Business News of 2014-08-06

Lack of private sector dev’t fund hampering business growth

The absence of a private sector development fund to supplement government efforts to provide funds to support companies remains a major constraint for financially distressed businesses.

Currently, many businesses bank their hopes on the Export Development and Agricultural Investment Fund (EDAIF) for financing, although foreign companies operating in the country cannot have access to it.

The outgoing Minister of Trade and Industry, Mr Haruna Iddrisu, who lamented the absence of this supplementary finance body at the inauguration of a task force to deal with pirated textile on the local markets, said the situation was worrying.

“Let me use this opportunity to lament the absence of a private sector development fund, which means that if any Ghanaian co-operate entity is in distress financially, other than EDAIF, it does not have recourse to any financing option mechanism available to it,” he said.

He added that the situation, although worrying, required a national dialogue to discuss how to address the challenge of financing for business. “I find that very worrying and appropriately we will all discuss how to remedy this. Access to credit and cost of credit remain a major economic headway for many businesses,” he said.

According to Mr Iddrisu, Akosombo Textile Limited (ATL) was currently in financial distress, as it was feeling the full brunt of the misfortunes of the local textile industry.

“ATL is in financial distress of some sort. It employs Ghanaians, it produces in Ghana, yet we do not have a mechanism to be able to go to the aid of ATL because it is foreign,” he stressed.

The reconstituted textile task force inaugurated by the minister comprised representatives from the Ghana Police Service, National Security, Ghana Chamber of Commerce and Industry and local textile companies, among others.

It is headed by DSP Samuel Naa Musah from National Security. The minister charged the members to identify the pirated designs on the markets and subsequently seize them for disposal.

The country, he also explained, would strengthen the Customs Division of the Ghana Revenue Authority (GRA) to seize pirated designs at the ports of entry. The ministry, he said would also engage Ghana’s embassy in China and the Chinese authorities in Ghana to check pirating of Ghanaian textile designs, as China is touted to be the originator of the pirated designs.

“We will also reward informants who give leads to arrest ‘big fishes’ engaged in the pirating of local textile designs,” he added.

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