The government of Ghana has launched a GH¢2 billion ($343m) guarantee scheme to support universal banks in the country to offer financial support to small and medium enterprises (SMEs) for them to recover from the COVID-19 shocks.
The President of Ghana, Nana Addo Dankwa Akufo-Addo
The Ghana Care Guarantee Scheme (GCGS), to be administered by the Ghana Incentive-based Risk-sharing System for Agricultural Lending (GIRSAL), is to help SMEs to borrow from banks at lower rates and with longer tenor.
The GIRSAL is a non-bank financial institution incorporated as a private company by the Ministry of Finance, with seed funding from the Bank of Ghana (BoG) and the African Development Bank (AfDB).
The GCGS will guarantee up to 80 per cent of the credit extended by participating banks to their clients.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
Small businesses and startups in Ghana have a new succor, courtesy of the government of Ghana. President Akufo-Addo has launched the GH¢1 billion($172 million) Coronavirus Alleviation Programme (CAP) business support scheme intended to support small and medium-scale enterprises (SMEs) impacted by the novel coronavirus (COVID-19) in the country.
The President of Ghana, Nana Addo Dankwa Akufo-Addo
“This highlights the important role MSMEs play in the growth and development of our economy, necessitating the special attention of Government,” Nana Akufo-Addo said at the launch of the programme t Jubilee House, the seat of the nation’s presidency.
Here Is What You Need To Know
Out of the 1.2 billion cedis earmarked for this Programme, GH¢600 million will be disbursed as soft loans to MSMEs, with up to a one-year moratorium and a two-year repayment period. The rate of interest on government’s six hundred million cedi (GH¢600 million) facility is three percent (3%).
Additionally, selected participating banks will provide negotiated counterpart funding to the tune of GH¢400 million, making, in all, GH¢1 billion for disbursement under this Business Support Scheme, with the entire scheme set to attract some 180,000 beneficiaries across the country.
The SMEs sector, according to the University of Ghana study in 2015, contribute about 70 per cent to Ghana’s Gross Domestic Product (GDP), and account for about 92 per cent of businesses in the country.
Who Qualifies To Receive Funding?
According to Akufo-Addo, the beneficiary sectors include agri and agro-businesses; manufacturing; water and sanitation; tourism and hospitality; education; food and beverages; technology; transportation; commerce and trade; healthcare and pharmaceuticals; and textiles and garments.
The beneficiaries must be either self-employed, sole proprietors, or engaged in a limited liability, partnership, or joint venture arrangement.
A total of ninety-nine (99) employees is the limit of employment for any qualifying enterprise.
The qualifying enterprise is encouraged to belong to a trade association or group, and be registered with Ghana’s National Board for Small Scale Industries (NBSSI).
The application process starts today, 20th May, and ends on Saturday, 20th June.
According to Ghana’s president, generally application forms have been made available online on the website of NBSSI, which is www.nbssi.gov.gh.
Smaller enterprises can however access the funds from the Adom Micro Loans, and larger ones from the Anidasuo Soft Loan, according to him.
Further enquiries may also be made across several platforms including nbssi.gov.gh/capsupport; mobile number platform (USSD) *718*555#; Call Centre Helpline: applicants can also call the CAP Business Call Centre on 0302 477 777; email address capsupport@nbssi.gov.gh; or visit the nearest NBSSI Business Advisory Centre for assistance with their applications.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
Going forward, new businesses seeking to be registered in Ghana must first declare the direct beneficiaries from their success before they can be registered. This is according to a new directive from Ghana’s Registrar General’s Department (RGD).
Registrar General, Jemima Oware
‘‘This will ensure there is transparency in business ownership in the country and prevent corruption, money laundering, and terrorism funding,’’ the Registrar General, Jemima Oware, said in view of Ghana’s new Companies Act, 2019 (Act 992).
Here Is All You Need To Know
According to Ghana’s new Companies Act (2019), a beneficial owner is a person(s) who directly or ultimately owns or exercises substantial control over a person or company and has a substantial economic interest in or receives substantial economic benefits from a company.
Mrs Oware said the law will prevent the instances where the government awards multiple contracts to politicians because they get individuals to front for them as directors and shareholders of two or more companies directly owned by them.
She explained that the new law will not allow for individuals, especially politicians from using others as directors or shareholders of a company they own or have majority shares in.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com
Ghana looks like it is taking steps to bring to an end the long drawn-out crisis between Ghanaian traders union and foreign retail traders in the country. Ghana’s Ministry of Trade and Industry has revealed that the country is working to address issues about foreigners engaged in retail business in Ghana, an action that violates the Ghana Investment Promotion Council (GIPC’s) GIPC Act.
Mr. Ntim Odonkor, a representative of the Minster of Trade and Industry
“As directed by his Excellency, a technical sub-committee has been put together to ensure the implementation of the president’s directives on this matter”, Mr. Ntim Odonkor, a representative of the Minster of Trade and Industry said during the inauguration of the Tenants of Makola Shopping Mall Association, a branch of the Ghana National Union of Traders Association (GUTA)
“Secondly, parliament has charged its subsidiary committee on Trade, Industry to study and make recommendations in a by-partisan manner with a view to finding a sustainable solution to this issue”, he added.
Here Is All You Need To Know
This latest move is coming on the heels of concerns raised by members of GUTA over some foreigners engaged in retail trading.
According to Mr. Ondonkor “the issue of foreigners taking over trading activities reserved for Ghanaians which has been your concern sometime has also come to the notice of government.’’
A Look At The Controversial Section 27(1) of Ghana’s Investment Promotion Center Act
According to Section 27 (1) of the GIPC Act, a person who is not a citizen or an enterprise which is not wholly-owned by a citizen shall not invest or participate in the sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place. The list of prohibited trading activities are:
The sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place;
The operation of taxi or car hire service in an enterprise that has a fleet of less than twenty-five vehicles;
The operation of a beauty salon or a barbershop;
The printing of recharge scratch cards for the use of subscribers of telecommunication services;
The production of exercise books and other basic stationery; f. the retail of finished pharmaceutical products;
The production, supply, and retail of sachet water;
All aspects of pool betting business and lotteries, except football pool.
Source: CNN
Consequently, enterprises eligible for foreign participation and minimum foreign capital requirement are as follows:
A person who is not a citizen of Ghana may participate in an enterprise other than the retail activities specified in section 27 if that person
In the case of a joint enterprise with a partner who is a citizen, invests a foreign capital of not less than two hundred thousand United States dollars in cash or capital goods relevant to the investment or a combination of both by way of equity participation and
The partner who is a citizen does not have less than ten percent equity participation in the joint enterprise; or
Where the enterprise is wholly owned by that person, invests a foreign capital of not less than five hundred thousand United States dollars in cash or capital goods relevant to the investment or a combination of both by way of equity capital in the enterprise.
A person who is not a citizen may engage in a trading enterprise if that person invests in the enterprise, not less than one million United States dollars in cash or goods and services relevant to the investments.
For the purpose of this section, “trading” includes the purchasing and selling of imported goods and services.
An enterprise referred to shall employ at least twenty skilled Ghanaians.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com
Ghana ’s government has introduced a new programme to support Ghanaian businesses to take full advantage of the African Continental Free Trade Area Agreement (AfCFTA). Code-named Business Regulatory Reform Programme, the new programme seeks among other things, to strengthen local industries to make them competitive and help make Ghana’s business environment the most transparent and efficient in Africa.
‘‘The programme would ensure a Rolling Review of business regulations, using Regulatory Guillotine principles, which is a functioning e-Registry and Consultations Portal that will enable Ministries, Departments and Agencies to carry out systematically rolling reviews of regulations, in order to reduce turnaround times and the cost of compliance,” Ghana’s President Akufo-Addo said.
Here Is All You Need To Know
The Business Regulatory Reform Programme is a three-year initiative coordinated by Ghana’s Ministry of Trade and Industry, and implemented in partnership with other stakeholders.
The programme, aimed at improving the business atmosphere in the country, consists of seven components, President Akufo-Addo said.
The first component under the programme targeted reform initiatives which would ensure that Ghana’s position in the annual ‘Doing Business Ranking’ improved significantly.
Establishment of A One-Stop Registry
Additionally, Akufo-Addo said a one-stop registry of all business regulations would be established under the programme.
The purpose of the one-stop registry, according to him, is to ensure that the inventory of business-related acts, legislative instruments, regulatory notices and administrative directives are available at a single electronic registry.
“This will provide businesses with an easily accessible, one-stop repository of up-to-date information on all business regulations in the country,” he said.
Establishment of an Interactive Web Portal
Another component under the Business Regulatory Reform Programme is the establishment of an interactive web portal for public consultation with the government on business related policies and legal and regulatory changes.
“Minimum standards for transparency in public consultation will be introduced, including a consultations schedule published on the portal with timelines for receiving inputs from interested stakeholders,” the President said.
Introduction of Impact Assessment Mechanism
The reforms programme would lead to the introduction of an impact assessment mechanism to build a permanent system for quality control of new business regulations, and safeguard the gains made from reforms, he said.
“These assessments provide a tool to assess objectively the likely effects, positive and negative, of a new regulation, and propose better alternatives to achieve the agreed policy objective,” he said.
Also under the programme, he said there would be targeted regulatory relief for SMEs at early stages of development to stimulate higher levels of entrepreneurship and job creation in strategic sectors.
The last component under the programme, the President said, was a permanent Public-Private Dialogue Mechanism for structured dialogue between the government and the private sector.
“These reforms to improve the business environment complement and reinforce the strong measures that have been taken for financial and economic stabilisation.
“With the AfCFTA covering a market of 1.2 billion people, with a combined GDP of $3 trillion, across the 54 Member States of the African Union that have signed up to the Agreement, it will serve as the vehicle for Ghana ‘s businesses to trade with other AU Member States in a more modern and sophisticated manner”.
“Empowered Ghanaian enterprises should be frontline actors of this new, exciting journey in Africa’s economic history,” he said.
The 8th Edition of the Ghana Economic Forum (GEF) was held on the theme ‘Sustaining Financial and Economic Stability-The Key Priorities’.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
