Today in History: Akufo-Addo crippling private sector – Isaac Adongo

The Member of Parliament for Bolgatanga Central, Isaac Adongo, accused the government of crippling the private sector since 2017.

He stressed, “Policy rate is only significant if the Bank of Ghana is a significant provider of liquidity to the banks, then you can charge at a policy rate plus which will be cheaper. But as we speak the people are not borrowing from the bank of Ghana to lend so you only give an indication.

"That indicative figure doesn’t reflect in the structure of my cost of capital and, therefore, it will not bring down my interest rate, it’s as simple as that. The earlier Finance Minister and his people understand this dynamics the better. It is for them to improve the support they give to the private sector,” he said.

Read the full story originally published on November 30, 2018, by GhanaWeb

Member of Parliament for Bolga Central, Isaac Adongo has accused the Akufo-Addo-led government of crippling the private sector since the New Patriotic Party assumed office in 2017.

According to Mr. Adongo, the “real credit” of the private sector has declined by a negative 3.9 percent, making it more difficult for businesses to thrive compared to the previous NDC administration.

He stressed, “Policy rate is only significant if the Bank of Ghana is a significant provider of liquidity to the banks, then you can charge at a policy rate plus which will be cheaper. But as we speak the people are not borrowing from the bank of Ghana to lend so you only give an indication. That indicative figure doesn’t reflect in the structure of my cost of capital and, therefore, it will not bring down my interest rate, it’s as simple as that. The earlier Finance Minister and his people understand this dynamics the better. It is for them to improve the support they give to the private sector.”

"If real credit to the banking sector or private sector has decline by negative 3.9 percent in other words it is a lot more difficult to get money now under NPP to run your business than it was to get previously and that the volumes have contracted in real terms by 3.9 percent how is that a reflection of support to the private sector. So no wonder real private sector credit has declined…" he added

The MP also insisted that about GHC8 billion and GHC9 billion liquidity in the banking sector has been frozen by government through the issuance of illiquid bonds to GCB Bank and CBG for the collapse of the seven banks instead of giving them cash or liquid bonds.

This he said has compromised the liquidity of these two banks, thereby, affecting their ability to meet their obligations to customers and extend needed credit to the private sector.

“Available data suggest a consistent decline of the private sector under the NPP Government thereby affecting the creation of sustainable jobs by the private sector,” Mr. Adongo reiterated.

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