President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng says until interest rates on loans drop below the 20 percent mark, the recent reduction in the monetary policy rate will not make much difference.
The Monetary Policy Committee (MPC) of the Bank of Ghana, for the first time since March 2020, reduced the policy rate to 13.5% after it was kept unchanged at 14.5 percent for six consecutive times.
While calling for banks in the country to be responsive to the reduction in the policy rate, Dr. Obeng said businesses in the country will continue to be uncompetitive in the era of the African Continental Free Trade Area (AfCFTA) if interest rates remain high.
“I think there should be a cap of maybe six percent, within which the interest rates can be increased. So if we are talking about interest rates which are lower than 20%, something like 18% and 19%, it will be great for us as businesses and help us be competitive against other businesses. Doing business in Ghana is not competitive at all, especially in the era of the AfCFTA where others are hovering around 12% to 15%.”