Accra, March 18, GNA - Government must adopt a policy that would seek to establish a central agency for channelling funds to Small and Medium Scale Enterprises (SMEs) to enhance their contributions to the country's socio-economic development.
Dr Sam Mensah, Chief Executive of SEM Financial Group, who made the call, said such a step was necessary to improve access to credit for SMEs for their operations.
He said the lack of a comprehensive and coordinated approach so far to the financing of SMEs did not augur well for the country's long-term growth.
"There is the need to bring together into a single plan all the major policies on SMEs financing scattered in budgets over the years into a single document that could make support easier."
He was speaking at a business luncheon organized by the Ghana National Chamber of Commerce and Industry on the implications of the 2004 National Budget for the private sector.
Dr Mensah suggested that that the Government could strengthen the Eximguaranty Company Limited to play the lead role as the main body from which all SMEs could access funds for their projects.
He lauded the 10 billion cedis that the Government had earmarked in the budget to support the activities of Eximguaranty Company. He said although the amount was small to meet the needs of all SMEs, it should mark the beginning of a process to harness the various micro finance schemes as well as resources in the hands of various other agencies involved in micro financing into a central pool to make for easy assistance.
Dr Mensah stressed equity support for SMEs as well as a strong enterprise support, especially in the areas of financial management and accounting to give them the necessary backing.
He said as far as the business community was concerned the tax incentives and exemption in the budget provided the necessary platform to engender growth.
"These incentives coupled with a good chance of low inflation in the year and stabilized interest rate should inspire and stimulate business activities."
Dr Mensah, however, warned against the heavy reliance on donor funding to implement programmes in the Budget, saying that such dependence provided the country with a false sense of security and distorted flow of the implementation of programmes when expected funds did not flow in.
Mr Yaw Agyemang-Manu, Deputy Minister of Finance, said the Government would not sacrifice the macro-economic gains made on the altar of political expediency in an election year.
He said a Cabinet Sub-Committee had been put in place to oversee the implementation of the various programmes in this year's Budget. Government was in addition monitoring its expenditure as well as strengthening its revenue mobilization to ensure that the progress so far made was not derailed.
Dr Joseph Abbey, Chief Executive of Centre for Policy Analysis, said inflation was bound to fall if agriculture performed well this year. 18 Mar. 04
