New Fund For Estate Development

A new venture capital trust fund (VCTF) to be called 'Real Estate Fund', which will support real estate and the hotel industry in Ghana, is in the offing.

Chief Executive Officer of the VCTF, Nana Osei Bonsu who disclosed this said the fund when established will cater for the financing needs of the housing sector especially where there had been a huge housing deficit.

This will mean estate developers and small and medium scale enterprises (SMEs) that wish to enter into the construction sector could access the fund with no interest charged.

According to a 2004 report, Ghana has about 600,000 housing deficit which could be nearing 1,000,000 by 2010.

Speaking to some executive members of the Ghana Union Traders Association (GUTA) as part of the Ministry of Finance and Economic Planning's Financial Literacy Programme, Nana Osei Bonsu said his outfit wants to make investment successful for SMEs, thus the need for VCTF to equip SMEs with technical assistance such as understanding sound financial management and how to effectively report on company's finances to ensure compliance.

The VCTF was established by government through a Parliamentary Act 680 and passed in November 2004 with the aim of providing investment capital to SMEs for the development and promotion of venture capital financing.

It started with a seed capital of $40 million with the pharmaceutical, ICT, Agro-processing and tourism industries benefiting from about 55 percent of the total fund available.

Presently, there are four venture fund companies existing including Bedrock Venture, Activity Venture and Gold Venture Capital Limited.

J.B. Danquah, Chairman of the Parliamentary Select Committee on Trade and Industry urged the traders to launch into big time manufacturing business alongside their buying and selling, a move that will grow the manufacturing sector.

Kwadwo Baah-Wiredu, Minister of Finance, entreated the GUTA members to always look for sources of funding that are cheap to grow their business.

He noted that an arrangement will be made with the Ghana Stock Exchange and the International Finance Corporation (IFC) for the members to have an insight into their operations.

By Charles Nixon Yeboah