Business News of Friday, 1 February 2013
The Bank of Ghana (BoG) is considering the establishment of a Revolving Credit Fund (RCF) that will promote existing small and medium enterprises (SMEs) as well as start-ups.
“Job-creation is very expensive and the government cannot single-handedly create enough jobs for the teeming unemployed youth. A part-solution to this challenge is to establish a Public Credit Guarantee Fund/Public Revolving Credit Fund that will promote youth entrepreneurship and support the existing SMEs as well as start-ups,” Mr. Adams Nyinaku, Head of Treasury, BoG, said.
He was speaking at a dissemination seminar on the concluding segment of the 2012 Ghana Knowledge Sharing Project (KSP) in Accra.
The 2012 KSP was implemented at the instance of the government of Ghana by Samjong KPMG on behalf of the government of Korea. Through the KSP, Korea shares its unique development experience with Ghana.
Mr. Nyinaku recognised how South Korea has used SME funding to solve unemployment among the youth. It is reckoned that there are about three million SMEs in Korea, forming about 99 percent of the total number of companies.
They employ 88 percent of the total workforce in Korea and make up of 50 percent of Gross Domestic Product in the manufacturing sector.
He appreciated Korea’s knowledge-sharing programme, which is providing Ghana the required assistance and consultation to improve on the promotion of youth entrepreneurship and support for SMEs -- who are often excluded from access to credit by factors such as high interest rates, expensive collateral demands, poor credit history, and the weak enterprise-management skills of SME owners.
The Ghana Stock Exchange (GSE) intends to launch a second listing market for SMEs and start-ups that show potential for growth. This alternative market is expected to have weaker listing rules and companies will get credit from a fund to pay for pre-listing costs.
Chief Director of the Ministry of Finance and Economic Planning Enock Cobbinah said revitalising the SME sub-sector and promoting youth entrepreneurship is crucial.
He said the public sector should be trained to be more innovative and proactive in its service delivery, using available modern technology “rather than doing business as usual”.
“It is also very important that institutions in charge of the implementation of the newly-introduced Public-Private Partnership (PPP) concept in the country share ideas with other countries that have experience in implementing the concept,” he said.
He expressed gratitude to the government of Korea for its continuous support to the country in the form of concessional loans, grants and technical assistance.
Grants and technical assistance have been provided to Ghana by Korea through the Korea International Cooperation Agency (KOICA), while concessional funding has been provided under the Economic Cooperation Development Fund (ECDF).
The ECDF has funded a number of projects in the country. Among them are the Petroleum Products Storage Depots; the revamping of Tema Oil Refinery; an LPG cylinder manufacturing plant; Buipe-Bolgatanga Petroleum Products Pipeline; and Tema Oil Refinery Residual Fluid Catalytic Cracking Unit.