Thirty five projects under the governments industrialization initiative, One District One Factory (1D1F), are now going through further critical credit appraisal by the Ministry of Trade and Industry’s (MOTI) technical team and the various participating financial institutions.
Concerted efforts are being made to ensure that these projects, if actually deemed commercially viable, receive the requisite financial support to ensure their smooth implementation.
Further to this, reliable information available to Goldstreet Business indicates that, negotiations have reached an advanced stage for 22 flagship enterprises to be established under a US$400 million facility which has been syndicated with the support of China National Building Materials Corporation (CNBM).
This is expected to benefit all 10 regions in the country.
Already there are about 79 1D1F projects across the factories receiving both financial and technical assistance under the programme. Some of these factories are operating, while others would be commissioned before the end of the year.
To enhance the competitiveness of these newly commissioned factories, and upcoming ones under 1D1F, government has approved incentive packages, which includes interest rate subsidies, and tax holiday for five years as well as duty waiver for machinery, equipment and raw materials.
These incentives are targeted at ensuring that projects under the 1D1F are able to market their products in the global place.
Equity Funding
Notwithstanding the various incentives provided by government, the Association of Ghana Industries (AGI) has argued that government takes a second look at the model being used in implementing the 1D1F.
In an interview with Goldstreet Business, at the sidelines of the 58th Annual General Meeting of the AGI, the Vice President for the SMEs sector of AGI, Humphrey Ayim-Darke said government should reconsider the model for the 1D1F, by making equity contributions for projects in need.
The AGI believes that, if the current model is given a second look as proposed, the rate at which industrialists would deploy the 1D1F programme across the country and absorb the number of unemployment would be accelerated significantly.
“On that basis, Government should reconsider the 1D1F programme model which leaves it to private promoters and bring in equity contributions with an exit plan for five or 10 years, that would become long term funding for industrialists to deploy the industrialization the country is looking up to,” Ayim-Darke said.
As at March 31, 2018, 700 business plans had been submitted. Out of these, 602 have been reviewed and 313 of them are designated as bankable and potentially feasible to be implemented.
Local banks under the programme are serving as intermediaries between the business promoters and the Chinese financial institutions that are providing financing to support what CNBM is going to provide in support of these projects.
These banks include; National Investment Bank (NIB), Universal Merchant Bank (UMB), Barclays Bank, Agricultural Development Bank, GCB Bank, EXIM Bank, and Ecobank.
By Joshua W. Amlanu
