Venture Capitalism…..A Potentially Viable Solution To Ghana’s Unemployment Woes

To work in order to eke out a living is not just a means of survival and meeting other needs and responsibilities but also a significant function in the self-worth equation. Unemployed people have low sense of self- worth and are usually disrespected by society. They are seen as burdens on society who are easily prone to social vices and evil plots in consonance with the saying that the devil finds work for idle hands.

Throughout the world, economies are struggling and the ability of governments to create employment opportunities is limited, as austerity measures have become the order of the day. Cuts in government expenditure have resulted in the evaporation of jobs and even welfare systems have vanished in countries in which they hitherto existed. The private sector, the expected hope of many in terms of provision of jobs is also feeling the pinch of government austerity measures. High raw material costs, huge service costs, high taxes and low demand are adversely affecting the bottom lines of companies across the various sectors and industries around the globe.

Ghana, a low middle income country is not spared from the economic imbalances and hardships that have rocked other countries. As disclosed by the Minister of Finance, Seth Tekper in the 2013 budget, growth rate plummeted to 7.1 percent in 2012 from 14.4 percent in 2011. The recording of a budget deficit of 12.0 percent of GDP in 2012 against a target of 6.7 percent of GDP is very disturbing. NYEP, LESDEP and other job creation mechanisms by government cannot do the magic of bringing unemployment levels down, in the face of the increased population of about 24 million Ghanaians. As we keep ourselves up at night, trying to find solutions to the unemployment canker in the country, the interesting thing is that the solution is right before us. What are needed to harness this solution is commitment, effective mobilization and serious action.

Entrepreneurship, which is an audacious vehicle for economic progress has been bedeviled with capital constraints over the years. There are scores of people with brilliant ideas but lack the financial muscle to execute those ideas to create further employment opportunities and increase domestic production. It is very clear that Ghana needs more and adequately resourced venture capital firms - firms that will not be risk averse, but would rather go out confidently and support ideas of would-be iconic entrepreneurs.

Venture capitalism involves the provision of resources to fund ideas with high propensity of ensuring social and economic development when efficiently implemented. People with marketable solutions to societal problems usually lack economic resources to execute their plans and therefore critically need venture capitalists to keep their dreams alive. There are few venture capital firms in the country- the Venture Capital Trust Fund (VCTF) was established by the government in 2003. Other privately owned venture capital firms also exist, but their resource base is relatively small, making them unable to support many upcoming entrepreneurs as possible.

There are lots of people in Ghana with the means to support venture capital funds to ensure massive and large-scale entrepreneurship in the country. These wealthy people as well as others with the ability to invest are risk averse and are comfortable with their monies tucked away safely in bank accounts and government treasury bills. This culture is stifling entrepreneurship, creativity and innovation, employment provision and social progress. Despite this, some serial entrepreneurs are managing to beat the odds, but can really do better when supported with a robust, well-managed and sustainable venture capital infrastructure in the country.

Investing in start-ups is not appealing to most investors, as the prospects of the proposed ventures are usually in doubt. Investors prefer investing in already established firms with profitable trends and amazing prospects. But if we want to build a society that will engage most of its active minds and hands in profitable ventures for wealth creation, then we should waste no time in embracing the concept of venture capitalism. Friends can pool their resources together and invest in start-up ventures with prospects, and with efficient management and guidance, they will gain substantive yields. In so doing, they would have as well contributed to economic and social progress courtesy the jobs their investment would have provided. It is a positive sum game.

The forming of the Unemployed Graduates Association of Ghana (UGAG) has brought to light the height of graduate unemployment in the country, with some members of this association claiming being unemployed for eight years and more. Whilst some will be quick to dismiss this association and its motives, I believe in a way, it sends a message to us as a people to take proactive steps to reduce unemployment in the country. Unemployment has been spoken of so many times and it is appearing that it has lost the curbing urgency it deserves.

On any day, I will endorse livelihood empowerment over philanthropy. When you support people to work and earn for themselves, it is sustainable, but when you give them handouts because you think they're poor, they spend the monies on living costs and wait upon another Good Samaritan to save them.

My friends and I have decided to embrace venture capitalism by pooling our little resources together and investing in worthy start-ups. Its time you also join us, and together, we can create employment opportunities for many and give them peaceful rests at night.

Paul Edem Kuenyefu is an Entrepreneur, Development Enthusiast, Writer and Motivational Speaker. He is the author of 'TO THE ZENITH', a motivational piece.

Email: pedem99[at]gmail[dot] com