Venture Capital Trust Fund invests in more than 60 companies

The Venture Capital Trust Fund (VCTF) has established seven funds with over 60 investments, leveraging an extra $89.7 million from invested capital of $29 million.

These investments resulted in the creation of 3,400 direct jobs and 13,500 indirect jobs.

The Minister of Finance, Ken Ofori-Atta, has said that the progress was made over the last decade and that much more could be done.

Speaking at the inauguration of the new VCTF board, he explained that the Fund was established to provide total venture funding for SMEs. He added that the market had however evolved with new players joining the market, with some national and regional funds, and some being independent but in collaboration with the Fund.

He said the Fund was a recipient of the Ghana Economic Transformation Project (GETP), which aims to promote private investment and growth in non-resource-based areas of the economy.

The Fund was entrusted with the goal of providing venture finance for early-stage firms and strategic industries with an investment capacity of $40 million, according to the Minister.

“This is a testament of the Government’s firm faith in the potential of the VC/ Private Equity ecosystem to lead SME development and build unicorns for the country,” he said.

Financial boost

Mr Ofori-Atta further said the Development Bank of Ghana’s entry into operation provided a significant boost to the financial ecosystem because it was positioned to provide wholesale funding for on-lending to SMEs.

Various government measures, he added, like the 1D1F, Planting for Food and Jobs, and the Ghana Care Obaatampa Programme, were geared at boosting Ghana’s industrial and manufacturing base and supporting youth entrepreneurship.

To do so, leveraging private investment to supplement government efforts is critical, and the significance of private equity and venture capital in attaining this goal cannot be underestimated.

According to the Minister, a survey conducted by the Africa Venture Capital (VC) and Private Equity (PE) Association in April 2020, West Africa has become an attractive destination for foreign investment and is expected to be the most attractive destination for VC/PE investments over the next three years.

Between 2014 and 2019, investments worth $10.2 billion were made in West Africa, with Nigeria getting 68 percent of these funds and Ghana 22 percent.

Mr Ofori-Atta predicted that Ghana will attract more such investments, particularly as a result of the government’s banking sector changes, which “we feel has contributed to making Ghana a business-friendly destination for overseas investors,” he said.

Increasing investment

The Finance Minister therefore tasked the new Board to position VCTF to help increase the total value of investment attracted into the country from the current 22 percent to 35 percent.

Mr Ofori-Atta said the government remained committed to this agenda and would continue to support the VCTF to deliver on its mandate.

Speaking on behalf of the members, Chairman of the Board, Mr Kofi S. Yamoah assured the Minister of the board’s intention of building a strong corporate governance structure at the Fund.

He said the Fund was looking forward to the release of resources to execute their activities and operations and would continue to lend the needed support to the SMEs.