Vice President Dr Mahamadu Bawumia has charged the Bank of Ghana (BoG) to work hard to bring down interest rates to sustainable levels.
He made the call when he recently swore in a newly constituted 13-member board of the BoG in Accra.
Dr Bawumia said the basic function of the board is to assist the bank to pursue its core mandate of price stability in the context of its independence as an institution.
The new board members are Dr Ernest Addison, Dr Maxwell Opoku-Afari, Dr Johnson Asiama, Charles Adu-Boahen, Dr Eugenia Amporfu, Keli Gadzekpo, Dr Kwame Owusu-Nyantekyi, Dr Samuel Nii Noi Ashong, Jude Kofi Bucknor, Joseph Alhassan, Andrew Boye-Doe, Dr Maria Hagan and Comfort Ocran.
According to the Vice President, it was the expectation of President Akufo-Addo that the Board and the bank would not only focus on price stability but look at the growth of the country’s economy as well.
“Your mandate is to see how the financial sector can play its responsible role; crowding in the private sector to get access to credit affordably which means that we have to really think seriously about bringing interest rates down,” he said.
He continued “we know that the Bank of Ghana (BoG) has been bringing the policy rates down and as we stabilize the macro economy, bring about fiscal consolidation, better anchor inflationary expectations, then you will see stability in the currency and so on.”
While the country achieves that macroeconomic stability, Dr Bawumia, who happens to be a former Deputy Governor of the Bank of Ghana said, “We expect the decline in the policy rate to also be transmitted to lending rates in the country amongst the banks even though a lot of elements go into the pricing of credit in this country.
“But there are certain things that government will have to do which we are going to do; like putting in place a national ID system that together with the national digital address system we’ll be able to bring down the risk premium,” he assured.
With that, he said “you can uniquely identify people and also uniquely identify where they live; so this is something we want to do on our side and then the banks should be able to rely on credit reference agencies and so on in accessing credit.”
He therefore tasked the Board to do whatever it takes to maintain macroeconomic stability and create conditions to allow the banks to bring interest rates down sustainably.
By Charles Takyi-Boadu, Presidential Correspondent