Towards ensuring that local industries are able to expand operations, the Association of Ghana Industries (AGI) has called on government to consider making equity capital injection into viable companies.
Currently, among key problems facing industry in Ghana is the lack of capacity of local companies to expand operations due to unavailability of the capital required.
Speaking at the Association’s 59th Annual General Meeting, the President of AGI, Dr. Yaw Adu Gyamfi indicated that most of the companies in the industry are to cash trapped to engage in direly needed expansion.
Dr. Gyamfi said, “We believe that the time has come that government, instead of asking industry to go to the banks to borrow money, rather should look at it from a point of view of taking up equity. By this, the ownership and governance would be run by both government and private investor.
“The request to government is that if government basically can take equity interest for instance, government can bring in US$ 1 million in the company and take ownership of the company for at least 30 percent now, and when things go well, then refund can be made,” he stated.
The President of the Association noted that although there is a stimulus package, it is a loan which comes with interest payment.
Although government has fully introduced the National Industrial Revitalization Programme with a stimulus package for industries that have been identified as viable, the Association has described it as currently not very impactful.
The Association is of the view that if the stimulus package had worked to the extent that they had expected, perhaps industry would have been far better positioned today than before.
As at December 2018, GHc 237 million had been disbursed to 16 companies, translating into an average support of GHc 14.81 million. But this is well short of the total amount promised for disbursal by government. Another 35 companies have been considered for support under the initiative however.
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