THE Ghana Union of Traders Association (GUTA) has expressed strong reservations over the slow response of commercial banks to respond positively to the Bank of Ghana’s cut of policy rates from 15.5 per cent to 14 per cent.
The association said instead of commercial banks responding to such a decline in policy rate, they had kept their lending rates between 22 and 24 per cent.
Such a high lending rate, it said, barred the private sector from borrowing to expand their businesses and create job opportunities for the youth.
It, therefore, appealed to the central bank to prevail on commercial banks to reduce their lending rates to reflect the current monetary policy.
We need single-digit rates
Speaking during an engagement with the Minority Caucus in Accra today, the President of GUTA, Clement Boateng, said the retention of double-digit lending rates was not the best for businesses.
“If you talk about some countries in the sub-region, Cote d’Ivoire has a single lending of about six per cent and Senegal is lending 8.4 per cent.
“In West Africa, Ghana, after Nigeria, is the second biggest economy and I do not see why countries such as Cote d’Ivoire and Senegal are in the single digit and Ghana’s commercial banks continue to lend at a double digit,” he said.
The Caucus, led by the Minority Leader, Alexander Afenyo-Markin, met the leadership of GUTA to learn first-hand challenges facing them and solicit their views on how the government could improve the economy.
Improved economic indices
Mr Boateng commended the government for working hard to improve macroeconomic indices.
He said today, microeconomic indices such as policy rate and inflation were all pointing to a positive direction.
He said the police rate, which used to be 15.5 per cent yesterday, had been slashed by 100 basis points to 14 per cent.
He, however, expressed reservation at the refusal of commercial banks to respond by reducing their lending rates.
He said that once the policy rate kept reducing, the business community expected a corresponding decrease in the lending rate, saying that the current prevailing situation was not the best.
“We all know that the public sector currently employs just over a million people and all the employment in this country is generated by the private sector.
“And if the private sector wants to expand their businesses, they need to get a capital injection for them to be able to expand and then create employment.
Positive inflation
On inflation, Mr Boateng also commended the government for bringing inflation down to 3.3 per cent.
With inflation having a direct bearing on goods and services, he said low inflation offered the consumer value for money.
He, therefore, appealed to the government to double its efforts to reduce inflation further and reduce the prices of goods and services.
Consultation process
Responding, Mr Afenyo-Markin said they were there to listen to the concerns of GUTA and its members to enable the New Patriotic Party and its flagbearer, Dr Mahamudu Bawumia, to frame up a policy for his leadership.
He said as part of the party’s consultation process, Dr Bawumia directed the Caucus to engage stakeholders to hear their views, which would be incorporated in the broader policy decisions of the party that would form part of its manifesto.
“So, be assured that when it comes to my manifesto, and not to make it, it was of our forebears who pushed us that the parties should face the electors with their written social contracts,” he said.
Source:
www.graphic.com.gh