Operation of export fund runs into difficulties
Tongu Area has great investment potentials - Glover
Accra (Greater Accra) 07 May 2002 - Facilitators of the Export Development and Investment Fund (EDIF) have not processed a single application for disbursement since the scheme took-off about a month ago.
Originators of the fund, the Ministries of Trade and Industry and Finance, on Monday expressed concern over the non-disbursement so far but the banks, which were the designated financial institutions to facilitate the process were adamant to co-operate unless measures are put in place to determine who bore the risk in case of non-payment of the loans.
The Ministries, therefore, met the 10 banks involved in the operation of the fund to iron out shared concerns and come out with the best solution to ensure that it became operational as soon as possible. The designated banks involved with the disbursement included the Agricultural Development, Ghana Commercial, SSB, National Investment, Prudential, Cal Merchant, Stanbic and The Trust Banks.
According to shared concern of the banks, the Act that established the Fund made room for an apex body, which is the EDIF Secretariat, to oversee the disbursement of the Fund. Most of the contributions into the Fund came from revenues generated from levies on imports. Some bank officials, who wished to remain anonymous, said most businesses interested in accessing the Fund were start-ups and, therefore, bore very high risks.
Notwithstanding, applicants would pay interest of 15 per cent of which 10 per cent would go to the banks with five per cent going to the other operators. To access the Fund, an applicant would fill three applications, one for himself, one for the banks and the other for the EDIF Secretariat.
This would enable both the applicant and the EDIF Secretariat to monitor the processing of the applications, which must be completed in 37 days. The banks' concern was that despite the 10 per cent interest, the risks were very high and the collateral, such as salt ponds were not good enough.
Until the Ministries agreed to take part of the risks, they were not prepared to facilitate disbursement. Trade Minister Dr Kofi Konadu Apraku, told the meeting that government was worried because the economy was not moving at the pace that would enable it to meet targets.
The establishment of the fund was expected to among other things promote exports and create employment, the Minister said, adding that the current level of unemployment was unacceptable. The Fund, promulgated by an Act of Parliament in 2000, has so far not met expectations.
Dr Apraku said: "There is a state of apprehension and concern among the general public and industries over the inability to move the industrial sector of the country." Dr Apraku noted that it was realised that the major constraint to exports and industrialisation was access to credit and the establishment of the Fund was government's own way of making funds available to the export sector.
"However, there is a level of risk in every business venture", the Minister told the bankers and added that there was the need for them to come to a consensus in order not to establish the belief that the banks always wanted the easiest way out.
He said the Act that established the Fund was specific on the fact that the banks should bear the risks and urged them to ensure that the issue did not degenerate into a political one. Mr Yaw Osafo Maafo, Minister of Finance, observed that the Act had a national character because it was one among many which had a little political difference at Parliament.
He said the Ministry of Finance was, therefore, ready to support the banks and work with the Bank of Ghana to ensure that the Fund became operational. This, he said, was because the government was taxing importers and using the revenue as inflow into the Fund, but "if we are not able to use the monies generated, then it was no use collecting them."
Mr Osafo Maafo, therefore, urged the banks to do their best to facilitate the operation of the Funds and said there was the need for them as professionals to take the decision to pass the test of banking.
GRi../
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Sogakope (Volta Region) 07 May 2002 - Dr Bernard Glover, Executive Director of Cisneros Resort Limited at Sogakope, on Sunday said the Tongu area offered a priceless treasure throne of investment opportunities in the agriculture and tourism sectors in the country.
"I am speaking as a businessman, I am not a politician", Dr. Glover told a seven-member team of investors of the Agriculture Resources Africa (ARA) Limited at a luncheon hosted for them by the North Tongu District Assembly at Sogakope. Present were members of the Tongu Paramount Chief's Council. The team was in the District to assess conditions for investment in large- scale rice production.
Dr Glover told the investors, "those of us who have invested here know that we are sitting on gold, but we have not been able to exhaust all the potentials". Dr Glover pointed to the rich alluvial soil that could support all manner of large-scale agriculture production and inexhaustible waters of the Lower Volta Basin for irrigation, fish farming and tourism.
He cited the example of Tongu Fruits Company, which he said was doing well and exporting fresh fruits to European markets daily. "We want you to be serious with us, we don't want our fingers to be singed again in the rice sector", Dr Glover told the investors. Togbe Kwao Anipati IV, Paramount Chief of the Mepe Traditional Area and President of the Tongu Paramount Chiefs Council, told the investors that they would succeed by investing in the area.
GRi../
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Accra (Greater Accra) 07 May 2002 - The GSE All-Share Index, the key stock gauge of the Accra Bourse, made a thin gain of 0.84 points on Monday to open the week at 1,043.26 points.
British American Tobacco (BAT), Ghana Commercial Bank (GCB) and Super Paper Product Company (SPPC) all made marginal gains to push up the index. The prices of other equities were unchanged. Trading volumes closed at 106,500 shares, on the strength of SPPC, which sold 101,000 shares. BAT, GCB and Sam-Woode Limited, which also made sales, split the remaining 5,500 shares.
In the broader market BAT gained nine cedis at 760 cedis, GCB was up six cedis at 1,801 cedis and SPPC appreciated by one cedi at 367 cedis. The change to date stands at 9.13 per cent.
The market capitalisation closed at 4,059.13 billion cedis. The following are the closing prices of the equities in cedis:
ABL 327
AGC 18,800
ALW 4,300
BAT 760 +9
CFAO 60
EIC 3,520
FML 1,024
GBL 1,000
GCB 1,801 +6
GGL 910
HFC 950
MGL 250
MLC 147
MOGL 18,810
PAF 750
PBC 450
PZ 1,210
SCB 20,500
SPPC 367 +1
SSB 2,910
SWL 275
UNIL 2,916
CMLT 430
GRi../
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