Finance Minister, Seth Tekper is calling for the establishment of a development bank.
According to him, the development bank must have the Exim bank approach and must not necessarily be a state owned bank.
“We should be thinking of a development bank not necessarily a state owned but a bank that is deep enough to go into long term financing like mortgages, we don’t have that yet, even if we do it is not deep enough,” he said.
He was optimistic that the bank’s establishment will tackle crowding out effects in borrowing and high interest rates in the country.
Government and the private sector have for year’s competed and depended on the same sources for short term borrowing.
Seth Tekper explained that the bank’s sole purpose will be tackling long term borrowing saying, “treasury bills we know are popular and till we started going into the sovereign bond, the three year and five year bonds the most reliable source of financing for the budget was the treasury bills which have high interest rates and we all know its effects.”
He added that “government itself must begin to look for a deeper source of financing particularly for the capital budget it is also the case for the private sector they are also depending on this same market.”
By: Vivian Kai Mensah/citifmonline.com/Ghana