Govt must intervene in money market to bring down interest rates

The Secretary-General of the TUC, Mr Kofi Asamoah, has urged the government to strategically intervene in the money market to bring down interest rates in the country.

He said the ability of the government to adopt an innovative approach and work with the banks would bring down the cost of borrowing as a means of improving employment creation.

“We are not suggesting that the government control the banks”, he said.

Speaking at the beginning of the national economic forum at Akosombo Monday, Mr Asamoah stated that  financial institutions in the country were making huge profits due to the high cost of borrowing.

He said the TUC had drawn attention to the high interest rates regime, which had offered the banks considerable profits while the business community was suffocated and unable to balance their books. Weak economy

He said the country’s economy was weak and not working for the majority of Ghanaians as evidenced by high incidence of poverty among the people.

“At the macro level, there are projections that growth is slowing, the current account deficit is widening as imports saturate our markets and our exports remain raw materials, inflation is surging and the cedi is falling by the day”, he said.

He said that the national debt was trending towards unsustainable levels.

“The times are hard for most Ghanaians and the hardship is intense and spreading quickly. Prices are rising faster than incomes; jobs are difficult to find as the majority of our young people remain jobless.

“Public services and utilities, including water and electricity, are poorly delivered at exorbitant prices and it is becoming too difficult and costly to obtain services”, Mr Asamoah stated. Pursuing poor economic policies

The TUC Secretary General attributed the challenges facing the country to the nature of economic policies pursued in the last three decades.

“We have made reference to the hands-off neoclassical economic policies and the failure of those policies.

“We have expressed grave reservation about the over-liberalisation of international trade and  the way it has destroyed the domestic manufacturing base.

He added that, “we have also raised concern about foreign currency out of our country sometimes beyond the legal limits set by the Bank of Ghana. Weak state institutions

Mr Asamoah further indicated that inherent in those economic policies had been a continuous weakening of the state and the institutions of state.

“The state has retreated into the comfort zone of politics, leaving economic governance to market forces and the extreme polarisation has made it difficult for us to agree on common solutions to our problems.

“We are defending and projecting the narrow interest of parties”, he said, adding that the low and high profile cases of corruption cases witnessed each day and the inability to successfully prosecute offenders were a manifestation of the weakness of state institutions.

“In such situation no citizen will want to hear the word sacrifice”, he added.

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