He noted that finding viable SMEs, willing to give up control and allowed strategic partnership to grow their businesses, remained a major challenge for the private equity firms.
“We have a situation where our corporate governance is not as strong as a country, especially in the SMEs space as they are mainly owned by family people who are not willing to lose control and allow a third party come in to transform the business.”
Mr. Boamah was speaking at a private equity dialogue in Accra organized by Stanlib Ghana, the investment wing of Stanbic Bank Ghana.
The goal was to educate and build the skills of fund managers and pension fund trustees on the two new sub-asset classes which had been created under the pension scheme to be invested in private equities.
He said there were huge prospects in the private equity market and that the sector if well developed could help to speed up the development of the country and help pensioners to get better returns on their investment.
He therefore called for huge portions of the pension funds to be invested in private equity firms.
The Chief Investment Officer said one of the objectives of the new ‘Investment Guidelines’ was to ensure that pension funds played a significant role in the development of the Ghanaian economy through private equity investment.
He identified poor governance of SMEs, data deficit and difficulty in locating viable enterprises as barriers that needed to be torn down.
He highlighted the need to provide tax incentives to attract investment into the private equity market, which he said was increasingly becoming an important factor in Ghana’s economic development.
“If we have pension schemes investing in private equity firms, we will have the returns staying in the country to help improve the returns of the pensioner” he added.
Some fund managers called on regulators to create conducive regulatory environment for the industry.
SMEs should improve corporate governance to attract private equity
The Chief Investment Officer at Stanlib Ghana, Kwabena Boamah, has asked Ghanaian small and medium enterprises (SMEs) to strengthen their corporate governance practices to attract funding to expand.