[ 2014-11-26 ]

Interest rates strangle private enterprises
Private enterprises operating in the country say
the high interest rates were negatively affecting
their operations in the country.

According to the enterprises, they are unable to
make profits to expand their businesses due to the
high interest rates .

Chief Executive Officer (CEO) of PEF, Nana
Osei-Bonsu, who disclosed this to the media in
Accra, blamed government for the situation, saying
such rates do not exist anywhere in the
sub-region.

“How viable can businesses survive with this
kind of rates? We are in a global village where we
are competing with the rest of the world and this
kind of situation puts us at a complete
disadvantage.”

As of now, interest rates in the country are
hovering around 31 percent on the average.

On November 12, 2014, the Central Bank reviewed
its monetary policy rate upwards by 200 basis
point from 19 percent to 21 percent as part of
measures to check inflation, which recorded 16.9
percent in October 2014.

Inflation stood at 16.5 percent in September 2014,
and 13.5 percent at end-December 2013.

The inflation pressures in 2014 resulted in the
sharp depreciation of the local currency against
foreign currencies, as well as fuel and utility
price adjustments.

Inflation during the first 10 months of the year
reflected significantly in the non-food inflation
than in the food inflation.

It would also be recalled that the Minister of
Trade and Industry, Dr Ekow Spio-Garbrah announced
that his outfit would embark on a crusade to bring
down high interest rates in the country.

The average interest rate on the 91-day Treasury
bill rose to 23.5 percent in September 2014 from
21.59 percent in September 2013.

However, the difference between borrowing and
lending rates declined to 14.25 percent in
September 2014.

Source - Daily Guide

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