The Bank of Ghana Headquaters Togbe Afede XIV blames central bank for high-interest rates
Bank of Ghana keeps policy rate at 14.5 percent
There is a gap disparity between lending rates and monetary policy rate, Economists
The Research Department of Bank of Ghana has responded to assertions made by Togbe Afede XIV , Paramount Chief of the Asogli Traditional Area, blaming the central bank for the high spate of interest rates in the country.
Togbe Afede XIV , according to a MyJoyonline report published on November 26 this year indicated the Bank of Ghana has lost focus as it was competing with the banks for profits, instead of contributing to the macro-economic objectives of stability, growth and employment creation.
“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.
“So relatively, the UK is more indebted than Ghana, yet the rate at which the Bank of England lends to banks currently is 0.1%, while Bank of Ghana lends to our banks at 13.5%. That is a whopping one hundred and thirty-five times the Bank of England rate! Astonishing!!”, he added.
Continuing, he said “the UK GDP, which reflects the size of the economy, is $2.7trillion, almost 40 times the size of our economy, which is $72billion (GDP). But guess what? Bank of England made a profit of £57million ($76million) in 2020/21, down from £72million ($96million) in 2019/20. Bank of Ghana , on the other hand, made a profit of GHS1.57billion ($270million) in 2020, down from GHS1.8billion ($310million) in 2019. The question is, doing what?!”
“Yes, that is the benefit from their 13.5% lending rate. Mr. Speaker, this is where the problem has been, but we don’t seem to know. Bank of Ghana has lost focus, competing with the banks for profits, instead […]
