Economist and lecturer at the Wisconsin
International University College Dr. Samuel
Worlanyo Mensah has opined that maintaining the policy rate at 27 % will discourage businesses and scare away investors.
This follows the information released that the Monetary Policy Committee of the Bank of
Ghana has kept the policy rate unchanged at
27% in order to control inflation.
Speaking on Univers Business on the
the implications, Dr. Worlanyo Mensah
Believes that its rather unfortunate that the Central Bank of Ghana will maintain the policy rate at 27%.
According to him this will scare away investors as well as affect direct foreign investments.
“I think it’s rather unfortunate that the central bank will continue to maintain the policy rate at 27 percent, but this is simply anti-production. And I believe that this high level of policy rates will definitely discourage businesses. It will definitely increase the cost of doing businesses.”
“It will scare investors away and it will affect foreign direct investment.
So it’s anti-productive and it is really going to affect businesses, both local and foreign businesses.”
He added that the decision of the Monetary Policy Committee is due to unnecessary circulation of money in the economy.
He believes that this decision will however affect the local economy in the long run.
“There is unnecessary money in circulations, and for that matter, I think that has been the main reason for which they find it very difficult to reduce the policy rates. Because they think that by maintaining the high policy rate, definitely they are going to control inflation, the amount of money in circulations, and thereby reducing the purchasing power of the Ghanaian people.”
“But I think that invariably, it is definitely going to kill businesses, and it’s going to affect the local economy in the long run.”
Addressing the projections of the state of Ghana’s economy after the elections, Dr. Worlanyo advised citizens to be mindful of their actions before, during and after the elections to prevent chaos.
“Well, definitely if we are not able to manage the election expectations, it will definitely create the grounds for chaos, anarchy and confusion, and that will definitely scare investors away. So we must be very mindful of our actions. We need to do everything possible to maintain the peace that we are currently enjoying.”
“And there can be no justice without peace, and there can be no peace without justice. So in as much as we are preaching peace, I believe that various stakeholders should do what is needful, do what is right. Because in the absence of this, the self-interest of the local economy is definitely going to be jeopardised.”
Story by: Sarah Esinam Atiemo | univers.ug.edu.gh
