A Ghanaian citizen with an understanding of economics Kwadwo Botchway has said banks are key agents in stimulating economic growth and every country that has developed was due to the role banks played.
But unfortunately, in Ghana, that is not the case. Our banks are not acting as agents of growth in the economy.
Speaking on Frontline on Rainbow Radio 87.5Fm, he said we have a situation in this country where the banks mobilize resources in the private sector and deposit it with the government in the form of bonds.
”This is not a balanced situation that creates a lot of problems. When our inflation rates went off the roof, there were freezes from the banks in giving out loans. No matter your credit history, the banks did give out loans. The only exception was GCB.”
He stated unequivocally that the majority of our banks invest depositors’ savings in government bonds.
“It is a lazy approach to economic development. Every country’s development requires the private sector, not the government. So if you have a situation where the banks are in difficulty, we have a problem.”
He said per the new directive, the haircut announced by the government will get the banks thinking and find new ways to invest depositors’ savings.
He encouraged the banks to put back the deposits into the private sector, which is the engine of growth for every economy.
He believes the debt restructuring announced in the short term would have some impacts, but the long-term effects would be positive.
“The private sector does not have the support it requires to grow the Ghanaian economy, so I am overjoyed that this is happening now. However, I am concerned that it should take the IMF to get us to do this.”
He advocated for new regulations to monitor how our banks invest our deposits in Ghana, urging them to abandon their lazy armchair approach to investing our funds.
By: Rainbowradioonline.com/Ghana
