Government has set aside over GH¢100million under the “stimulus package” it announced in the 2017 budget, aimed at reviving distressed companies.
“These are companies that struggled during the past four years under ‘dumsor’. It is about a GHc100million and we are hoping to start in July,” Minister for Business Development, Ibrahim Awal, told the B&FT.
“These are for local businesses and we need to get them revived so they can be back to their glory days. These companies laid off a lot of workers at the time and so they have to be revived, get them working again so they can employ, not just those who were laid off, but new people,” he said.
The money will be expended under what the new government calls the National Industrial Revitalisation Programme.
Beneficiary companies, Mr. Awal said, will be selected based on a rigorous vetting process.
The Association of Ghana Industries (AGI) has also said that government should not simply doll out the monies to companies and go to sleep, but should include in the package a strong mechanism to assess its impact on jobs and economic growth.
“We are proposing to the minister and his team, that we want to be involved to create a monitoring and impact assessment wing that can thoroughly say after two or five years of investing X amount of money in my company, I have created X number of jobs, I grew by this and this is the impact on the general economy,” Humphrey Ayim-Darke, a Vice President for AGI, told the B&FT in March.
Many companies across several sectors, from media, telecoms, banking, manufacturing, among others, laid off workers due to the debilitating effect of the power crisis on their operations in the last four years.
In its business barometer survey, covering the first quarter of 2015, the AGI indicated that Small and Medium Enterprises spent between GH¢1000 and GH¢6,600,000 on fuel in just five months — from October 2014 to March 2015.
Also, in a report launched in May 2015, that assessed the impact of the power crisis on SMEs, the Institute of Statistical, Social and Economic Research of the University of Ghana (ISSER) said its “crude estimates” suggested the nation was losing production worth US$2.2million per day, or US$57.2million per month.
“These figures translate to around 2 percent of national output lost due to the electricity crisis. For obvious reasons, the chain effect is more serious,” the institute said.
With the increasing cost of production, companies that were hoping to expand had to halt their expansion plans, thereby placing a freeze on employment.
Coupled with increased taxation, reduction in government expenditure, increased utility prices, currency volatility, rising inflation and interest rates, businesses were stifled and had to resort to laying off both core and non-core staff in order to stay afloat.
National Entrepreneurship and Innovation Plan (NEIP)
In pursuit of government’s agenda to develop businesses, Mr. Awal stated that government, will soon launch a programme, dubbed National Entrepreneurship and Innovation Plan (NEIP), to help equip Small and Medium Enterprises (SMEs) with basic business skills.
“You know we have a lot of small businesses in this country. The SMEs form about 90percent of businesses in this country but they lack access to credit and skills and that is why the rate of failure is so high on the SME side,” he said.
Noting that about 75percent of businesses collapse even before they get to their third year, government, in partnership with development partners, will train 1,000 graduates who will help equip small business owners with basic skills, so that access to finance can become easier to them.
These graduates, to be known as agents of business development, will be visiting small business owners and helping them prepare business plans, basic accounting books and position them for growth.
Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.