Empretec grants over 385 million cedis to businesses

Central bank urged to reduce rediscount rate

Cape Coast (Central Region) 25 June '99

 Empretec Ghana Foundation, a non-governmental organisation has granted a total of 385.2 million cedis to 43 businesses under its technology and enterprise development fund (TEDF) provided by the World Bank.

It has also assisted more than 300 owner-manager and staff in Takoradi, through various management seminars, entrepreneurship development workshop, counselling service and credit facilities.

Mr Kingsley Deteah, regional manager of Empretec, made this known at a seminar organised by the foundation for 20 entrepreneurs in the Central region at Cape Coast on Thursday.

Mr Deteah noted that most small businesses are constrained not just by inadequate funds to establish ventures or expand operations but by low level technology and inadequate managerial competence.

In view of that, he said Empretec has taken upon itself to provide assistance to small- and medium-sized businesses in all the regions to help them grow.

The regional manager said Empretec would constantly strive to provide new opportunities that would create value for its clients and entrepreneurs in general.

He said under the TEDF project, 65 per cent of the cost of consultancy and technology is provided by the fund without any interest, and 35 per cent by the entrepreneur.

Mr Deteah said the fund provides assistance in all production areas except in primary agriculture, trading, and real estate development.

GRi../

Accra (Greater Accra) 25 June ’99

The Bank of Ghana was on Thursday asked to further reduce the rediscount rate to make the cost of borrowing cheaper.

Private and Public sector officials made the appeal at the Third General Meeting of the Private Enterprise Foundation (PEF) in Accra. The meeting was to discuss the foundation's activities in 1997 to 1998

PEF - an umbrella advisory group whose functions include acting as a forum of interaction between government and the private sector - participates in the formulation of policies that affect the private sector and evaluates and reviews government policy that impinge on it.

Mr Peter Pepera, Deputy Minister of Trade and Industry, said the call is imperative if government's commitment towards maintaining a stable macro-economic environment, low inflation, stable currency and a healthy external balance of trade are to be meaningful and implemented.

Mr Pepera said government will exercise strict budgetary and expenditure monitoring mechanisms.

He urged PEF and the private sector in general to focus on the use of technology in the process of attaining international competitiveness.

He said studies have shown that international competitiveness depends "not so much on our resources in terms of natural endowment and labour costs, but on the quality of human resources and capacity to absorb, use and improve upon new technologies."

"Ghanaian enterprises should begin investing seriously in new technologies, particularly information technology and training, if they are to stay in the new global environment".

Mr Pepera advised industrialists and entrepreneurs to make full use of the ECOWAS Trade Liberalisation Scheme, saying that the bottlenecks in the scheme are being addressed at both community and state levels.

Nana Yeboa-Kodieh Asare II, President of PEF, in his Annual Report, said the lending rates of the banks should be fixed at 15 per cent since the current interest rates are high.

"We, (however), hope the continuing favourable trends in inflation will lead to yet lower borrowing rates to enable the private sector to be totally happy with the declining trend in the rate of inflation.

He said inflation has declined from 32.7 per cent in 1997 to 9.4 per cent at the end of May, describing it as "a very impressive performance."

The Central Bank has also reduced the rediscount rate from 45 per cent to a rate of 27 per cent in April.

"In spite of these developments, lending rates continue to be considered as high. At the current rate of inflation, 9.4 per cent, we call for the lowering of interest rate further to about 15 per cent".

On the exchange rate, Nana Asare said the trend has been favourable in the last one-and-a-half years, as the rate of depreciation of the cedi has been slow.

He said the relative stability of the cedi, which depreciated by only 4.1 per cent in 1998, enabled them to manage their costs effectively.

However, Nana Asare said, the current trends of the foreign exchange market have made them a little uncomfortable.

"The Cedi is estimated to fall in value to 2,515 to the dollar, reflecting a depreciation rate of 6.7 per cent which is about double the rate of depreciation recorded in the same period in 1998.

"This is particularly worrying in view of the likely depreciation expected as result of the fall in export revenues because of the declining prices of our major exports - gold and cocoa.

"We hope that measures to halt such a decline will be introduced and implemented".

Nana Asare criticised the performance of the public service, especially the long delay associated with their operations, and said though no study has been done on the assessment of public services, the amount of business time spent in dealing with the public institutions is still significant.

"One area of public service which is of concern to the private sector is Customs. The clearing of goods at our ports continues to be considered as very cumbersome, thus creating unnecessary delays and increased costs to importers.

"We have observed that the various measures being taken to speed up customs procedures have not yet impacted positively on the speedy clearing of goods."

Nana Asare expressed regret that efforts by PEF to meet CEPS to iron out problems confronting importers and enterprises was met by a snub by CEPS.

He called on industrialists and manufacturers to aim at producing quality goods at competitive prices in order to survive.

GRi../