SPEECH DELIVERED BY DANIEL DUKU,
CEO OF VENTURE CAPITAL TRUST FUND
AT VCTF PRESS CONFERENCE 2011
Good morning, distinguished ladies and gentlemen of the media and invited guests. Welcome and a Happy New Year to you, a year of Double Action for VCTF.
In accordance with our mandate to promote and develop a vibrant venture capital industry in Ghana, this press conference is to launch our Vision for 2011.
2. VCTF Achievements – 2006 to 2010
VCTF started with a seed funding of GH¢22.4million from the Government of Ghana. Since inception, the Trust Fund has focused on increasing the pool of venture capital funds available to SMEs in Ghana. In partnership with both local and foreign investors, VCTF has created a pool of GH¢83 million for SME investments. In doing so, the Trust Fund has established five venture capital funds and invested the Ghana cedi equivalent of US$17 million. To date, more than 1,000 direct jobs have been created by a total of 39 portfolio companies.
To enhance the positive impacts of its investments, VCTF organized training and capacity building programs with top-tier institutions and management consultants. Through the efficient management systems and technical assistance provided to SMEs, some portfolio companies have recorded significant turnover growth in excess of 100%. Additionally, Government tax revenue resulting from the 39 portfolio companies increased by an average rate of 264.5% per annum after venture financing capital. During 2010, GH¢2.5 million was invested in six new portfolio companies by the Trust Fund’s Venture Capital Finance Companies (VCFCs). Also, VCTF embarked on a mega cross-country Road Show to increase awareness of its operations and educate the SME sector on the merits of venture capital/equity financing.
Since 2006, the Trust Fund, in collaboration with partners has committed GH¢3.7 million in commodity value chain activities including Sorghum and Soybean. Despite the numerous challenges confronting this sector, significant achievements have been made, which have positively impacted on farmers and the economy in general. To date, an estimated 8000 smallholder farmers have been integrated into the global supply chain of local industries with ready-made market for their produce.
An estimated 12,600 metric tons of Sorghum (valued at GH¢7.4 million) have been produced out of which 6,600 metric tons (valued at GH¢4.6 million) have been sold to industries for import substitution.
An estimated 1,400 jobs (full time equivalent-FTE) have been created in the participating communities and farmer-base organizations (FBOs). Additionally, over GH¢45,400 have been paid to communities and districts as local council tax.
The Trust Fund initiated discussion with Development Finance Institutions (DFIs) and other Private Equity Funds to attract additional funds for the fund pool available to SMEs. We have been in talks with several potential investors to attract additional capital for investments in more SMEs. VCTF closed 2010 with a Government commitment to allocate GH¢10 million in its 2011 budget as additional funds to support the SME sector.
This year, the Trust Fund will leverage its new capital injection with funds from both foreign investors and local financial institutions to establish new funds. We commend Government’s continued support for the Trust Fund and SMEs. VCTF will continue to work closely with Government to secure a permanent source of funding. We recognize the need to compliment Government’s efforts toward supporting SMEs and will seek additional funding through our flagship Public Private Partnership (PPP) model to support SMEs. Our objective is to increase the total pool of funds available to exceed US$100 million to support SME investments.
An “Investor Learning Journey” to attract both local and foreign strategic investors will be organized during the year to support our fund raising efforts. The Trust Fund will also launch its Angel Investor Fund, aimed at attracting high net-worth individuals as “Business Angels” to invest in SMEs.
Venture Capital Finance Companies
Fund Managers and portfolio companies will continue to be supported through capacity building and Technical Assistance (TA) programs. Monitoring efforts will also be intensified to ensure high performance from Fund Managers and portfolio companies. Additionally, the Trust Fund shall conduct a thorough review of all portfolio companies to assess the impact of investments and also identify areas that require further support. VCTF will collaborate with top educational institutions to organize entrepreneurial development and capacity building programs throughout the year for portfolio companies.
In line with achieving our mandate, VCTF will establish and deepen relations with various professional bodies, such as; Banker’s Association, Association of Ghana Industries (AGI), Ghana Bar Association, Private Enterprise Foundation (PEF), Institute of Chartered Accountants (ICA), and Ghana Stock Exchange as stakeholders and third-party service providers in the development of the Venture Capital Industry.
To spur entrepreneurship within the economy, VCTF will collaborate with various Industry Associations and other stakeholders to institute an SME Awards scheme. This will honour Ghanaian SME entrepreneurs who have established and sustained successful and profitable businesses.
Additionally, the Trust Fund will seek to establish Venture Capital SME round tables in all regions to enable portfolio companies and potential entrepreneurs network and exchange ideas. These networks will also serve as a market linkage platform where entrepreneurs can also explore business development and marketing opportunities.
To further develop SMEs into large businesses and also invite the public to share in profitable SMEs, Fund Managers will be encouraged and supported to list on Ghana Stock Exchange.
The Trust Fund, in 2011, will also intensify its public awareness campaign to educate SMEs on the benefits of equity investments and attract more funds from local financial institutions.
This year, the Trust Fund will focus on expansion in its commodity value chain activities. Emphasis will be placed on new initiatives such as yellow maize financing to support poultry and livestock industry. The Vegetable sector will receive priority intervention in agro-ecological regions with more comparative advantages.
Discussion is on-going with key players in the agricultural sector incluing MoFA, Commodity Brokers including National Food Buffer Stock Company (NAFCO) to explore possible collaborations. Also, the Trust Fund will work closely with NAFCO to leverage technical resources as well as market opportunities to augment the existing market outlets. We will focus more on production and post-harvest financing with NAFCO providing an assured market.
Ladies and gentlemen, Venture Capital Trust Fund will be five years old in 2011. We are soliciting your support to move the process forward and to achieve our objectives for this year.
Thank you for your attention and thanks for coming.