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Home Headlines Ato Forson Outlines Plan to Lower Interest Rates and Stabilize Ghana’s Economy

Ato Forson Outlines Plan to Lower Interest Rates and Stabilize Ghana’s Economy

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Ato Forson
Ato Forson

Dr. Cassiel Ato Forson, Ghana’s Finance Minister-designate, has presented a comprehensive strategy to address the country’s soaring interest rates and improve economic conditions for the private sector.

During his appearance before Parliament on January 13, 2025, Dr. Forson discussed the challenges facing the economy, particularly the impact of high borrowing levels, and how his administration plans to tackle them.

One of the key points Dr. Forson emphasized was the role of fiscal authorities in stabilizing the economy. He explained that the government’s frequent borrowing activities contribute significantly to rising interest rates. The Minister-designate highlighted the unsustainable nature of borrowing large sums weekly, stating, “If the country is actively in the market borrowing every week—rolling over GHS 111 billion weekly—the interest rate will certainly go up.”

He also tied the rising interest rates to inflation, stressing the importance of addressing both issues simultaneously. To curb inflation and stabilize the economy, Dr. Forson proposed a series of measures, including reducing wasteful government expenditure and adopting more prudent borrowing practices.

“We need to work in a way that we can stabilize inflation, stabilize the exchange rate, and create jobs,” he said. Dr. Forson believes that these steps are crucial in reducing the pressure on the private sector, ultimately leading to lower interest rates and easier access to credit for businesses.

The Finance Minister-designate also pointed out that reducing government borrowing would ease the burden on the financial sector, allowing businesses to secure loans at more favorable terms. By cutting unnecessary expenses, he argued, the government would not only curb borrowing but also help drive down inflation, which in turn would contribute to lower interest rates.

In his address, Dr. Forson acknowledged the considerable work ahead, recognizing the challenge of stabilizing key economic issues but reaffirming his commitment to implementing policies that foster growth, lower interest rates, and create a more favorable environment for Ghanaian businesses.

The proposed policies come at a critical time as Ghana’s private sector continues to grapple with the effects of high borrowing costs. Dr. Forson’s approach, focused on fiscal discipline and reduced government borrowing, aims to bring stability to the economy and create better conditions for both businesses and consumers.

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