Currently averaging at 35 per cent per annum, interest rates in Ghana are probably the highest in the sub-region and the effects are there for all to see. Together with similar factors, the high rates have weakened the private sector and pushed the economy into debt-distress.

As disturbing as the trend has been, it is more of a self-inflicted menace than caused by external factors.
When the government, over the years, raised its appetite for loans to be able to fund bulging expenditures, it was forced to pay more to access funds locally.

This drove the rates over the roof – making cost of and access to credit the twin evils facing businesses in the country.

Sadly, this is a challenge that predates even the Graphic Business. Previous efforts to get around the problem have either failed to yield the necessary results or have been poorly implemented.

But it appears all that can end if the country takes full advantage of the spillovers of the recently concluded Domestic Debt Exchange Programme (DDEP).

As succinctly captured by the Managing Director of the Ghana Stock Exchange (GSE), Abena Amoah, the debt restructuring exercise, although painful, presents the country the opportunity to re-set its interest regime for the good of the economy.

She said the current rate of about 35 per cent on government securities was unsustainable, adding that, “I dare say one of the reasons we had to restructure our debts was because of the high interest rates, which was not sustainable”.

“Collectively, we must make sure this era of low interest rate on government securities will still remain low so that our private sector has a chance of affordable capital to produce for us,” 

It is important to note that all of us Ghanaians, especially the investment-conscious public, contribute in one way or another in creating and sustaining the low interest rates regime.

Instead of investing in sustainable avenues such as the GSE, most investors built a lifestyle around investing in government securities.

This fueled and sustained the high interest rates to the detriment of the equities and corporate bond market.

Thus, as we join Ms Amoah in working to achieve a stable interest rate regime, let us also work towards recalibrating our lifestyle.

Increased resort to government securities creates a rocky macroeconomic environment that strains businesses, weakens job creation and results in a fatigued economy similar to what we are faced with.

Now is the time to look more positively to the stock market in the interest of sustainable wealth creation that also creates a friendly business environment for the private sector to thrive, create and sustain more jobs.