The President of the National House of Chiefs, Togbe Afede XIV, says the reason why many indigenous businesses fail in Ghana is because of the high interest rates that have been existent for a very long time.
According to him, the high rates prevent Ghanaian companies from borrowing from the banks, which means they are not able to invest in their business and make profit.
Speaking in an interview on Citi TV, Togbe Afede said the country cannot industrialize as it so wishes to if interest rates continue to remain high as it its.
“I’ve never met anybody who disputed the fact that our interest rates have been too high. If you adjust the yields in our money markets for depreciation, the real return is still very high. Why are we doing this to ourselves? And we expect businesses to mobilize money and industrialize this country? We expect people to borrow money and risk in agriculture? It just would not happen.” – He said in an interview on Citi TV
“We want to industrialize, talking about one, district, one factory, where would people get the desired capital from? Businessmen don’t come with a lot of money in their pockets that they invest. It’s a little bit of equity and a little bit of debt that goes to fund a company, but the interest rates that we have in this country make it almost impossible to do business profitably. That is why you look around and companies are collapsing. It’s hard to find Ghanaian companies that are 50 years old. But the foreign owned companies are able to borrow from abroad,” he added.