Alternatively, the association has urged government to subsidise the loan facilities or lend from the banks and relend to the pharmaceutical manufacturers at concessionary rates.
The PMAG said the terms of some loan facilities offered by the banks remained high and unfriendly for the purpose.
Pharmaceutical manufacturers have been among the most active producers in the COVID-19 period, with government urging the sector to match the needs of society in terms of drugs and relevant medical supplies.
The Ghana Association of Bankers (GAB) has put together a GH¢3 billion syndicated fund for the pharmaceutical industry in response to government’s directive to prop up measures to fight the COVID-19 pandemic.
But the President of the PMAG, Mr Kofi Nsiah-Poku, told the Daily Graphic that the loan facility might not achieve the intended purpose because most of the banks were only willing to offer the loans at the regular interest rates.
He explained that members of the industry required the softer loan terms to be able to employ more hands and meet other recurrent expenditure, acquire modern machinery and technology, and to be able to expand to accommodate the requirements of the nation and beyond.
“We are being offered the loans at interest rates between 16 per cent and 20 per cent, and these are quite high and, therefore, not suitable for the purpose of the emergency requirements to promote the fight against COVID-19,” Mr Nsiah-Poku said.
The COVID-19 global crisis has put the pharmaceutical industry in the forefront of the fight to combat the disease, with the Ghana government announcing a GH¢600 million soft loan scheme for micro, small and medium scale businesses to cushion them to survive the period.
“Government, in collaboration with the National Board for Small Scale Industries, business and trade associations, and selected commercial and rural banks, will roll out a soft loan scheme up to a total of GH¢600 million, which will have a one-year moratorium and two-year repayment period for micro, small and medium scale businesses,” President Nana Addo Dankwa Akufo-Addo said in his address to the nation on Sunday, April 5, 2020.
“The commercial banks are, in addition, responding to the Bank of Ghana’s 1.5 per cent decrease in the Policy Rate and two per cent in reserve requirement with a GH¢3 billion facility to support industry, especially in the pharmaceutical, hospitality, service and manufacturing sectors,” he added.
The association of bankers subsequently announced the availability of the GH¢3 billion facility for the pharmaceutical industry.
But the PMAG said even after consultation with the banks as directed by the Ministry of Health, some of the banks were only willing to offer the loans at the regular interest rates.
Indeed, Exim Bank has been the only bank to have offered the sector softer loan terms, as it loaned to Tobinco Pharmaceutical Company at about half the regular interest rates.
But the facility from Exim Bank could only cater for less than 20 per cent of the loan requirements of the sector.