GIPC Fights For Local Businesses

George Aboagye

The Chief Executive Officer (CEO) 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 programme recently.

The programme was used to discuss the competitiveness of Ghanaian businesses following a recent Africa Report Magazine publication which ranked top 500 companies on the continent. Ghanaian companies were ranked among the top 100 performing companies in Africa.

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, placing 147th, 203rd    219th , 276th , 322nd , 337th  and 480th respectively.

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,' Mr Aboagye noted.

For him, the no show of Ghanaian companies is due to the fact that not many Ghanaian companies know of the existence of such a ranking system.

'It means we are not in tune with happenings around us… Ghanaian companies should be aware that such rankings are going on,' he said.

He noted that the Africa Report used a criterion which is similar to the one 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 noted 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, adding 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.'