Government is optimistic that the commencement of operations of the Development Bank Ghana will help support the venture capital and private equity industry to grow start-up businesses and small businesses.
This comes on the back of the launch of the Ghana Venture Capital and Private Equity Association, which seeks to support investments into private businesses for job creation and national economic development.
The Venture Capital Trust Fund has for 15 years contributed to the development of Ghana’s economy by providing funding for over 60 start-up businesses and Small and Medium-sized Enterprises in the country.
The setting up of the Ghana Venture Capital and Private Equity Association is to intensify the efforts of the venture capital and private equity industry by supporting investments into private businesses for job creation and national economic development to catapult the growth of the SME sector.
The role of the association is to provide a strong voice for industry practitioners, drive the growth of the industry, and develop the capacity of industry players, so they can safeguard investors and investees.
But how has the industry been faring all these years? CEO of the Venture Capital Trust Fund, Yaw Owusu-Brempong lamented the lack of funding for his outfit which makes its work difficult.
“It’s very unfortunate that the very institution that was set up to provide funding to SMEs has a problem of funding. This is so because when the fund was established, we were supposed to get 25 percent off the National Reconstruction Levy and that was supposed to become our permanent source of our income. Unfortunately, in 2006, the very year that we started operating, that Levy was abolished. Our second source of funding has been budgetary allocation from the Finance Ministry, and even that has been on and off. So we are still in discussion with the Ministry to get us a permanent source of funding so that we can deliver on our mandate.”
Government, on the other hand, plans to help solve this issue. Director of the Financial Sector Division at the Ministry of Finance, Sampson Akligoh, speaking on behalf of the Finance Minister, Ken Ofori-Atta at the launch of the Association said the Development Bank Ghana will help support the venture capital and private equity industry to grow start-up businesses and small businesses.
He said, “We are going to make sure that as a country, we have a government-backed private equity fund that supports the ecosystem. We also hope that the development bank will anchor some private equity and venture capital firms across the country that will support real growth.”
Trust Fund to partner fund managers to bridge unemployment gap
Meanwhile, Yaw Owusu-Brempong says his outfit is considering partnering with fund managers to support start-up companies in a bid to promote government’s agenda of creating more entrepreneurs to resolve the high unemployment rate in the country.
“Currently, youth unemployment is very high in the country, and we believe that the youth can get the opportunity to venture into entrepreneurship that can reduce the problem significantly. Venture Capital can actually partner with a lot of fund managers to fund start-up companies so that we can create a lot of entrepreneurs.”