AGI CORPORATE FORUM ENGAGES MINISTER OF FINANCE

Date: 2021-07-01

The Association of Ghana Industries (AGI) hosted Honourable Ken Ofori-Atta, Minister for Finance, at the AGI Corporate Forum at Movenpick Hotel in Accra. 

The forum is a platform that brings together a select group of top Chief Executive Officers (CEOs) to engage high-ranking government officials to discuss cutting-edge issues in the business environment like macroeconomic policies and to build support for improvement.

The President of the AGI, Dr. Yaw Adu Gyamfi, opened the forum and thanked the Minister for coming. He also expressed appreciation for the companies’ CEOs for making time to attend the programme and indicated that the Corporate Forum is a result-driven, solution-oriented strategic policy meeting point on the calendar of the Association which engages only key government officials on topical issues of policies.

He said COVID-19 had brought hiatus to gatherings "but we are glad that gradually, we are opening up for business and we expect to fully conduct our business as before."

He added that, "Since industries operate within an environment and influenced by public policies, it is very imperative that we constantly engage policymakers to influence government decision-making. "We believe these engagements will draw government attention to some of the challenges and accelerate efforts to minimise costs and burdens on private business and the general economy with regard to government taxes, regulations, and policies."

The chairman for the occasion and the sponsor of the event, Mr. Gopal Vasu, Managing Director of M&G Pharmaceutical, remarked that “the Corporate Forum offers us, industry leaders, the space to reflect and to share our respective concerns”.

Mr. Vasu continued that as an operator in the pharmaceutical space, his company was very grateful for the 10-point industrialisation agenda of the government, which includes the development of the pharmaceutical industry and "we know that all other sectors are covered in a way".

"We are very anxious to see government intervention in financing and we are glad the Government has rolled out the CARE programme to support industries. To us, we see this as a very important instrument that will accelerate the growth of the industry. It is, however, important to point out that high cost of credit continues to be a challenge and also lack of medium to long-term financing is really a menace to industry. Therefore, we are highly anticipating the establishment of the proposed Development Bank of Ghana to address these bottlenecks."

Mr Vasu, thus, commended the move to establish the Development Bank of Ghana. He then appealed to the Finance Minister and, for that matter, the government, to note that the current tax regime did not inure to the benefit of industry.

Mr Vasu continued that industry appreciated the fact that tax constituted a major source of revenue for the government but industry players had the conviction that some of the tax policies, including the 50% benchmark reduction and straight levy, did not motivate local production enough. 

"Therefore, I appeal to the government to take a second look at the issue in the next mid-term budget review," the MD of M&G Pharmaceutical said.

Mr Ofori-Atta, who was the Guest Speaker for the occasion, said the development bank would become operational by the end of July, this year.

He said the rationale, business model, and objective for the establishment and critical role of the development bank in the banking sector and national development agenda were significant issues. 

He said the Government of Ghana decided to establish the development bank under the Bank of Ghana as a key instrument in the pursuit of economic transformation and job creation under overall national strategy of Ghana Beyond Aid.

"The rationale for the Bank and the principles will guide us design a lot of development. It envisages and reflects new thinking on development finance as well as lessons from class experiences and current international best practices of development banking underpinned by good corporate governance and sound business operations and the question that comes is what about NIB and ADB?" the Finance Minister asked rhetorically.

"I guess you know that interest rates went crazy and everyone wanted to be a universal bank to be able to take deposits and the government itself did not have the resources to continue to feed the Bank with the type of long-term capital that was needed for NIB and ADB to continue with their original roles as were perceived so that then began the demise of those banks.

"And we need to redirect what NIB and ADB will become so that they also have the needed capital to be able to give long-term financing, as the Chairman just mentioned, at least, in the areas of industry and also in the areas of Agric and agribusiness. 

"If you look at the issue of Ghana beyond Aid, it truly has three pillars. The first pillar that looks at who we are as Ghanaians in terms of ethics, values, discipline, hard work, sacrificing nationalism as a pillar in which we need to confront and begin to think about if we want a new stage that is progressive.  

"The second pillar is one of trying to get a consensus amongst all of us a CSOs, Parliamentarians, politicians, citizens, as to a broad consensus of where we, as a nation, are going so that we can argue on the margins, not on every issue and therefore without one language, we are not able to learn and pursue a committed pack of development.

 "The third pillar is an economic transformation, which is where the design of Ghana Cares programme, which is a GHC100-billion programme comes in, and there is the development bank as one thing to make us able to cross over to where we, as a nation, want to go. So that then becomes the driving force and through that we will be able to identify issues of modernising agriculture, expanding manufacturing, adding value, offering services, and leveraging ICT so that we have a digitalised economy.

"Ensuring that we are clear about the issue of tackling the youth problem, we know we have about 75% of the population below the age of thirty-five (35), constituting about a third of our population and so we provide enablers of digitization technology skills, access to financing, and then an attitude that will make us become an entrepreneurial nation to drive our efforts to be a regional hub so car assemblies, financial services, logistics etc. so as to demonstrate the effectiveness of the AfCFTA.

Mr. Ofori-Atta said the development bank then is a key pillar in those efforts because of some of the issues like how to get patient capital long-term at reasonable pricing for industry to use agriculture or any other area to be able to build a strong private sector that could absorb jobs. 

He said but even more significant was entrepreneurship so that graduates could think of ways to create values for themselves. 

"So really, we intend to set up a development bank that is world-class and we have been able to get entities such as KFW to be partners to give us the type of technical expertise we need. I think Ghana is putting in equity about over $250million, a world bank $250million, EIB 170, KfW about $47Million, African Development Bank may be around $40Million and once it is set up as a world bank best of class standard and then to use that as a channel for them to able to raise funds outside of the country long-term resources which they as a wholesale Bank will then be able to channel that to venture capital or the other banks or financial institutions, long term capital accurate that work hopefully encourage industry to do more.

We hope that the Development Bank will be able to provide loans up to 15 years and find ways of first losses agreements and guarantees etc. and to facilitate banking in a different way to be more reponsibe.

Overall, over 50 top CEOs participated in the programme and some of the key guests included Dr. Oteng Gyasi, CEO of Tropical Cable and Conductors and a past President of the Association of Ghana Industries; Ammishaddai Owusu-Amoah, the Acting Commissioner-General of the Ghana Revenue Authority; and Mr. Humphrey Ayim-Darke, Vice President of AGI.