The Association of Ghana Industries (AGI) has underscored the need for the country to establish Small and Medium Enterprises (SME) equity fund to support the growth of companies and spur exports.
The AGI had already taken steps to establish an industrial development fund and, therefore, the association was ready to partner central bank and the Ghana Bankers Association to ensure that the proposed equity fund goes a long way to support critical areas of the sector” the President of the association, Mr James Asare Adjei said in Accra.
This follows a media report that the Bank of Ghana (BoG) and the Ghana Bankers Association are in discussion to establish GH¢200 million equity fund to support SMEs in the country.
“This equity fund, when established, will go a long way to support our indigenous entrepreneurs to grow, expand and retool their businesses, therefore, the AGI commends the two entities for this giant initiative,” he said.
He said that the association was working towards establishing an export desk that would focus on developing Ghana’s exports potential in order to ensure that businesses thrived in the country.
Responding to its source of funding for the industrial development fund proposed by the AGI, Mr Asare-Adjei said the association was in discussions to bring all stakeholders in the industry on board to mobilise a huge sum of seed capital to establish the fund.
According to him, if the government had worked with the 2014 budget proposal to set up a GH¢50 million SME development fund, the situation would have been different.
He said that the AGI’s proposal made to the government to establish a GH¢1 billion industrial fund to address limited access to financing and reducing the cost of borrowing for the sector had also not been addressed.
He said processes were far advanced to commence the association’s SME bank that would help propel AGI’s development and that of SMEs and the industry as a whole in the years ahead.
Contribution of SMEs
The SME sector globally contributes significantly to the production of goods and services, and creation of employment of many developing countries, including Ghana.
According to research, SMEs have been noted to provide about 85 per cent of manufacturing employment and contributes 49 per cent to overall Gross Domestic Production (GDP) in the country.
Despite these revelations, the sector, however, is faced with many challenges, with the most pressing ones being access to finance and low degrees of innovation as key obstacles limiting growth of the SMEs in the country.