A Business Executive of international repute has observed that the best source of funding for any business is “other people’s money” popularly known as OPM. “It is this source that we must attract.”
Dr. Sam Jonah, former Chief Executive of Ashantigold and ex-Vice President of Anglogold Ashanti, who made this observation in a speech he delivered at a forum at the British Council Hall in Accra recently, said the market for OPM to fuel economic growth is a fiercely competitive one.
He articulated, “Let me make it very clear that there is nothing ideological about sourcing funding from this sector. China is after all the biggest consumer of this capital.”
According to him, private capital is nomadic and would go to where greener pastures are, adding that it has absolutely no loyalty to a region, race or religion.
Dr. Sam Jonah pointed out that there is a universal set of criteria that all investors – local and foreign – look for in their investment decision making process. The main ones, he disclosed, are Macro and Micro economic stability, political stability, predictable investment environment, swift and fair administration of justice, fairness of labour laws, corporate and political governance, skills and education level of population and size of market. “It is a combination of all these which may assure the investor of a decent return on his investment,” he underscored.
The business magnate asserted that for the foreign investor, there is an additional criterion which has to do with how the local investors are treated, and noted that this represents the true test of the credibility of the laws, regulations and investment policies of the country.
“Where there is a perception of unfairness in the treatment of your own people, the foreign investor will have no reason to believe that he would be treated any better. In any case, every investor likes to manage his risk and reward by teaming up with financially strong local investors. It makes eminent sense to do so,” he said.
Dr. Sam Jonah maintained that local capital mobilization through wealth creation has a rather chequered history in Ghana, indicating that local businesses and enterprises had not been spared the vicissitudes of political cycles.
He expressed apprehension that in Ghana politics had always driven business, and that that was often taken to even ridiculous levels.
The former CEO of Ashantigold posited that “in evaluating businesses for government support, public officials have been known to ascertain whether the promoters of the business are acceptable faces in the CASTLE! With every change of government , too much time and effort seem to be spent on witch hunting even where there are no witches!”, he claimed.
Continuing, Jonah noted that business men and women in this country “spend precious time navigating through the shark infested waters of Ghanaian politics.” According to him, some had paid dearly for having been on the wrong side of the political divide. “We need to have policies which support and encourage economic indigenization. Indigenization is a nation building process. It does not happen by accident. It should be a deliberate act of our national development strategy,” he urged.
The business mogul did not rule out the fact that foreign entrepreneurs and companies are equally good in the economic development of the nation, and cited how the Nigerian banks had changed the nation’s banking landscape. “They can only complement our local effort,” he said and wondered how the country was going to create jobs, future entrepreneurs, and indigenous technologies if there were no indigenous companies in construction, manufacturing, the financial sector and other important sectors of the economy.
Relating the South African experience, Jonah said a deliberate policy was introduced – the BLACK EMPLOYMENT POLICY – to correct a historic wrong which kept a majority of the population – the blacks – out of the ownership of the economy during the apartheid era; “and only 15 years after independence South Africa has produced numerous formidable black entrepreneurs in diverse sectors of the economy.” He urged that useful lessons must be drawn from the indigenization experiences of Malaysia and Thailand.
Sam Jonah was emphatic that in the area of economic empowerment, Ghana had not done well for her people.
Citing Areeba as a case study, he recounted, “Areeba celebrated its 15-year anniversary in Ghana not too long ago. What may have been lost on most of us was that Areeba which was then owned by a Lebanese family, was sold to South Africa’s MTN for about 2.4 billion US dollars. I wonder how much of the 2.4 billion stayed in Ghana. I believe that if this mobile phone licence had been given to a Ghanaian, the social and economic spinoffs of such a windfall would have been felt by many.”
Suggesting a panacea for the success of economic empowerment in the country, Sam Jonah said this could be premised on a change in the attitude of Ghanaians to wealth creation in general. “THE IMPRESSION IS CREATED THAT WEALTH AND HONESTY ARE INCOMPATIBLE! INDEED IT IS SAID THAT THE PARLOUS STATE OF THE PRIVATE SECTOR IS A REFLECTION OF THE GHANAIANS’ DISDAIN FOR SUCCESSFUL LOCAL ENTREPRENEURS,” he lamented.
He made it clear that for now, “WE WOULD NECESSARILY HAVE TO RELY HEAVILY ON FOREIGN DIRECT INVESTMENT AS OUR MAIN FUNDING SOURCE.”
Stay tuned for more details…
Source: Peter Atiemo/New Crusading Guide/Ghana
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