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29.04.2004 Business & Finance

Lack of interest in long-term investment hampers growth

By GNA

Kumasi, April 29, GNA- The lack of interest in putting money into long term investment portfolio has been identified as a major contributory factor to the slow pace of the country's economic growth. The Reverend Dr Charles Yeboah, Proprietor of the International Community School (ICS), said that the situation where individuals and corporate leaders were interested in only about what he termed "flashy lifestyles" which gave virtually no economic development.

He was speaking at the re-launch of the Gold Fund Unit Trust by the Gold Coast Securities Limited (GCSL) at the Cicero Guest House in Kumasi on Wednesday.

The Unit Trust is designed to help pool funds from the general public and invest in financial instruments like bonds and equities to serve the long-term capital needs of local businesses.

The Reverend Dr Yeboah said it was important for the private sector and individuals to accept to become effective partners of the government if the "Golden Age of Business" declared by the Kufuor Administration was not to remain a mere political rhetoric.

"We would have to move quickly away from the habit of wanting to impress that we are successful before we really become successful and focus more on building wealth for the future through savings".

Mr Seth Quainoo, General Manager of the GCSL, attributed the economic success of the "Asian Tigers", to the culture of savings among the people.

"It is regrettable that here, people do not save with the right and proper objectives".

He noted that Ghana now has all the markings of a promising market and said this was re-enforced by the growing international interest, which saw the Ghana Stock Market produce returns of about 154 per cent in 2003.

Mr Quainoo said the Unit Trust was therefore an investment opportunity for Ghanaians, both at home and abroad to support the growth of the economy.

The Fund would invest in a broadly diversified professionally managed portfolio of Ghanaian Companies to minimise risk, he added. The National Treasurer of the Association of Ghana Industries (AGI), Mr Thomas Wabi-Bello, said the inability to access long-term capital was a major disincentive to the progress of the local industries.

"Short-term loans that attract high interest rates from the banks are killing our businesses", he said.

He observed that although, it has been recognised that the private sector was the engine of growth but "not much oil is being put into it to enable it run smoothly".

The Fund has initially put on sale 20 million Units at a price offer of 500 cedis per Unit. The minimum that could be bought is 10,000 Units.

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