Credit to businesses has increased by 40% – Minister
Loans that have been given to businesses to expand operations went up by 40% in 2020, Minister for Business Development, Dr. Ibrahim Mohammed Awal, has said.
The minister said it was an important indicator of government support to boost the economy.
“Credit to the private sector rose from GHC 15billion last year from January to August, to GHC 21billion by the end of August this year,” Dr Awal disclosed.
He was speaking at the launch of a global initiative towards economic recovery post-COVID-19 in Accra on Tuesday, October 6.
The initiative is dubbed ‘For Better Business Together (4BBT)’, and the launch was on the theme: ’Post COVID-19 – Rebuilding Global Business Together’.
It is a collaboration between the Ministry of Business Development, the United Nations Development Programme (UNDP), the International Chamber of Commerce (ICC) and the Business for Peace Foundation with endorsements from the governments of Ghana and Norway.
The year has witnessed the disbursement of several stimulus packages by the government to support businesses that were severely impacted by the COVID-19 pandemic.
A wide range of businesses from aviation to hospitality and agribusinesses were crying for bail-outs as the Trades Union Congress (TUC) and the Bank of Ghana (BoG) put the job losses at half a million.
The Ghana Statistical Service (GSS) Business Tracker survey also showed that nearly 85,000 businesses closed down as a result of the plague.
Many firms were not able to meet their financial obligations such as salaries, operation cost and loan repayment with the Ghana Association of Bankers (GAB), estimating that banks in Ghana lost out on GH₵3 billion loan repayment from customers.
Government, therefore, had to step in with a soft loan of GHC 1billion for small and medium scale enterprises.
The government earmarked about GH₵2 billion guarantee fund for over 100 large-scale firms to access more capital for operations.
Dr Awal believes the “impact of the pandemic on the economy is lower” due to the “bold steps that were taken by President Nana Akufo-Addo”.
Despite the pandemic, Ghana’s GDP is projected to be 2.5% by the end of the year “while other countries are shrinking”, Dr Awal noted, adding, “Ghana is still attractive for investors”.
Presidential Pitch goes global
The minister further revealed that the Presidential Pitch Programme (PPP), a business support initiative of President Nana Addo Dankwa Akufo-Addo, will expand to other African countries.
“In February next year, we are going to have the Presidential Pitch going beyond Ghana. It will be replicated in Tanzania, Rwanda, Nigeria and Kenya,” he expressed excitement.
The idea is to build entrepreneurship driven young people to create jobs and contribute to the Ghana Beyond Aid agenda.
The Ministry of Business Development has supervised three seasons of the business competition.
A 26-year-old entrepreneur from Bongo in the Upper East Region won the overall prize in the last edition, taking home a grant of GH¢100,000.
In season one, the winner, an agro-processing entrepreneur at the time, won a cash prize of GH¢50,000 and a personal donation of GH¢25,000 from President Akufo-Addo.
The joint winners of season two were into the manufacture of sanitary pads using banana and plantain fibre. They received a cash award of GH¢60,000 and an additional GH¢40,000 from the President.
During the first two seasons, 20 young entrepreneurs were awarded cash prizes of GH¢1 million.