The former President of the Association of Ghana Industries (AGI), Dr. James Asare-Adjei, has described the high interest rates in the country as one which will largely impact the capacity of businesses to compete with other countries on the continent with preparations underway to initiate the commencement of the AfCFTA in January 2021.
According to him, businesses may very well be swallowed up by other countries trading under the African Continental Free Trade Area, unless we build the capacity for it.
“The sub-regional market and for that matter, countries, especially Francophone countries around Ghana, have very low interest rates. So if you have Togo and Benin and probably even Nigeria having interest rates and policy rates which are relatively lower than that of Ghana’s, the question is, ‘Can Ghana be competitive if cost of borrowing is still high?
“The second thing is that, to what extent can we then be able to take advantage of the bigger African market to ensure that now, whereas other African countries and other businesses in other African countries come into our market, then we also build the capacities to be able to enter into this but one-continent market. These are some of the challenges because definitely, we cannot be competitive if our interest rates continue to be that high”.
Also speaking on the impact of the interest rates in Ghana on businesses, a banking Consultant, Nana Otuo Acheampong, has revealed that government plans of implementing a Ghana Beyond Aid may well be a pipe dream considering the high interest rates businesses are subjected to.
He said, in spite of the laudable developments within the country’s banking sector, the preservation of the policy rate was going to deprive businesses of much-needed cheap credit.
“The government has set for itself a target of a Ghana Beyond Aid. This means we are self-sufficient and are able to produce what we want and eat what we produce. But this production cannot go on with these levels of high-interest rates.”
Earlier, the Chief Executive Officer (CEO) of the Ghana Export Promotion Authority (GEPA), Dr. Afua Asabea Asare, urged government to remain resolute in supporting local industries as part of efforts towards achieving the Ghana Beyond Aid agenda.
Speaking in an interview, she intimated that, their help to businesses will boost the country’s exports for sustainable development.
“Now things are not going in their raw form, they are being processed, everybody is trying to add value to their products and that is what industrialization is all about. Adding value before sending it out and creating jobs for the people is what the government talked about, and so I am happy to say that, the government’s vision of industrialization is taking roots, the President made a good point when he decided that Ghana is going to be industrialized.
“We have listened to their needs, and so it depends on the organization and their needs. So we talk to them about their needs and see how we can meet them half way, even if we cannot resolve all their problems. We will look for markets for them, some of the products are quite new, and we have to make sure that they get the right certification among others to go onto the international markets; it is not easy penetrating the international market when you are not properly certified.”
