Business News of 2017-06-19

50 AGI companies selected for government stimulus package

50 Association of Ghanaian Industries (AGI) companies have been selected to be examined by government for a stimulus package. Upon examination, 30 companies at various levels of financial distress will be supported in four financial packages. According to Eddy Safo Kwakye, a member of the technical support group mandated to do the diagnostics on the companies, the selected companies will be given any of the four financial supports after the analysis of their state is completed. 20 experts with all kinds of expertise have been selected to conduct the survey. The package is supposed to start by September when a proper grouping or needs assessment has been done. The stimulus plan has been necessitated by high interest rates among others that companies face. A recent report on non-performing loans indicated private sector is the leading culprit. The Chief Executive Officer of slid industries manufacturers of hair products MVP and vice president of the cosmetic and toiletries industry, Sandy Osei Agyeman, said none performing loans will sit high on the books of banks if the rates continue to hover around 26 percent. It is against this backdrop that government promised this package as industries lay workers off and moves towards bankruptcy. “So far I have laid 50 percent of my workers off,” Sandy Osei Agyeman added. While some industries see it as a game changer, many other industries believe the current challenges bedeviling companies in Ghana go beyond capital injection. The MVP Boss concurs “our integration in the sub-region is problematic, meanwhile we have a big market in West Africa I can hardly go beyond Ghana with my products without bottlenecks” In May 2017, the General Secretary of the Ghana Federation of Labour who is also chairman of TGLEU Abraham Koomson told Joy news a stimulus package will be a total waste. “If government says they are going to give us a stimulus package, I think they are making a serious mistake. It will not yield any positive results. At the end of the day, because of the smuggling and counterfeiting, they cannot compete. So we want government to address the issue of smuggling,” he explained The Minister for Trade, Alan Kyeremateng in the first quarter of 2017 hinted a diagnostic study on existing indigenous companies that are in distress to ascertain what stimulus packages it can offer them to revive their operations to make them competitive will start. It is not clear however how much government is willing to give each company.Source: myjoyonline.com
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