- The Ghanaian government has launched a 22- million Euro credit line aimed at supporting the Small and Medium Enterprises (SMEs) as way to boosting private sector activity and to enhance its contribution to the country's economic growth.
The facility launched yesterday, which will be disbursed through local financial institutions has been funded by the Italian government through the Ghana Private Sector Development Fund.
According to Ghana’s Minister of Trade and Industry, Hanna Tetteh, the fund will help finance projects such in capital goods, spare parts, consumable production inputs and services.
The facility will also provide start-up funds for viable projects.
The programme is in its second phase, with the first phase initiated in 2003 having ended last year, with about 10 million Euros disbursed to 29 SMEs beneficiaries in the agro-processing, construction, mining, auto services and health related services.
Speaking at the launch, Ms Tetteh appealed to the beneficiaries to comply with the conditions set to the credit and adhere to the repayment schedules. She said the development of a vibrant private sector was key to the achievement of growth, expansion and diversification of the economy, and thus the government's vision was to create a nation of innovative entrepreneurs, especially in the SMEs sector.
As explained by the Italian ambasador to Ghana, Fabrizio De Agostini, the 20 million euro loan has been provided to Ghana at interests rates that are almost free and with a moratorium period of 20 years and a repayment period of 36 years. He said the extra 2 million euro is provided as a grant to Ghana.
The facility, he said, would be able to offer soft loans to beneficiaries ranging from 30.000 Euros to 450.000 Euros for projects' expansion and capacity building.
He further said even though the loans will be disbursed in the euro currency, the repayment will be in the local cedis and with the government of Ghana shouldering the risk of the foreign exchange rates.
Ghana has been able to attract a number of soft loans to boost the country’s economy, since the new president President John Evans Atta Mills took office early this year and brought in reforms, especially in the government spending.
Ghana is currently among the biggest World Bank-financed portfolio for in Africa, with 26 active projects of about US$700 million of interest free loans.
Having been one of the most hit victims of the soaring food prices, Ghana’s economy has taken a low gear as demand for its commodities dropped amid the global financial crisis. The country ranks behind neighbouring Cote Divoire as the world’s biggest cocoa producer and is Africa’s second-largest gold miner, after South Africa.
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