The recent decision by the government to lower Treasury bill (T-bill) rates from 28percent to 20.7percent, is a long-overdue and welcome move.
For the past eight years, under the erstwhile New Patriotic Party (NPP) government led by Nana Addo Dankwa Akufo-Addo, businesses in Ghana have struggled under an environment where excessively high T-bill rates incentivized banks to prioritize government securities over lending to the private sector.
The prevailing 28percent rate was counterproductive, encouraging banks to simply collect deposits, invest in risk-free government securities, and reap substantial profits, while providing little value to depositors or businesses.
This reduction marks a crucial step toward economic revitalization, but it should not be the final destination.
Further cuts—to a range of 11percent to 13percent—would significantly diminish the attractiveness of T-bills to banks, compelling them to increase lending to businesses.
Such a shift would stimulate economic activity by providing small and medium-sized enterprises (SMEs) and other businesses with much-needed access to credit.
A vibrant private sector is essential for sustainable economic growth, and a lower T-bill rate would help unlock its full potential.
Every government since 1992, has touted the private sector as the engine of growth, but little has been done to reduce lending rate, as well as creating an enabling environment for private sector growth.
While this policy adjustment is commendable, there is room for even more ambitious reforms. Moving T-bill rates closer to 10% or 11% in the coming months would accelerate the shift toward a more dynamic banking sector—one that actively supports entrepreneurship, job creation, and industrial expansion rather than passively profiting from government securities.
In the considered opinion of this newspaper, which is shared by businesses, both small and medium, the reduction in T-bill rate, is a win for businesses, a win for the economy, and ultimately, a win for the Ghanaian people.
We applaud this decision by the minister of Finance, Cassiel Ato Forson and the governor of the Bank of Ghana, Dr Johnson Pandit Asiama.
This newspaper looks forward to even bolder steps to ensure a robust and inclusive financial ecosystem.
