The
Ghanaian government is crowding out the private sector in accessing finance
through the issuance of treasury bills and bonds, a major worry expressed by
industrialists.
Commercial
banks today find it more profitable and risk-free to lend to government than to
individual businesses.
The
Ghanaian economic and financial environment has therefore become attractive enough
for banks to make excessive profits without lending to the public – the cost of
lending for private businesses therefore keeps shooting up.
Deputy
Minister designate for Finance, Ricketts Kweku Hagan, at his vetting this week posited
that the country’s high interest rates charged on loans is an attribute of
deficits in government’s expenditure.
This is a major worry to industry, especially local manufacturers, who have had cause to prevail on the government to tread cautiously.
This is a major worry to industry, especially local manufacturers, who have had cause to prevail on the government to tread cautiously.
Robert
Kwaakye Nketia, Chairman of the Association of Ghana Industries (AGI) in Ashanti
and Brong Ahafo regions, particularly wants the government to heed to the
automatic adjustment of fuel prices, which allows periodic price reviews for
effective planning.
“If
they do that it would mean that government will not ask money from the banks to
finance its projects”, he said. “But if the government does not do that, always
the government will go to the banks for money and lending to the government is
safer but if they stop that then money will be available to industry to also
tap in to grow”.
Mr.
Nkatia has been speaking to Luv Biz Report at a forum to dissect provisions in
the 2013 national budget statement, organised by the International Federation
of Economic Journalists (IFEJ).
According
to him, the Ghanaian economy should be on sound footing if government had factored
most proposals of the AGI into the national budget.
Story
by Kofi Adu Domfeh
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