paramount Chief said.
He again asked “now, how do the high interest rates help in managing the economy when the high interest the banks charge is not even shared with depositors?”, .
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“So the banks are making incredible amount of money from the high interest rate environment at the expense of the people, industry, the private sector, the government, and at the expense of our growth. Why do we have to set interest rates so high?”
He noted that the arguments he made in 2003, which led to President Kufuor appointing him to the Board of Bank of Ghana, are still relevant today.
Togbe Afede XIV continued saying “the most important, of course, is to ensure better planning and management of our economy, and this, coincidentally, is what has brought you here. For now, I want to focus on our monetary policy. That is one segment of policy that has received the least scrutiny. Not since 2003 when I complained about monetary policy in this country has there been any open debate about how monetary policy has been conducted.”
Togbe Afede XIV concluded saying he wants the best for the country, and as such it’s about time the Bank of Ghana Act is reviewed and go for a separation between chairmanship and governorship.