Pass legislation on crowdfunding to protect businesses - John Kumah to parliament

The Member of Parliament (MP) for the Ejisu Constituency in the Ashanti Region, Hon. John Ampontuah Kumah said the private sector can help close the unemployment deficit in Ghana if Parliament can support them pass legislation on Crowdfunding to protect businesses and individuals who want to invest through crowdfunding means.

According to him, some young individuals want to venture into small businesses, but the lack of funds to help them start-up their businesses or keep these businesses running is a huge problem.

John Ampontuah Kumah was addressing Parliament on Youth Unemployment and Job Creation through the Private Sector, when he noted that Ghana must do more to create an enabling environment for entrepreneurs to get easy access to funds for their businesses.

“One of the means to achieve that is through crowdfunding. Mr. Speaker in simple terms, crowdfunding is when businesses or individuals raise funds from a large number of people to finance a new business venture or to expand operations.  In some instances, individuals get to owe equity in the business they invest in,” he explained.

John Kumah also stated that Crowdfunding is “an advanced form of the very good old “Susu” we know. As individuals from one community, we sometimes join our resources to start a business. However, this time around thanks to technology, we benefit from the generosity and goodwill of people we don’t even know.”

One famous crowdfunding project, he indicated, is of Zack Brown, a young boy in the United States of America who went seeking $10 on a crowdfunding platform to make a bowl of potato salad.

He averred that Zack Brown’s project quickly went viral, delivering him $55,492 from 6,911 backers and noted that the crowdfunding can do much for the private sector hence the decision to institutionalize it in Ghana.

“Mr. Speaker, in recent times, I have seen the method being used in Ghana, predominantly on social media and particularly on Facebook to solicit funds for the sick and needy. I am of the strong conviction that if we are to tap into such means of raising capital for our entrepreneurs and small business owners, the problem of lack of capital that small business owners are always faced with will be greatly reduced. Ghana’s leading position in terms of adopting digital finance and mobile money in Sub Saharan Africa provides the country with a better chance at succeeding in crowdfunding.”

He mentioned that there is no law in Ghana backing crowdfunding and that the absence of legislation means that the private sector is handicapped when it comes to looking for financial investment.

John Kumah also averred that in reducing unemployment, there is the need to tap into the 1.3 billion consumer market presented by the African Continental Free Trade Area (AfCFTA).

The Ghanaian market, he mentioned, looks saturated with lots of consumable products on the offering and that “What the AfCFTA does that most small business owners know very little about is it allows them to export their products and services to other parts of the continent where they can generate more revenue which will help in expanding their businesses and subsequently contribute to creating more jobs.”

According to him, the ravaging nature of the Coronavirus pandemic with its corresponding negative impact on the labour market can’t be lost on us as it forced most Ghanaian businesses to lay off some of their workers in spite of these developments, John Kumah said Ghana must not relent on the need to create more jobs and to establish the appropriate environment for businesses to be created and to survive and to achieve this the country must chart a new path on job creation built on the back of the private sector.

The Member of Parliament is currently championing the creation of the “Ejisu Club 100” a project which seeks to create 100 entrepreneurs in Ejisu in the next four years.