The government has secured 40 million dollars from the World Bank to financially resource the Venture Capital Trust Fund (VCTF) to support private sector businesses.
Finance Minister, Ken Ofori-Atta, disclosed this during the inauguration of the reconstituted board of directors of the VCTF, and said the move was to build the financial capacity of the organisation to provide long term funding for the private sector.
“Now that the board of the VCTF has been inaugurated, the release of the funds to the organisation will begin in the next couple of months,” the Finance Minister said.
The eight-member board chaired by Mr Kofi Yamoah, former Managing Director of the Ghana Stock Exchange, has other members as Deputy Minister of Finance, Dr John Ampontuah Kumah, Mr Yaw Owusu-Brempong, MrsKosiYankey-Ayeh, Mr Antonio Kisseih, Mrs Mabel Nana NyarkoaPorbley, Mr Brian Frimpong and MrsEfuaAppenteng.
Mr Ofori-Atta said the 40-million-dollar funding for the VCTF was under the Ghana Economic Transformation Project aimed at promoting private investments and firm growth in non-resource-based sectors of the economy.
“I am also happy to indicate that, the VCTF, under the project, is entrusted with the mandate of providing venture financing for early stage businesses and strategic industries with an investment capital of $40 million. This is a testament of government’s firm faith in the potential of the VC/PE ecosystem to lead Small and Medium-scale Enterprise development and build unicorns for the country,” he said.
He said the new funding to the VCTF would help the organisation to attract more funding to support the private sector.
In the last decade, the Minister said VCTF had created seven funds, with investments in over 60 companies and having leveraged additional US$89.7 million from invested capital of US$29 million, adding that sustainable direct jobs created from these investments were over 3,400 with additional 13,500 indirect ones.
“Yet, a lot more can be done. As per BoG’s data, the percentage share of 3-5 year loans and above five-year loans in 2018 were 18.1 per cent and 15 per cent respectively. A 2019 report by PWC established a funding gap of GHS115 billion to the services and manufacturing sectors of our economy by 2025,” he said.
He said Ghana was expected to attract more of such investments, especially with the financial sector reforms carried out by government, which had contributed to making Ghana a business-friendly destination to international investors.
Mr Chairman, the new Board is mandated to position VCTF to help increase the total value of investment attracted into the country from the current 22 per cent to 35 per cent.
Mr Ofori-Atta entreated the new board to build a strong, transparent and effective institution.
“With the diverse backgrounds and skills set that you all bring to bear, I am confident that your tenure in office will be celebrated with remarkable achievements,” he said.
Mr Yamoah in his remarks commended the President, Nana AddoDankwaAkufo-Addo, for the confidence reposed in them.
He pledged that the board would work hard to financially reposition the VCTF to be able to deliver on its mandate.
The VCTF was established in 2004 as part of the commitment of government to support the private businesses with long term patient capital for growth, wealth and job creation.
BY KINGSLEY ASARE