Empower the private sector to fund economic development – Ken Thompson urges government
Chief Executive Officer (CEO) of Dalex Finance, Ken Thompson, has called on government to empower the country’s private sector to aid in the funding of economic development.
Speaking at the 10th edition of the Business and Financial Times Ghana Economic Forum (GEF) on Monday, October 18, Mr Thompson noted the private sector is ready and willing to help government fund the country’s economic development should the government put in place the needed measures that empower and strengthen the private sector’s ability to provide jobs, increase productivity among others.
Driving home his point, Mr Thompson noted as an instance that banks and other credit institutions in the country on the back of certain policies put in place should be able to provide loans to Small and Medium-sized Enterprises (SMEs) for economic development, seeing that SMEs make up over 70 percent of the country’s GDP.
According to him, banks and credit institutions are mostly unable to lend to SMEs because of their risk level which is so because most SMEs are not formalised and adequate information on SMEs are usually lacking.
One of the measures he averred government can put in place and is already doing to help in this regard is government’s digitalisation drive.
“We need to empower the private sector and incentivise SMEs to fund economic development, government needs to intensify the digialisation drive and link the Ghana Card to Lands registry, births and deaths and everything to make information on Ghanaians and businesses easily accessible,” he opined.
Speaking further, Mr Thompson noted government is borrowing at levels it shouldn’t be borrowing domestically and that is crowding out the private sector and thereby affecting the private sector’s ability to access funds from banks.
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According to the Central Bank, funds channeled by banks into government secuirties as at the end of August this year totaled a little over Ghs 80 billion as total assets of banks increased by 16.7 percent to Ghs 166.4 billion.
Speaking at the 102nd MPC press brifing, the Governor of the Central Bank, Dr Ernest Addison, noted this is an amount which could have gone to the private sector to fund businesses for economic development.
The Governor however, noted that the Bank has put in place several measures to help minimize risks associated with lending to private sector by banks and expects banks to use them to boost credit to the sector.
“The BoG has put in place the needed infrastructure to minimize risks associated with lending to the private sector and we expect that banks will take advantage of the infrastructure that is available. So like the collateral registry, the credit bureaus among others are there to help banks better assess the risks associated with the lending to private sector.
We will continue to urge banks to pay more attention to the private sector and lend to them because really if we want the private sector to be the engine of economic growth then this is where the resources should go,” said the Governor.
