About 150 proposals have been received from both foreign and local investors keen on partnering government in its proposed plans to establish a factory in each of the 216 districts in the country
Trade and Industry Minister, Alan Kwadwo Kyerematen, speaking at the Ghana National Chamber of Commerce’s industrial forum on the ‘one district, one factory’ policy said: “As at last Friday, the Ministry of Trade and Industry has received 150 proposals from both foreign and local investors, including business plans, feasibility studies, and expression of interest covering varied economic interests.”
He said since government wants the policy to be driven by the private sector, it anticipates that investors own a 100 percent stake in the new factories. However, if the investor requires government support in terms of financing, then government will become a strategic partner that will invest not more than 30 percent equity in that particular project.
“This is to ensure that it remains a private sector-driven project. The investor alone has the authority to decide the equity structure of the company. If an investor wants to own a particular project 100 percent, that will be the best scenario. Obviously, we want you to be able to take full ownership of the project,” Mr. Kyerematen said.
The project will officially be launched at the 2nd National Policy Summit expected to be held in June this year.
The Trade and Industry Ministry envisages the cost of each project to range between US$1million and US$5million.
“If we are talking about replacing imports by exporting and job-creation, then obviously, size and scale become important. Why do we want to limit our own potential? So this is the average size of investment we are looking at,” he said.
However, in specific cases, particularly for existing companies that are being adopted, Mr. Kyerematen said it is possible that all that is required may be between “US$200,000 and US$500,000 because there is an already existing investment in place.”
“So, this is a comprehensive program to make sure that the districts enterprise project becomes successful. So, with or without government equity, there is still extensive support from government that will be coming to the promoter,” he added.
He added that additional government contribution will be provided to each project in the form of infrastructural support, roads, extension of energy and other utilities. It also includes tax incentives, subsidies and facilitating access to credit for investors.
President Nana Addo Dankwa Akufo-Addo promised the establishment of “one district, one factory” as a sustainable means to open up the rural economy through massive rural industrialisation and to create the much-needed jobs for the youth.
Based on projections from the Ekumfi Pineapple Project, the district industrialization project has been tipped to provide about 6,000 direct jobs per district.
Though the Ghana Exim Bank has been selected as the main bank for the implementation of the programme, the One District One Factory Secretariat, says it is open to banks that want to partner and expressed their readiness to engage the Venture Capital Trust Fund.
A total of US$3bn has been raised in pledges by the Secretariat, signaling strong foreign and local investor confidence in the much-anticipated project.
The project has been hugely welcomed by the business community as key associations, including the Ghana National Chamber of Commerce (GNCC) and the Association of Ghana Industries (AGI), have banked their hope on the initiative to revive failing industries and bolster the quest towards an export-led economy.