The Bank of Ghana says that rising government expenditure and the weaken revenue generation remains a challenge in stabilizing the country’s economy.

The Governor of the central bank, Dr. Ernest Addison raised these concerns at the last monetary policy press conference last Friday.

According to him this calls for tough measures in order to help stabilize the country’s economy.

He says this development forced the monetary policy committee to keep the policy rate at 16%.

“Under the circumstances where the fiscal situation is still uncertain, it is quite difficult to start lowering the policy rate”.

The governor was confident that credit growth will pick up and the cost of credit will go down significantly with the current banking sector clean up in the country.

“If you look at today’s monetary policy committee the lending rate Is around 23-24% we expect that credit growth will pick up significantly and in a meeting with the banks that is the sense we get.”

When questioned about the recent forecast by the Economic Intelligence Unit his response was defiant of the doom predicted by the EIU.

“We think that we have a relatively strong baft this year our reserves are fairly strong in August and September even before the Cocoa 1.3billion in flows come in”

With the coming in on new banks the governor says there should not be any cap placed on the number of banks in the country if only you meet the requirement.

“It’s an open liberal financial sector and if you meet the entry requirement including the minimum capital requirement of 400 million Ghana cedis we will license you”

He however disclosed that some work needs to be done on National Investment Bank (NIB) and their recapitalization.

“The capital requirements appeared larger than we had originally envisaged so obviously NIB is a bank that we need to do some more work on but remember it is a state bank so the considerations are very different”

The governor also noted that the imminent arrival of the $1.3billion Cocoa syndicated loan will help push the country’s reserves to about $9billion next quarter.

He also added the bank will soon issue a directive to the commercial banks on the use of the National Identification card as a means of identification for banking transactions.