Support Private Sector - Aliu

Vice President Aliu Mahama on Tuesday asked the ECOWAS Bank for Investment and Development (EBID) to assist the private sector to secure long-term loans in line with government's vision to create jobs and wealth through the private sector.

He commended the Bank's guarantee to the Ghana Commercial Bank (GCB) and the National Investment Bank (NIB) to source a 40 million-dollar loan from the HSBC Equator Bank, US, saying more of such facilities should be arranged for other financial institutions.

Vice President Mahama was opening a meeting at which an EBID delegation led by Mr Christian Adovelande, President of (EBID), is briefing more than 30 representatives of the private sector and ministers of state on the operations of the Bank and how they could utilise opportunities it offers.

Vice President Mahama noted that securing long-term credit schemes was one of the major constraints of private sector development and this was undermining the government's vision to create wealth and reduce poverty through the sector.

"It is in the efforts that we, as a Government, are making for the provision of medium and long-term loans to the private sector that have brought you, our esteemed guests here," he said, and tasked the Ministry of Private Sector Development to facilitate resource acquisition.

The vision of EBID, the funding institution of the Sub-Region, is to contribute towards the creation of conditions for the emergence of West Africa that is economically strong, industrialised, prosperous and fully integrated internally and within the global economic system.

EBID has an authorised capital of 750 million dollars and a call up capital of 262.5 million dollars. About 66.67 percent of the capital is apportioned to member states with the rest going to non-members.

Vice President Mahama said the government had prioritised agro-industry as a means of speeding up the creation of jobs and wealth.

"We believe that we can accelerate the production of local raw materials to meet our consumption needs as well as serve as a source of inputs for agro-based industries, thus, the President's Special Initiatives for Garments, Cassava Starch and Oil Palm."

The rapid and successful implementation of the initiatives, he said, would significantly impact on non-traditional exports.

Vice President Mahama gave the assurance that the government was addressing the problem of low technical capacity in the private sector through a skill-training programme by the Ministry of Employment and Manpower Development for unemployed and underemployed youth.

Efforts, he said, were ongoing to help improve corporate governance.

He commended the Ministry of Private Sector Development for procuring a 50 billion-cedi facility to improve the nation's food security and for facilitating another 21 billion cedis Swiss loan for on lending to small and medium enterprises.

The Sector Minister, Mr Kwamena Bartels, who talked about the crucial role the private sector had to play to ensure a flourishing national economy, said the meeting was important to create the requisite awareness on the EBID.

He said Ghana did not really benefit from the ECOWAS FUND, which had now been transformed into the Bank, because its activities were unknown.

As a result, about 80 percent of its support went to Francophone countries.

Mr Bartels said: "Private Sector Development is necessary to mitigate the threats of dwindling foreign direct investments to Africa in general and more specifically to Ghana, which suffered a 26 percent drop in FDI during 2001.

"The higher revenues from expanded private sector activities will enable the government to invest more in social services like schools, primary health care, potable water etc."

Mr Bartels said with the guaranteeing of the 40 million-dollar loan from the HSBC Equator of the US for the salt industry and agro-processing, there were assurances that more assistance from that bank would be provided to support the President's Special Initiatives in palm oil, garments and textiles industries.

Mr Adovelande said EBID operates through two subsidiaries: the ECOWAS Regional Investment Bank (ERIB) for the promotion of the private sector and public commercial sector and the ECOWAS Regional Development Fund (ERDF) devoted mainly to the public sector and poverty alleviation programmes.

ERIB, whose objectives include supporting projects aimed at creating infrastructure that enhances regional integration or any other public and private sector development project, has an authorised capital of 500 million dollars, with a called up capital of 125 million dollars.

ERDF grants loans for the financing of infrastructure and economic and social projects in member countries, financing of feasibility studies and special community programmes, among other activities.

It has the same amount in authorised capital and called up capital as its counterpart.

Senior Minister J. H. Mensah, who chaired the meeting, said it was high time ECOWAS made more commitment towards economic advancement to reflect its name rather than on issues of military and security.

He noted that economic progress would be limited without peace and security, but said the focus of the regional body should be on improving the lot of its 250 million people economically.