MrSpeaker, to admit that it is not contentious and that both sides of the House agree to the facility. However, I would want to point out one or two observations that we made at the committee meeting.
Just before recess, I was privileged to be in the team of Members of Parliament that went for a West Africa Monitory Zone meeting in Guinea, Conakry, to be precise.
Mr Speaker, if there Was one thing that Ghana was praised for implementing, then it is this particular project that Ghana has implemented since 2008. We are told that the focus of this project is the rural areas and the target group is the rural banking industry.
The definition of a rural community by the project, is a community which is 4 kilometers away from a branch of a commercial bank or a community with an inhabitant of not more than 5,000.
We think that this should be looked at. This is because if indeed, the rural banking industry is the target, then I must admit that most of these rural banks are located in areas with populations more than 4,000 and indeed, most of them too are in the peripheries of cities. So, if we go by this definition, most of them would be left out.
Apart from that, we also have a problem with the interest rate at which the money would be on-lent to the institutions which will take this facility.- This is because if
Government is going for the facility at 0.75 per cent, for 40 years, then some of us think that, giving it to the banks and institutions at 6 per cent is on the higher side. This is because Government's aim is not necessarily to make profit, it is just to facilitate the Project and indeed, the difference between 6 per cent and 0.75 per cent, some of us think it is too high.
So, we actually pleaded with the implementers to see if it will be possible to reduce the interest rate. This would encourage more and more banks to come in and indeed, if Government is taking the facility for 40 years and then adding the grace period of 10 years to it, it means that the facility is going to be in Ghana for 50 years. But then, the banks are taking it for four years. Which means that the repayment period too for the banks, would be too short; so at least, if it can be extended.
Mr Speaker, I am convinced that the 6 per cent interest rate is high, especially now that we are even claiming that our cedi is stable against the Dollar. So, if the cedi is stable, Why are we then saying that a Cedi denominated facility should attract a higher interest rate. I am not too much convinced by the argument for the increase in the interest rate.
On the whole, I believe strongly that this facility will help reduce the circulation of cash in the system and make Ghana move towards a cashless country. In my view this is something that we should all give our support to.
On this note, I urge Hon Members to second the Motion.