President Addo Dankwa Akufo-Addo has raised concerns over the high-interest rates in the country warning it jeopardizes the cost of doing business in the country.
CAL Bank Managing Director fights Ghana’s President, Akufo Addo’s proposal to reduce interest rates, here’s why
The outgoing Chief Executive Officer of CAL Bank, Frank Adu Jnr, has predicted dark times for Ghana’s banking sector should government legislate the lower interest rates the president directed.
He, hence, directed the Bank of Ghana Governor, Dr Addison to take a second look at rate.
But Mr Adu Jnr explained that a cap on interest rates could spike up rates beyond the recent levels of 15 to 25 per cent.
He said this while speaking at Cal Bank's Fact Behind the Figures forum.
“You cannot cap interest rates. From a political perspective, you can attempt but you will pay the price. If interest rates are high, it is not the doing of banks. Banks do not manage an economy. Interest rates reflect the economy that you have created. We can attempt that…as they did in Kenya and see what happens,” he said.
Adding that “We’ve seen it in this country before– credit ceilings, interest rate cups – we paid a price eventually there was a blow-out, interest rates went out to 42-46 per cent. Good management of the economy will drive what interest rates will do. High-interest rates are not the doing of the banks in any circumstance.”
The CEO, who retires on December 31, further argued that despite the clean-up in the banking sector and pegging of the policy rate to 16 per cent, the banking sector still responds to inefficient regulatory and legal frameworks that sometimes impede retrieval of securities.
Mr Philip Owiredu will assume the Chief Executive Officer position on 1st January 2020, following the retirement of Mr Adu Jr.
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