Ato Forson says business borrowing costs have halved but banks still lend too little

Pinned summary · as of 04:43

Ghana's finance minister, Dr Cassiel Ato Forson, has claimed that the price businesses pay for credit has fallen by over 50% during President John Dramani Mahama's time in office. In the same remarks he criticised commercial banks for extending too little credit to private firms.

What we know

• Before Mr Mahama's government began, borrowing costs for firms stood at roughly 30%, Dr Ato Forson said, and he claimed they have since been cut by over half. This is the minister's own claim.
• According to the minister, businesses can now get bank loans at rates between 9% and 13%.
• He said the reduction was deliberate policy, and that the government's next target is a single-digit cost of capital so that firms can borrow from banks and expand.
• Dr Ato Forson voiced concern that Ghana's banks are lending too little to the private sector, adding that this “should not be the case”.

What's disputed / unconfirmed

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  Accounts differ on where the minister spoke. MyNewsGH said its report was based on a video it had seen, while MyJoyOnline said he was addressing the Food and Beverages Association of Ghana. Neither has confirmed the other's description.
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  MyNewsGH and Atinka Online reported the minister as saying that cheaper loans matter little unless firms can actually secure them, so lower rates must come with wider availability of credit. No other report carried this point.
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  MyJoyOnline and Kessben Online reported him as saying the government wants credit to be cheaper and easier to reach for market traders and business owners nationwide, and that affordable financing would create jobs. This has not been confirmed by other reports.

Why it matters for Ghana

Loan rates decide whether a trader in Kumasi, a food processor in Tema or a small manufacturer can afford to stock up, hire or buy equipment. If rates are as low as the minister says, borrowing is cheaper on paper, but his own complaint suggests firms may still struggle to get loans approved. Business owners and the banks will judge the claim by what lenders actually offer in the coming months.