Private businesses must apply equity investments concept

Panellists at a forum have called on private institutions and individuals to embrace the concept of equity investments to expand their businesses.

Making a case for the application of equity investments, the panellists, the Director of the Private Enterprise Federation, Nana Osei Bonsu, the Director of Acumen West Africa, Mr Godfrey Mwindaare, the Country Treasurer of Barclays Bank, Mr George Asante, and an Investment Banker at Databank, Mr Yoofi Grant, noted that a company or individual who adopted the concept of equity investments gained from accessing additional capital and technical expertise to expand their businesses.

Equity investments involve an investment made by an individual or a group of people into a business, which makes them part owners of the business or company.

The panellists, who made the remarks at a forum organised by the Canadian Chamber of Commerce held in Accra, also advised business owners to consider varied financial options when seeking financial injection for their businesses.

The forum, held on the theme “Financing local businesses, access to capital, in house cleaning - investment perspective”, brought together members of the Canadian Chamber of Commerce, Ghana and business owners.

Equity investment

Nana Bonsu said equity referred to part ownership of a business and stated that many Ghanaians were not keen on forming partnerships because of lack of trust.

According to him, the cultural orientation of a lot of individuals had affected their way of thinking, thereby making them interested in fully owning their businesses instead of considering  private equity.

He encouraged business owners to regularly seek counsel from their bankers or investment advisors in order to know the available financial options.

While acknowledging the relatively high interest rate in Ghana, the Country Treasurer of Barclays Bank, Mr George Asante, advised business owners to regularly consult their banks for business advisory services.

This, according to him, would enable business owners to consider adequately other financial options.

He entreated business owners to eliminate all forms of waste and unnecessary expenditure that could affect the administration and sustenance of their businesses. 

 Mr Grant told participants that investment banking involved the proffering of business and financial advice to business owners, adding that investment companies were able to seek financial assistance and investments for businesses.

He said many businesses had collapsed due to the unqualified persons employed and appointed to sensitive business positions.

Mr Grant also said many businesses lacked an effective governance structure which led to the mismanagement of resources and advised business owners and leaders to employ qualified personnel to manage their companies and businesses.

The Director of Acumen West Africa entreated business owners to understand the risk involved in seeking financial assistance from financial institutions before subscribing to them.

He said business partnerships injected additional capital for the expansion of businesses and advised business owners to desist from being over optimistic and rather be realistic with their ideas and targets.