- Trade Ministry claims GHS141m released so far
- Industrialists grieve over high interest rates on loans
Members of the Association of Ghana Industries (AGI), in the Suhum Municipality, are calling on government to further explain the ‘One District, One Factory’ (1D1F) and the ‘Stimulus Package’ concepts.
Speaking to the Goldstreet Business on the sidelines of a working tour of the area by the leadership of the Eastern Region AGI and the Regional Minister, Mr Eric Kwakye Darfour, some companies, including Chocho industries, O’nyce Enterprise and Kwayisi Christian Herbal Clinic, said; “we have heard of the 1D1F concept but we are not privy to the Stimulus Package concept and how that regime operates.”
However, the Trade Ministry, in April this year, had announced that it has released over GHS141 million to six companies out of the 83 that applied for support. The Ministry also said, it would disburse funds to 20 more companies through some designated banks from April.
The stimulus package is part of government’s initiative to grow the private sector, through the provision of financial support to distressed companies.
“What I know is the 1D1F which we were told, deals with minor companies or those companies in distress. We at Chocho have applied for that and we were told we’ve been selected.
We presented our business plan and proposal and attended series of meetings last year and early this year but as it stands, we’ve not received any feedback and the way forward. Aside that, I don’t know of the stimulus package regime,” Mr. Emmanuel Kofi Ampongof Chocho Industries told the Goldstreet Business.
After Chocho’s expansion, operating for more than a decade, the company is appealing for government support to help it acquire working capital to purchase raw materials, which keep increasing in cost every day.
“The raw materials are available but capital to access them due to competition from other local and foreign industries, is making it difficult; sometimes some foreign companies make payment for hundreds of tonnes in advance and that deprives us. Raw material producers are choosing the export option rather than selling it locally because they make more money on that,” Ampong said.
The expensive nature of raw materials he noted, is gradually taking away the company’s working capital, adding “we have orders but can’t produce because raw materials are expensive. We want to expand production to employ more people. We are not so much enthused about concepts or slogans, all we need is the support and intervention from the government.”
The introduction of the three percent VAT flat rate of which companies are not allowed to claim unless an application is made is also posing challenges to some industries.
“We buy raw materials with 17.5 percent VAT on it, and an input claim of three percent and that makes it 15 percent difference making it difficult to claim. That alone eats into our sales as we have to add it to our product cost. Interest on loans are from 26-30 percent and that is also difficult to access.” Ampong explained
The situation makes customers complain as foreign competitors with more capital, take advantage to make more money.
On the other hand, O’nyce Enterprise, a sachet water producing company, and the Kwayisi Christian Herbal Clinic lamented the numerous bureaucracies in setting up, including access to bank loans with high interest rates.
“We began operations three months ago, I got this company registered in two weeks because I know somebody who knows someone at the Registrar General, not only there, EPA and many others” CEO of the O’nyce Entreprise, Lawrencia Kyei Baffour said.
“I heard of the 1D1F but was told at the secretariat that applications have closed. I don’t know much of the stimulus package,” she said.
The President of the Eastern Regional AGI, Mr. Dela Gadjanku, said the tour was part of activities to acquaint with challenges confronting members of the association and the need to bring their plights to government’s notice.
By Wisdom Jonny-Nuekpe