Monetary policy alone won’t bring down interest rates – Bawumia

Monetary policy alone cannot clip lending rates appreciably, except when factors like a functioning National ID system, a working credit bureau, an efficient address system, digital land registry and an interoperability system, are accounted for, Vice President Mahamudu Bawumia has said.

“If we have all these pieces of the puzzle in place, then you will begin to see its impact on interest rates, because it will be a completely different economy,” Dr. Bawumia said at the launch of the 55th anniversary celebrations of the National Investment Bank (NIB) in Accra.

That is why we have embarked on doing the things that we think are necessary to fundamentally transform the banking and economic environment of the country, and that is why we are putting in place these different pieces of the jigsaw,” he said.

According to him, 70 percent of houses in Accra do not have titles, and he described such houses as dead capital in the ground which cannot be used to raise equity and support economic development.

Dr. Bawumia also expressed worry over the murky land acquisition regime in the country, saying government will, in the latter part of this year, begin a base mapping system in an effort to digitalise land, as well as ensure that land titles can be acquired within seven days.

“For the longest time, we have been focusing on the micro policies to stabilise the economy, but if you don’t have these other pieces in place, then the banking environment will not change. By April, we should see the roll out of the National Identification system,” he stated.

“In the next couple of months, also, we should launch finally Payment System Interoperability in Ghana. We have been talking about it; I even set a deadline, which was not met. But I understand why they didn’t meet it; they are making the system more robust than what we had initially thought of,” he added.