Economy dominated by risk averse entrepreneurs – Tara

The chief director at the Finance Ministry, Major S. Tara has indicated that the economy is is dominated by entrepreneurs who are risk averse, which he reckons could hamper the growth of a strong economy.

According to Major Tara, it is important for entrepreneurs to embrace risk by taking advantage of opportunities in the financial markets.

He explained that the success of the private sector all over the world depends on appropriate financial mechanisms through which many multinational companies have grown from one man, family owned businesses into big multinationals companies.

“The owners of this small enterprises or companies by taking full advantage of the opportunities in the financial markets invited other stakeholders on board, expanded by taking their capital, improve corporate governance standards and acquired new skills and better management to grow,” he said.

“In Ghana, we need to adopt this culture where risk is shared with others who are willing to share in our dreams. Over the years, the economy has been dominated by risk averse entrepreneurs and we need to move away from this culture”.

He expressed worry about the country’s desire to continue to finance development projects through the traditional concessionary means.

“The drying up of external concessionary resources with its attendant effect on the performance of the real sector of the economy and the resulting global economy, recession and poverty call for an emerging and frontier economies including that of Ghana to find innovative ways to mobilise resources internally and externally.

Financial markets and institutions therefore provide the best forum for the mobilization of savings and investments that will give our economy the strength to grow and the resilience to withstand external shocks”.

The country’s economy, the Chief Director, said, is transitioning into a higher middle income status but is faced with paradoxes, including its exposure to the capital markets with intense focus on the short term challenges which sometimes lead to negative reviews by observers in spite of its bright prospects as well as the country’s desire to continue to finance development projects through the traditional concessionary means.

A strong financial system, he said, is a necessary ingredient for a growing and prosperous economy, adding that not only does it reduce economic vulnerability by providing people and businesses with the ideal space to trade, innovate, manufacture, and manage but also facilitate risk taking, risk sharing and risk transfer.

Government, he said, has put in place measures to promote the culture of risk taking, and is committed to creating an improved business environment as well as repositioning the state to productively deliver support to SMEs.

“It is government’s policy direction to transform this economy from an import dominated economy into an export driven one”.