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Policies not friendly for impact investment - Venture Capital CEO

April 28, 2016, 8:57 a.m.

The Chief Executive Officer (CEO) of the Venture Capital Trust Fund, Mr Osman Sulemana, has observed that current regulations in the country do not favour impact investments, a special form of investment that seeks to benefit society rather than make profit.

He mentioned the recent scrapping of some tax incentives for investments as one of the things that could further complicate the challenges facing the sector.

Currently, Mr Sulemana said policies on impact investment were incoherent, making them stumbling blocks for the development of impact investment in the country.

He gave the advice at the maiden Ghana Impact Investing Conference in Accra in an address titled: ‘Achievements and Challenges of Impact Investments in Ghana’.

As a result, he has advised the government to institute policies and regulations that will help the concept to get wider acceptance among investors in and outside the country.

Impact investing refers to investments made into companies, organisations and funds with the intention to generate a measurable, beneficial social or environmental impact along a financial return. It is also a form of socially responsible investing that serves as a guide for various investment strategies.

Mr Sulemana cited the United Kingdom as an example of having a 30 per cent tax incentives to private investment, a situation which is not so in the country.

“Currently in Ghana, some of the tax incentives provided under the Venture Capital Trust Fund Act 680 have been repealed recently,” he added.

Mr Sulemana added that the challenges facing the industry required urgent attention to ensure that it became vibrant and supportive to economic growth.
“We live in a country where Pension Funds do not invest in venture capital or private equity”, he noted.

He also mentioned the shortage of quality investment opportunities as a limiting factor for the development of impact investing.

He said the government needed to adequately prepare small and medium enterprises for investment opportunities through a special fund to help build the capacities of these companies to absorb investments.

The CEO said in spite of the challenges, the fund had been able to build an ecosystem through networking events, including breakfast meetings, regional workshops and identification of key partners.

The company has also established the Ghana Institute of Management and Public Administration (GIMPA) Centre for Impact Investing for Policy Research and Advocacy.

With the necessary financial resource, Mr Sulemana said his outfit would create new set of investments opportunities that would blend social, environmental and financial while improving investment portfolio expansion.


Disclaimer: The views expressed in this news report do not necessarily reflect the position of the National Development Planning Commission (NDPC)