Renowned economist Kwame Pianim has tasked government to fix the ailing economy because it is killing industries in Ghana.

According to him, high interest rate hovering around 31 percent is adversely affecting companies in the country because it affects profit margins.

He said the development is making it difficult for companies in Ghana to expand. Pianim pointed out that once the economy is stabilised, businesses can widen their scope.

“I am old enough to have known when I was working with the Ministry of Finance that inflation was three percent, interest rate was seven percent… they said if you take your eyes off, it’s like taking a purgative and going to sleep, you wake up in a mess,” the economic consultant stated at a public event on high cost of credit organised by the Ministry of Trade and Industry and policy think tank, Institute of Economic Affairs (IEA) Tuesday.

“High cost of credit is bad economic management because it doesn’t lead to growth… We woke up one day and the Cedi has depreciated significantly. We need to take care of the micro economy, good management and government fiscal loan and then the cost of credit will come down.”

The Trades Minister Ekwow Spio-Garbrah conceded high-interest rate is having a major toll on industries in the country.

“The persistently high-interest rates have dire consequences for sustainability and long term prospect for our country’s economy. High-interest rate, high cost of credit translate into high cost of doing business. High cost of doing business translates into the cost of production for industries which are then passed on to consumers in the form of higher prices of goods and services. High cost of credit affects the overall national growth,” Spio-Garbrah opined.

The International Monetary Fund (IMF) has already given Ghana $114 million out of a $918-m bailout package to shore up its economy.