Government plans to bolster private enterprise to spur economic expansion, affirms Ofori-Atta.
Revised Article:
Ken Ofori-Atta, the Finance Minister, has reiterated the government's commitment to putting the private sector front and center, aiming to juice up economic growth and generate more prospects for the nation's youth. In a lively parliamentary address on July 31, 2023, Ofori-Atta emphasized the significant role of the private sector in fueling growth and job creation—so, they've allocated a hefty chunk of resources to vital institutions to ensure financial intermediation and backing for the private sector.
Standing before parliament, the minister declared, "Matey, the government's heart is set on amplifying access to competitive financing for the private sector. Over the last half decade, we've built critical institutions ready to sweep in and provide our private sector with financial nest eggs."
Notable institutions born out of this initiative include the Ghana Incentive-based and Risk-Sharing Scheme for Agricultural Lending (GIRSAL), Development Bank, Ghana (DBG), the Ghana Commodity Exchange (GCX), and the Venture Capital Trust-Fund (VCTF).
With the goal of jumpstarting a swift economic recovery, Ofori-Atta outlined specific steps to boost these institutions and enhance their engagements with the private sector. Key aspects include the disbursement of about GH¢1 billion in loans from the DBG by year's end, catering to private sector businesses—especially small and medium-sized enterprises (SMEs), thereby empowering them to expand their ventures and contribute to economic growth.
Second on the list, Ofori-Atta plans to counter risks and lure more private sector investors into the agricultural value chain by employing GIRSAL and DBG Co-Guarantee, providing co-guarantees to the private sector. This collaboration aims to spark increased investments in the agricultural sector and nourish food security and employment opportunities.
Next up, Ofori-Atta intends to activate a US$11 million fund in collaboration with private sector investors. This added capital will fortify SMEs, propelling their development and expansion. SMEs are the lifeblood of economic development and job creation, and budget boosts like this set them up to thrive.
Lastly, the government intends to kick off the operations of the Ghana Infrastructure Investment Fund (GIIF), which will implement commercially viable solutions, including the Agenda 111 initiative aimed at revamping healthcare infrastructure, the Accra-Tema motorway project, and the development of budget-friendly university hostel lodgings. These endeavors are key to propelling economic growth and national growth.
In addition to these initiatives, Ofori-Atta unveiled the upcoming Ghana Mutual Prosperity Dialogues—a public-private partnership hunting for foreign and domestic investments, promoting shared prosperity driven by job creation, exports, and import substitution.
Ofori-Atta concluded that the government seeks to cultivate an atmosphere conducive to business success, boost creativity, and enhance productivity through strengthened financial intermediation and institutional support for the private sector. By doing so, they aim to empower the private sector to take the reins in guiding the nation's economic recovery, job creation, and sustainable advancement.
As the Finance Minister laid out his plans, he failed to dig deep into specific measures and projects the Ghanaian government is implementing through institutions like the Development Bank Ghana (DBG), GIRSAL, VCTF, and GIIF to support SMEs. However, these institutions generally have a hand in fostering economic development and supplying financial services to various sectors, including SMEs. Below is a brief sketch of these institutions and how they might aid SMEs:
Overview of Institutions
- Development Bank Ghana (DBG): The DBG likely offers financing options for SMEs, although specific SME-focused initiatives aren't detailed in the data. Development banks commonly provide loans and other financial products tailored to small businesses.
- Ghana Incentive-based and Risk-Sharing Scheme for Agricultural Lending (GIRSAL): While GIRSAL primarily focuses on agricultural lending, it could indirectly benefit SMEs in the agricultural sector by providing risk-sharing mechanisms that entice banks to lend to this sector.
- Venture Capital Trust-Fund (VCTF): The VCTF aims to support entrepreneurship and innovation, which could include SMEs. Normally, it provides equity investments to businesses, helping them grow and expand.
- Ghana Infrastructure Investment Fund (GIIF): GIIF concentrates on infrastructure development, which can indirectly benefit SMEs by creating a more desirable business environment with improved infrastructure.
Other Initiatives
- Microfinance and Small Loans Centre (MASLOC): Recently inaugurated a new MASLOC board, a department involved in providing small loans and microfinance services to bolster small businesses and entrepreneurs.
- Policy and Partnerships: There's a need for policy support to unlock capital for SMEs, as mentioned in discussions involving Ghanaian stakeholders in broader African economic forums. This suggests that policy adjustments and partnerships could be crucial in promoting SME growth in Ghana.
For more comprehensive details on specific projects and measures by the Ghanaian government through these institutions, additional research or direct queries to relevant governmental departments would be required.
- The Finance Minister, Ken Ofori-Atta, has underscored the government's commitment to provide competitive financing for the private sector and promote economic growth among the youth.
- To achieve this, the government has established key institutions including the Ghana Incentive-based and Risk-Sharing Scheme for Agricultural Lending (GIRSAL), Development Bank Ghana (DBG), the Ghana Commodity Exchange (GCX), and the Venture Capital Trust-Fund (VCTF).
- One initiative is the DBG's plan to disburse GH¢1 billion in loans to private sector businesses, particularly small and medium-sized enterprises (SMEs), by the end of the year, aimed at empowering them for growth.
- To attract more investments in the agricultural sector and foster food security, Ofori-Atta plans to employ GIRSAL and DBG Co-Guarantee, offering co-guarantees to the private sector.
- The government also aims to activate a US$11 million fund in collaboration with private sector investors, which will fortify SMEs for development and expansion.
- The Ghana Infrastructure Investment Fund (GIIF) is poised to implement commercially viable solutions, including Agenda 111, the Accra-Tema motorway project, and the development of budget-friendly university hostel lodgings, key to fostering economic growth.
- Ofori-Atta also revealed plans for the Ghana Mutual Prosperity Dialogues, a public-private partnership seeking foreign and domestic investments, driving shared prosperity through job creation, exports, and import substitution.
- Additionally, the government intends to support SMEs through initiatives like the Microfinance and Small Loans Centre (MASLOC), policy adjustments, and partnerships, as evident in discussions at broader African economic forums.
