FINANCE

Ghana Monetary Policy Rate reduction from 16% to 14.5% is salutary—–Amadu, Chair, Afro Arab Microfinance

&NewLine;<p>Alhaji Salamu Amadu has commended the governor of Bank of Ghana&comma; BOG&comma; &nbsp&semi;Dr&period; Ernest Addison for the bold step he took to help stabilise the Ghana’s financial sector&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>This appraisal and submission&NewLine;which was lifted from his &nbsp&semi;Facebook wall&NewLine;and made available to OpenLife by Dickson Boadi&comma; a Ghanaian media expert&comma; was&NewLine;the decision of Ghana apex bank to reduce the country’s Monetary Policy Rate&comma;&NewLine;MPR to 14&period;5 percent from 16 percent <&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>&nbsp&semi;&&num;8220&semi;Desperate times ask desperate measures I&NewLine;salute you Dr&period; Ernest Kwamina Yedu Addison Governor of Bank Of Ghana&period; Ghana First&NewLine;in Sub-Saharan Africa to cut MPR&nbsp&semi; to combat&NewLine;the pandemic&period;”<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Ghana became the first&NewLine;sub-Saharan African country to cut interest rates in response to the&NewLine;coronavirus pandemic&comma; reducing its benchmark to an eight-year low&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The monetary policy rate&NewLine;was reduced to 14&period;5&percnt; from 16&percnt;&comma; the first cut since January 2019&comma; the Bank of&NewLine;Ghana said in an emailed statement on Wednesday&period; The Monetary Policy Committee&NewLine;was originally scheduled to announce its decision on March 23&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Growth in gross domestic&NewLine;product could decline to 5&percnt; and could even slow to 2&period;5&percnt; in a worst-case&NewLine;scenario&comma; said the central bank&period; The International Monetary Fund’s most recent&NewLine;growth forecast for Ghana was 5&period;6&percnt;&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The MFI is highly&NewLine;dependent on family incomes and family cannot be separated from the business&period;&NewLine;So with the fee of the Civic 19&comma; and family left in fear and indoors&comma; their&NewLine;incomes will be affected and and implies MFIs default rate will increase&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Micro businesses will&NewLine;suffer a great deal&period; Some will be out of the market entirely&period; Credit risk will&NewLine;be very high and sales will go down significantly for the high end MFIs&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>What should be done is to&NewLine;educate them to keep the capitals in stock&period; MFIs have to reschedule the&NewLine;facilities and defer repayment &period; Education put in place<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<figure class&equals;"wp-block-image size-large"><img src&equals;"https&colon;&sol;&sol;openlife&period;ng&sol;wp-content&sol;uploads&sol;2020&sol;03&sol;Ghana-2&period;jpg" alt&equals;"" class&equals;"wp-image-2767"&sol;><figcaption><br> <strong>Governor of Bank of Ghana&comma;  Dr&period; Ernest Addison <&sol;strong><&sol;figcaption><&sol;figure>&NewLine;&NewLine;&NewLine;&NewLine;<p>Government has to&NewLine;intervene and provide stimulus packages for MFIs since their impairments would&NewLine;be worsened after the lockdown&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Even though BOG has&NewLine;reduced the Prime Rate&comma; GRR has not improved&period; Banks are still lending at GRR of&NewLine;16&period;15&percnt;&period; MFIs still get their funds at high rates&period; We will monitor how the rates&NewLine;behave to be able to impact the lives of our customers&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>As part of the Afro-Arab&NewLine;Microfinance cooperate social responsibility&lpar;CSR&rpar; the company has distributed&NewLine;200&comma;000 hand sanitizers and hand gloves to the zongo communities across the&NewLine;country under the leadership of the Board Chairman Alhaji Salamu Amadu&period;<&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Alhaji Salamu Amadu won&NewLine;the 40 under forty banking and finance award in 2019&period; <&sol;p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Chairman Salamu as he is&NewLine;affectionately called in the business arena has contributed tremendously to&NewLine;make sure poverty becomes history in the zongo communities&period;<&sol;p>&NewLine;

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