Monday, April 11, 2011

GIPC Boss urges gov’t to fund local entrepreneurs

The Chief Executive Officer of the Ghana Investment Promotion Center (GIPC), George Aboagye has called on government to make a conscious attempt to fund local entrepreneurs to make their businesses more competitive, at least on the African continent.

He made the call on Multi TV’s current affairs program PM Express Wednesday night. The programme discussed the competitiveness of Ghanaian businesses following a recent Africa Report Magazine publication which ranked top 500 companies on the continent.

The ranking did not have any Ghanaian company in the top 100 performing companies on the continent.

Seven Ghanaian companies, MTN Ghana, Tarkwa Mines, Volta River Authority, Total Petroleum Ghana, Produce Buying Company, Ghana Oil Company and Damang Mines however managed to make it onto the top 500 list. Their positions were 147, 203, 219, 276, 322, 337 and 480 respectively.

But commenting on the ranking, Mr. Aboagye said ‘it does not mean that our businesses are not performing well’.

“What we are looking at is the structure of these companies. Those who are here because they came as Foreign Direct Investment [FDI], are not wholly controlled here. Their level of operation, their level of capitalization and so on is foreign induced, and that is a very critical point. That means their growth will be determined not only by their profitability here but by the decisions that are made outside.”

For him, the no show of Ghanaian companies could also be tied to the fact that not many Ghanaian companies knew of the existence of such a ranking system.

“It means we are not in tune with happenings around us... they [Ghanaian companies] should be aware that such rankings are going on” he said.

He noted that the Africa Report used a criterion which was similar to that used for the Fortune 500 ranking. Their criteria he said was simply based on “turnover, turnover change and net profit.”

This formula, according to him, is quite different from what the GIPC employs in ranking the top 100 companies in Ghana. “We take into consideration size, growth and profitability [of the companies] but we look at growth because we’re interested in growing the economy” he said.

On why none of the companies in the Ghana Club 100 found its way onto the Africa Report’s top 100, Mr. Aboagye responded that “those companies that are in the first 100 have a history of doing business within the rules and regulations and codes of their country without much limitation, sometimes without competition.”

Mr. Aboagye however said the Africa Report ranking should be taken seriously. He added that “when the state owns so many enterprises it stifles out private entrepreneurial spirit which had existed long before ... and when capital is manipulated by the state, then the opportunity or chances for the growth and upward development of entrepreneurship becomes challenged.”


Story by Nii Akrofi Smart-Abbey/Joy News (Multi TV)

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