The other side of Ghana’s private sector

Source: Christian Dormedzui- ACIB | WIT Centre for Research |
Date: 10th-august-2017 Time:  10:35:23 pm

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Business is an exchange of goods and services. Be it a company listed on the stock exchange or table top by the road, it all falls under the definition of business. 

Readily, individuals and households come to mind at the quote of a private sector while power and governance to the government. In fact, government and business go hand in hand. 

The scrutiny of one to the other does not paint a perfect picture of how a society combines and uses its resources under the bearing of the state. 

This symbiotic relationship cannot be over emphasized. How far nations have developed are largely the roles these two arms have played over the years.

Ghana’s private sector described by governments as the engine of growth continues to enjoy enormous support.  From independence, the sector has grown incrementally beyond leaps and bounds. The expanse dominance in banking, sports, manufacturing, telecom, mining, petroleum, media, agriculture, tourism, real estate, aviation, et al are evident.  

Today, the sector is most attractive for budding professionals. Backed by technology and innovation, it could be said that the sector is even yet to get started. How could society have sustained without this ecosystem considering the chunk employment it offers households, talk less of the huge amount of budget corporate Ghana doles out to social responsibility every year. 

Notwithstanding, this growth did not happen alone. It came along with its own baggage. Over the years, amongst the commonest killer adversaries for the private sector have been the high costs of borrowing, taxes and erratic power supply.

One of the turning points in my life with regards to understanding and appreciating Ghana’s corporate politics was when l worked with an international technology planning and finances consulting group and later an economic research and financial intelligence centre. There, I had the opportunity to fully discover and saw behind the mask of corporate Ghana, the real skeletons in the cupboards of the private sector.  

Often times the private sector has cried so loudly for government support other times complained bitterly of foreign encroachment and dominance.

From the nineties through early 2000 to present day is a period which our young democracy has been consolidated. Within this period, Ghana’s democratic credentials have yielded incremental dividends in monumental proportions. 

In most western democracies with its accompanied macroeconomic stability, interest rates are very low for long term financial instruments. So, Ghana with relative stability had had lots of foreign funds which have lied almost idle in these democracies, Asia and the Americas flowing into its hands.

On my work as a research and business development officer for the two entities which have operated for more than two decades working for multinationals, donor agencies and development partners, the understanding of the complex phenomena in globalization, loan concessions, currency exchange, treasuries, trade imbalances with insights into the financing behind corporate growth and how efficient capital flows through the global financial market place became inevitable.

In fact, within this period, as to how foreigners are able to identify business opportunities and in turn make fortunes of it continued to daze Ghanaians and l will share with you some of these insights.

Most foreign business owners spend a great deal of time on feasibility studies. These men from the other side of the world apart from the dollars at their disposal “buy” the necessary information needed for their operation. They engage seasoned advisors at every stage of their operation. This is very uncommon with the Ghanaian who doesn’t understand the works of consultants. If fact it is deemed as throwing away monies. Sadly, this thinking has made lots of businesses run into a ditch as asymmetric information found its way of displacing companies’ strategies that hadn’t been subject to rigorous market testing.

Apart from feasibilities, financing is a major problem in Ghana. It’s either a bank/financial institution is not having enough capital to pump into whichever project on one hand and a  prospective client having a problem meeting a certain requirement the other. What this means is that there’s some limited fund somewhere but with a great deal of difficulty to assess it or an entity meets all requirements but the financial institution technically broke. From the year 2004, due to the huge bureaucracy in registering a business and getting operating permits, some crop of foreign investors resulted in undertaking mergers, acquisition, and equity but this also does not also come as problem-free. 

While many financial institutions and other sector entities are running out of cash crying so loud for funds, some foreign funds have found their way into the economy and flowing in good quantum. Over the years, it emerged that most Ghanaian businesses do not adopt and practice certain basic internationally accepted requirement such as succession planning, asset evaluation and most important of all long term business plan making the sector grow at a pace it ought not to have. 

In March this year 2017, a company had crash gate our firm and cried so hoarsely for funds. After a painstaking business profiling, the said entity all of sudden emotionally was unwilling to relinquish its name. A $20 million dollar facility found its way through Togo and back to France.

I admonish the Ghanaian entrepreneur to embrace the prevailing international standards even as the country is poised to herald the golden age of business in the sub-Saharan.


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