Economist Urges Banks To Ease Procedures

Accra, (Greater Accra) 10 Nov. Banks have been asked to ease procedures for prospective customers to open accounts with them, Dr. Ferdinand Tay, a director of the National Development Planning Commission (NDPC), has suggested in Accra. Speaking at the first National Banking Conference, Dr. Tay said documents such as passports, drivers licence, identity cards and other forms of recognition can be used to open accounts. He said the banks need to attract more people to have bank accounts to mop up excess liquidity for investment. The conference is under the theme, ''The Banking Sector in Ghana: meeting the challenges of Vision 2020''. Dr. Tay said banks also need to address the issue of the low degree of monetisation, shallowness of fiscal intermediation, inadequate institutions and provision of venture capital. He advised them to adopt appropriate banking culture that will seek to attract not only normal savings but corporate investors as well. Dr. Tay said the Ghana Vision 2020 and the Medium Term Development Plan identify a number of objectives and activities to address current constraints in the performance of the financial sector. Dr. Tay mentioned some of the objectives of Vision 2020 as the promotion of the monetisation of the economy, especially rural sector activities by raising money supply to meet the needs of development and reduce poverty. ''The rates of inflation and foreign exchange depreciation levels should be reduced to comparable levels of upper middle-income countries''. Dr. Tay said there is the need ''for an efficient system in the financial sector while Accra should be developed to become the financial centre in the sub-region. ''In addition, we should seek to achieve an overall growth rate of four per cent in agricultural production.'' He noted that in the medium term it is expected that the banking sector will contribute significantly to mobilise domestic resources for public investment so as to reduce dependence on external financing. Dr. Tay said the target for the end of the medium term is that real lending rates should not be higher than seven per cent with the annual rate of depreciation of the cedi falling to six per cent. These and several measures and guidelines have been endorsed in the Vision 2020 document for the achievement of the objectives of developing the financial sector as a whole. He cautioned that the endorsement of the objectives and strategies by the Vision 2020 document does not imply that the government or the NDPC is the lead player in its implementation. ''The purpose is to provide a clue of the way forward to stakeholders''. He said the NDPC's role is to coordinate the process of development policy formulation and address the challenges of inter- sectoral linkages from Vision 2020. The NDPC director said the current instability of Ghana's economy and the changing faces of the financial sector requires that set national objectives be reviewed periodically hence the need for the conference as well as several others held earlier to seek feedback information on the challenges for appropriate redirection. Mr. Osei Kumah, deputy governor of the Bank of Ghana who presided, said steps are being taken to address issues such as high inflation, interest rates and poverty amidst the adoption of environmentally sound pattern of development. Mr. Kumah caused an uproar when in an answer to a question on how to reduce inflation, he said the Central Bank has no prescribed solutions to bring down inflation and high interest rates immediately.