HomeNewsTobge Afede XIV Accuses Bank Of Ghana Of Contributing To The Hardship...

Tobge Afede XIV Accuses Bank Of Ghana Of Contributing To The Hardship In The Country

It is very usual to have all the wrong goings in the country place at the doorstep of the president and his Government but the Paramount Chief of Asogli Traditional Area, Togbe Afede XIV, acknowledges that poor leadership is a factor in the economic hardship of the country but Bank of Ghana should be made to shoulder some of the blame as it has lost focus of its core responsbilities.

He has accused the Bank of Ghana for competing with Banks in the country for profits when its focus should be to create a conducive environment to stimulate economic growth and creation of employment.

Speaking during a call on the speaker of Parliament, Alban Bagbin, the paramount chief laid the blame of the country’s high lending rate at the doorstep of the Bank of Ghana.

“Mr Speaker, you spoke quite rightly about the need for the private sector to lead the development of this country. But how can the private sector do it if it has to borrow at very atrocious rates, even in a pandemic environment, of between 25 and 30%?” he wondered.

“Private entrepreneurs or enterprises don’t have stacks of money that they just go and dip into to fund their businesses. They have to depend on the banking system. So, no amount of your hard work would bring the development that we need when borrowing rates are so high. We want the youth to go into private business but with what kind of capital? Expensive, highly-priced 25% or 30%? Those cannot do it, and we have been victims of this over the years”, he noted.

Togbe Afede XIV noted that Government has always been made the scapegoat of economic hardship due to its excessive borrowing but he believes that is just one part of the problem.

 “the scapegoat has always been government borrowing, the high indebtedness of government” but added: “I don’t think that is where all the problem is”.

“I will give a few statistics to show that there is something wrong with our interest rates: 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.”

“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 noted.

He pointed out that UK’s 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,” he complained.

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