Business News of 2013-12-02

Youth group welcomes SME Fund

…urges effective implementation

The Youth Economic Dialogue (YED), a youth advocacy group, has commended the government for proposing to set up a GH¢50million SME Fund to address limited access to financing and reducing the cost of borrowing for small and medium enterprises in Ghana.

YED further indicated that there is a growing amount of evidence that the most serious obstacle hindering the growth and development of SMEs is the cost of credit.

While agreeing that this initiative is in the right direction, the group drew the government’s attention to the country’s abysmal track-record of effective implementation of such programmes and policies since the days of the Structural Adjustment Programme.

These points were contained in statement jointly signed by the country director, Nana Yaw Adutwum, and the policy analyst, Davis Adu-Larbi.

According to the statement, in order to avoid what was witnessed during implementation of the Business Assistance Fund -- which was similarly set up to provide direct government lending to SMEs but was widely seen to have been abused politically, with a significant amount of the loans going to perceived government supporters -- the group recommends that the whole quantum of the funds be administered by a banking institution with nationwide coverage and supervised by the National Board for Small Scale Industries (NBSSI).

“In our humble opinion, this will enhance debt recovery and promote transparency and inclusiveness,” the statement said.

The group welcomed the proposed establishment of three Business Incubation Centres in Accra, Kumasi and Tamale under the auspices of the NBSSI.

It encouraged the youth to take advantage of this opportunity in order to commercialise their innovative skills as well as create job opportunities for others.

“We strongly want to take this opportunity to remind government that our group will monitor the implementation of this facility closely,” the statement further stressed.

It also put forward some recommendations for implementing the research and innovation fund proposed in the 2014 budget. These include increasing the fund’s resources by soliciting support from the private sector.

It said the modalities being developed should include measures to encourage collaborative research between industry and faculty members, which will lead to the production of research works that are not merely academic exercises but also relevant to industry.

It further recommended decentralising the scheme. “The current structure that exists in the country’s universities (Research and Conferences Committee) can be used, with a National Oversight Committee made up of technical and private sector managers,” it said.

It added that some of the funds should be paid to all lecturers as book allowance to aid faculty members keep up with modern and more relevant trends in their various fields of specialisation.