Rejuvenated Private Enterprises Federation (PEF) which seeks to be more effective than its predecessor, the Private Enterprise Foundation, will arrange for inexpensive, long-term credits for its members, PEF’s CEO Nana Osei-Bonsu has disclosed.
“We will speedily collaborate with some selected SME financial institutions and some development partners to create a facility that will provide long term credit, credit guarantees and other forms of financing at discount rates to individual businesses who are members of PEF’s member associations.
“By this we hope to break the endemic and enduring challenge of lack of access to affordable credit that has plagued Ghanaian businesses all these years,” Nana Osei-Bonsu told Economic Tribune.
The PEF notes that Ghana continues to experience recurring budget deficits and ballooning government borrowings, which crowd out the private sector in access to credit, while additionally, the prevailing high interest rate regime, deficient infrastructure, the incessant power outages and water rationing are crippling private sector business operations rendering them uncompetitive and unprofitable.
The Association of Ghana Industries (AGI) identified high cost of credit as the number one challenge, hindering the growth of industry, in its latest Business Barometer report. High cost of credit moved from its fourth position, in 2012 third quarter, to the first in 2012 last quarter.
The report noted that the prevailing rigid requirements demanded by commercial banks in the country have resulted in low access to credit by the private sector. Consequently, most SMEs have resorted to non-banking financial institutions whose interest rates are very prohibitive.
Nana Osei-Bonsu said this continuing phenomenon has to be corrected and the only way out is for consistent dialogue between government and the private sector leadership; an activity the rejuvenated PEF will undertake vigorously.
The PEF, whose restructuring, Nana Osei-Bonsu said, has made it attractive and now has gained six new members in addition to its four founding member associations, will work to strengthen member associations and chambers through collaborative engagement and advocacy on issues of importance to them and the provision of flow through services to their constituent members.
PEF will also pursue collaborative activities with members of the insurance association for insurance coverage at reasonable rates to individual businesses that are part of any association or chamber under it, among several other services.
Up till its restructuring, and its re-launching last week, PEF had had a checkered history. The recognition of the need for a strong private sector leadership necessary in improving on the performance of the sector led to the birth of the Private Enterprises Foundation, in 1994, as the apex institution to forge consensus and provide leadership.
However, in arguing for policies that will create an enabling business environment, the various associations comprising the AGI, Ghana National Chamber of Commerce and Industry (GNCCI) Ghana Employers’ Association (GEA) and the Federation of Associations of Ghanaian Exporters (FAGE) sought their individual interests, which made it difficult to converge views or interests.
Nana Osei-Bonsu said in anticipation of a renewed effectiveness of the Federation’s advocacy functions and efficient leadership for the private sector resulting from the restructuring, four new members have joined the Federation as full-fledged members, since October 2012.
These are the Ghana Chamber of Telecommunications (GCT) The Ghana Insurers’ Association (GIA) the Association of Oil Marketing Companies (AOMCs) and the Liquefied Petroleum Gas Operators Association (GLiPGOA).