Gov’t Prepares Stimulus Package For Industry

Alan Kwadwo Kyerematen

Alan Kwadwo Kyerematen, Minister-designate for Trade & Industry, has explained government’s plan to assist the private sector to pursue its industrial transformation agenda to create jobs.

Mr Kyerematen, who appeared before the Vetting Committee of Parliament on Monday, also stated that government would improve the competiveness of existing local industries.

“We are working towards providing a stimulus package for existing industries which will involve us taking a diagnostic study of these companies and identifying exactly what it will take for them to become more competitive, because we believe that if they are able to enhance their competitiveness, they will create more jobs and also enhance our revenue generation.

“The second is the one-district, one-factory initiative. Even if it is important to support existing companies, we recognise that the concentration of the existing companies either by chance or design is in the major cities of Ghana.  The one district, one factory is designed to create massive employment all over the country and secondly to add value to our natural resource base.”

He added that his outfit would identify potential strategic export commodities which would help expand revenue generation and also identify import substitution products that could also help reduce Ghana’s foreign exchange expenditure.

Competitiveness

For starters, he said, government would undertake a diagnostic study.

“Granted that we have 100 companies that are potentially viable but are highly distressed. We, as I sit here now, will not be able to determine the specific support that they need to improve their competitiveness. So the starting point is for us to do an audit of these companies to identify exactly what they require to become competitive. And then we will provide a comprehensive package of support to help them improve their competitiveness.

“Some of the companies may only need marketing support. Some may require an infusion of technology. Some may require additional investment capital. So it is important that we do it on a case-by-case study.”

Refocusing NIB

Indicating that a major challenge for Ghana’s private sector players was tenor to credit provided by banks, Mr Kyerematen said government was considering refocusing the operations of the National Investment Bank (NIB) to provide medium to long-term credit.

“Secondly, we have proposed the establishment of an industrial development fund which will literally do the same thing. We have also talked about reviving and recapitalizing existing financial intermediation which will also do the same thing.”

Cost of one district, one factory project

“As I indicated it is only when a business plan for a particular district enterprise is completed that we will know the cost.

“Once we know the cost, we will have to come to an agreement with the potential investor on what kind of equity debt proportion/government contribution that will be desirable.

“So we are not talking about state enterprises where government says that we are putting ‘X’ million cedis behind a particular project.

Asked how government intends to finance such flagship project of the new administration, Mr Kyerematen stated: “In any particular situation where government determines it is desirable to invest equity finance in a particular project after consultation with the private sector investor, there is an agreement in principle for government to allocate a certain percentage of the one million dollars that is intended now to go into every constituency to support each particular district. The district will be worked out, and this is how government intends to support each particular district.

“Secondly, we are talking about viable commercial enterprises. So even if government has to borrow to be able to provide equity to support a private sector, it’s going to borrow on the capital market to fund infrastructure project, which may not necessarily have commercial returns.  So apart from the commitments that we will be making through these funds that will be going to the constituencies, I am suggesting that we will make sure that both from the Consolidated Fund and from our own innovative ways of raising finance from the capital market, we will be able to support the financing requirements of any of these projects.”

By Samuel Boadi

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