Interest rate in Ghana genocidal, criminal - Okyenhene

The Okyenhene has lashed out at universal banks in Ghana for charging exorbitant interest rates at the detriment of the poor.

Currently, Ghana’s interest rate stands at 26%, making the West African country one of the highest in terms of interest rate in the world. However, some universal banks are charging over 30% on loans.

The Bank of Ghana’s increase in the prime lending rate from 23% to 25% in September raised a lot of eyebrows as business watchers complained it will stifle investment, the development of the private sector and economic growth in general.

Adding his voice to the numerous calls for a reduction in the rate, Osagyefuo Amoatia Ofori Panin II lamented for the poor and pleaded with the Central Bank to take a second look at it.

The king of Akyem Abuakwa described the 26% as “genocidal and criminal.”

Speaking to Kasapa FM’s Benjamin Amuzu, the Okyenhene said the rate is inimical to the growth of the private sector since a lot of people will shy away from going for loans to establish or expand their businesses because they will be unable to service them.

“I’ll appeal to the Bank of Ghana to review it,” he said. “If you peg your profit at that margin how will it be possible for a startup company to pay? They should make it moderate. I’ll appeal to the government and the Central Bank to review it. They need to bring it real down for businesses.”

Interest rate in Ghana averaged 16.99% from 2002 until 2015, reaching an all-time high of 27.50% in March of 2003 and a record low of 12.50% in December of 2006.

High-interest rate had consistently been cited by the world competitive index reports as well as in surveys by the Association of Ghana Industries as one of the major obstacles to doing business in the country.