Banks fret over soaring cost of doing business in Ghana

Mr Ashong said though the base rate, 24.75 percent quoted by Bank of Ghana was relatively low, due to high rent and electricity bills, the banks charged 25 to 35 percent interest on loans in order to stay in business.

He explained that renting a building for banking purpose at the central business centre of Accra costs about 100,000 US dollars per year and that is prohibitive.

He said in addition to paying high rent, one had to contend with electricity bills, water bills, salaries of staff and air conditioning that go a long way to undermine business operations.

He said the plummeting base rate alone did not necessarily lead to reduction in the interest rate, adding that it was a combination of factors that required government intervention in energy, oil and gas among others.

The Branch Manager, Sahel-Sahara Bank, Accra Central, Mr Obed Adika, said indeed the high cost of business was something banks were worried about. He said renting a building at the central business centre of Accra costs about 5,000 to 10,000 US dollars a month.

Mr Adika said he expected government to intervene to make the situation more bearable for businesses to flourish.

He urged government to release more funds to contractors, explore more and better ways of taxation, and focus on oil and gas to release money into the system, saying “when money flows in the system it makes banks liquid and non-performing assets becoming performing”.

Meanwhile, President John Dramani Mahama, during his inaugural address on Monday, assured the business community to make Ghana a place where economic opportunities would be available to everyone.

He said his administration recognised the vital role the private sectors, especially small and indigenous businesses, played in the expansion of our workforce as well as in the growth and stability of the economy, adding “I want to assure the business community that I will be an ally. I will extend whatever support I can to reinforce your contributions to our development” and called on government to take steps to arrest the situation

GNA