GHANA INVESTMENT FUND BILL
MEMORANDUM
The object of this Bill is to establish by statute a Ghana Investment Fund which is to provide funding for facilities to investors.
BACKGROUND
There has been in existence
since 1994 a Business Assistance Fund which was established administratively and
administered by the Business Assistance Fund Committee. The object of the
Business Assistance Fund was to help revive distressed but potentially viable
enterprises to contribute to GDP and exports and to promote managerial
efficiency to ensure that operations of industries became economic and
capitalize to the tune of 10.0 billion cedis but loan recovery is disappointing
inspite component of their debts, government has decided to use these
recoveries as well the proceeds so far realized from the Business Assistance
Fund to kick-start the establishment of the Ghana Investment Fund to provide
financial resources for short to long term credit facilities which have been
one of the banes to the smooth development of the private sector.
PROVISIONS OF THE BILL
The Bill is divided into two
Parts, Establishment, Board and management of the Ghana Investment Fund is
provided for under Part I, and Part II deals with the Administrative, Financial
and Miscellaneous provisions.
Clause 1 establishes the
Ghana Investment Fund. The object of the Fund, stipulated in clause 2, is to
provide financial resources for the grant of medium and long term credit
facilities to investors by designated financial institutions. Subclause (2) of
clause 2 details the investment activities for which monies from the Fund may
be applied. These include manufacturing, medical technology, electronics,
computer technology, software developmental technology, tourism, provisions of
services and the development of small, medium and large scale enterprises.
Subclause (3) of clause 2 extends the application of the Fund’s monies to the
funding of viable enterprises at the advanced and primary stages of their
development.
Clause 3 indicates the
financial sources of the Fund. The financial sources of the Fund are to be
derived from the outstanding amount of money constituting the Business
Assistance Fund; future repayment of any loans previously drawn on the Business
Assistance Fund; grants and loans obtained from banks and financial
institutions; grants and loans obtained from bilateral sources; voluntary
contributions from the private sector including private individuals; and such
monies as may be allocated by Parliament for the Fund.
Clause 4 makes provision for
the money of the Fund to be paid into bank accounts approved by the
Accountant-General.
Clause 5 of Bill deals with
the disbursement of money from the Fund. The Board established under clause 10
is responsible for the disbursement of monies to designated financial
institutions or other institutions for the provision of credit facilities.
Clause 6 defines the
criteria for the eligibility for credit facilities may be made partly demands
the start of or expansion of a business; registration of the business; with
wholly Ghanaian ownership or majority Ghanaian shareholding.
The procedure by which an
application for credit facilities may be made is provided for under clause 7.
An application is to be made to a designated financial institution or any such
approved institution in such form and accompanied with such information and
fees as the Board shall determine.
Clause 8 indicates the
duration of credit facilities granted by a financial institution in respect of
long term, medium term and short term financing.
Clause 9 of the Bill makes
provision for the administrative and other expenses related to the management
of the Fund to be charged on the Fund.
The Ghana Investment Fund is
to be managed and administered by the Board established under clause 10 of the
Bill. The Board is a cross section representation of the both public and
private sector but with a tilt in favour of the private sector. It consists of
4 ex officio members from government institutions; representatives of the
Association of Ghana Industries and the Ghana Chamber of Commerce; five persons
representing the private sector; a Chief Executive and a chairperson.
Clause 11 empowers the Board
to manage and administer the Fund. This clause enumerates the functions of the
Board which include pursuing policies to ensure the achievement of the object
of the Fund, the collection or the arrangement for the collection of monies
assigned to the Fund.
Other functions of the Board
are to ensure accountability for money in the Fund by defining appropriate
procedures for its management and the formulation of policies in consultation
with the Minister to determine among others the level of interest rate
chargeable on any credit facility granted under this Bill and the maximum
credit facility that may be granted to an applicant.
The Board is also charged
with responsibility to appoint the designated financial and other institutions
which shall grant credit facilities. The Board also receives and examines
reports from designated financial and other institutions for credit facilities
granted by them and has to prepare and publish, with the Minister’s approval
criteria for the disbursement of moneys from the Fund to designated financial
and other institution.
The Board is under clause 11
also responsible for monitoring the progress of successful applicants granted
credit facilities through agents assigned for the purpose.
Clause 12 to 15 deal with
the tenure of office of members of the Board, meetings, appointment of committee and disclosure of
interest. Clause 16 makes provision for
allowances for members of the Board.
Part II of the Bill contains
administrative, financial and miscellaneous provisions. The appointment of the
Chief Executive and other staff are provided for under clause 17 and 18
respectively. Clause 19 to 22 relate to the borrowing powers of the Board,
accounts and audit, reports of the Fund and the financial year for the Fund.
The Minister under
clause 23 is given power to make Regulations.
The seed capital of
the Ghana investment Fund is provided in clause 24. This clause enables the
total sum of money constituting the Business Assistance Fund any interest on
that money located in any bank account to be transferred into the Ghana
Investment Fund established under section 1. The transfer is however subject to
any payment required from the Business Assistance Fund on the date of the
coming into force of this Bill.
Finally, clause 25
deals with interpretation
Dr. KOFI KONADU APRAKU
Minister for Trade and Industry
Date: 11th January, 2002.
ENTITLED
GHANA INVESTMENT FUND ACT, 2002
BE IT ENACTED by Parliament as
follows:
PART I-ESTABLISHMANE, BOARD
AND MANAGEMENT OF THE
Establishment of the Fund
1.
There is
established by this Act a Ghana Investment Fund.
Object of the fund
2. (1) The object of the Fund is
to provide financial resources for the grant of medium and long term credit
facilities to investors by designated financial institutions.
(2) For the purpose of achieving
the object of the Fund, monies from the Fund shall be applied for such relevant
investment activities as the Board of the Fund may determine including in
particular the following:
(a)
manufacturing;
(b)
medical technology;
(c)
electronics;
(d)
computer technology;
(e)
software development;
(f)
plant assembly;
(g)
real estate development;
(h)
environmental technology;
(i)
tourism, including eco-tourism;
(j)
provision of services: and
(k)
the development of small, medium and large scale enterprises.
(3) Without prejudice to
subsection (2) monies from the Fund may be applied to fund viable enterprises
at advanced stages and to a limited extent at primary stages.
Sources of money for the Fund
3. The monies for the Fund shall
consist of
(a)
the amount of money constituting the Business Assistance Fund;
(b)
future repayments of any loans previously drawn on the Business
Assistance Fund;
(c)
grants and loans obtained from banks and financial institutions;
(d)
grants and loans obtained from bilateral and multilateral sources;
(e)
voluntary contributions to the Fund from the private sector including
individuals; and
(f)
such other monies as may be allocated by Parliament for the Fund.
Bank account of the Fund
4. Monies for the Fund shall be paid
into a bank account opened by the Board established under section 10 for the
Fund with the approval by the Accountant General.
Disbursement of the Fund
5. The monies assigned to the Fund
shall be disbursed by the Board to designated financial institutions or other
institutions for the provision of credit facilities.
Eligibility for credit facilities
6. Any person or enterprise may
apply to a designated financial institution or other institution for a credit
facility if that person or enterprise
(a)
has a business to expand or start;
(b)
is registered in Ghana under the Companies Code, 1963 (Act 179), the
Incorporated Private Partnerships Act, 1962 (Act 152) or any other enactment
for the registration of business; and
(c)
is wholly owned by a Ghanaian or partly owned by a Ghanaian with
majority Ghanaian shareholding.
Application for credit facilities
7. (1) An application for a credit facility shall be made to a
designated financial institution or any such approved institution by the
applicant in such a form and accompanied with such information and fee as the
Board established under section 10 shall determine.
(2)
On receipt of an application, made under subsection (1), the
institution shall
(a)
respond to the application within seven days from the date of receipt;
and
(b)
appraise and evaluate the application; and inform the applicant within
a period not exceeding thirty days of its approval or otherwise of the
application.
Period of credit facilities
8. A credit facility granted by
a financial institution shall be in respect of
(a)
long term financing for a period exceeding five years;
(b)
medium term financing for a period not exceeding five years;
or
© short term financing for a period not exceeding twelve months.
Administrative expenses of the Fund
9. The administrative and other
expenses related to the management of the Fund shall be charged on the Fund.
Appointment of a Board for the Fund
10. (1) There is established by this Act a Board for the Fund which
shall consist of
(a)
a chairperson;
(b)
one representative of the Ministry of Trade and Industry;
(c)
one representative of the Bank of Ghana;
(d)
one representative of the Association of Ghana Industries;
(e)
one representative of the Ghana Chamber of Commerce;
(f)
one representative of the Ministry of Finance;
(g)
the Chief Executive of the Fund;
(h)
the Controller and Accountant-General or a representative of the
Controller and Accountant General; and
(i)
five other persons representing the private sector.
(2) The members of the Board shall be appointed
by the President acting in consultation with the Council of State.
(3) The President shall in appointing the
chairperson and the other members of the Board have regard to the integrity,
knowledge, expertise and experience of the person and in particular their
knowledge in matters relevant to the functions of the Board.
Functions of the Board
11. (1) The Board shall manage and administer the Fund.
(2)
For the purposes of subsection (1) the Board shall
(a)
pursue policies to ensure the achievement of the object of the Fund;
(b)
collect or arrange for the collection of monies assigned to the Fund;
(c)
collect for money in the Fund by defining appropriate procedures for
the management of the Fund;
(d)
in consultation with the Minister formulate policies to determine among
others;
(i) the level of interest rate chargeable on
any credit facility granted under this Act; and
(ii) the maximum credit facility that may be
granted to an applicant;
(e)
appoint designated financial and other institutions which shall grant
credit facilities;
(f)
receive and examine reports from designated financial institutions and
other institutions in respect of credit facilities granted by them;
(g)
with the approval of the Minister prepare and publish criteria for the
disbursement of moneys from the Fund to designated financial institutions and
other institutions;
(h)
monitor the progress of successful applicants granted credit facilities
under this Act, through agents assigned for the purpose; and
(i)
perform any other function conferred on it under this Act or incidental
to the achievement of the object of the Fund.
Tenure of office of members
12. (1) The chairperson and any
other member of the Board other than an ex officio member shall hold office for
a period not exceeding four years and are on the expiration of that period
eligible for re-appointment for another term only.
(2) A member of the
Board other than an ex-officio member may at any time by letter addressed to
the President through the Minister resign from office.
(3) A member who is
absent from four consecutive meetings of the Board without sufficient cause
ceases to be a member of the Board.
(4) The chairperson or
any other member of the Board may be removed from office by the President for
inability to perform the functions of the office, for stated misbehaviour or
for any other just cause.
(5) The chairperson of
the Board shall notify the Minister of vacancies that occur in the membership
of the Board within one month of the occurrence of the vacancy.
(6) A person appointed
to fill a vacancy shall hold office for the remainder of the term of the
previous member and shall subject to the provisions of this Act be eligible for
re-appointment.
Meetings of the Board
13. (1) The Board shall meet for
the dispatch of business at times and in places that the Board may determine
but shall meet at least once every two months.
(2) The chairperson
shall upon the request of not les than one third of the membership of the Board
convene a special meeting of the Board.
(3) The quorum at a
meeting of the Board shall be six members.
(4) The chairperson
shall preside at every meeting at which the chairperson is present and in the
absence of the chairperson a member of the Board elected by the members present
from among their number shall preside.
(5) Questions before the
Board shall be decided by a majority of the members present and voting.
(6) The chairperson or
the person presiding at a meeting of the Board shall in the event of equality
of votes have a second or casting vote.
(7) The Board may co-opt
any person to act as an adviser at its meetings but no co-opted person is
entitled to vote at the meeting.
(8) The validity of the
proceedings of the Board shall not be affected by a vacancy among its members
or by a defect in the appointment or qualification of a member.
(9) Except as otherwise
provided under this section, the Board shall determine and regulate the
procedure for its meetings.
Committees of the Board
14. The Board may for purposes of
achieving the object of the Fund appoint committees of the Board comprising
members of the Board or non-members or both and may assign to them such
functions as the Board may determine except that a committee composed entirely
of non members may only advise the Board.
Disclosure of interest
15. (1) A member of the Board who
has an interest in any matter being considered or dealt with by the Board shall
disclose the nature of that interest at a meeting of the Board and shall not
take part in any deliberation or decision of the Board with respect to the
matter.
(2) A member who has an
interest but who fails to disclose that interest under subsection (1) shall be
removed from the Board.
Allowances for members of the Board
16. The chairperson and other
members of the Board shall be paid such allowances as the Minister in consultation
with the Minister responsible for Finance may determine.
PART II - ADMINISTRATIVE,
FINANCIAL AND MISCELLANEOUS
PROVISIONS
Chief Executive
17. (1) There shall be appointed
by the President in accordance with the advice of the Board given in consultation with the Public Services Commission a
Chief Executive.
(2)
The Chief Executive shall hold office on the terms and conditions
specified in the letter of appointment.
(3)
The Chief Executive shall be the secretary to the Board
(4)
Subject to the directives of the Board the Chief Executive shall be
responsible for the day to day administration of the affairs of the Board and
shall ensure the implementation of the decisions of the Board.
Appointment of other staff
18. (1) The President acting in
accordance with the advice of the Board given in consultation with the Public
Services Commission shall appoint other officers or employees necessary for the
effective performance of the functions of the Board.
(2) The President may
delegate the power of appointment of public officers under this Act in
accordance with article 195(2) of the Constitution.
(3) The Board may on the
recommendations of the Chief Executive engage the services of experts and
consultants as the Board may determine.
Borrowing powers
19. Subject to Article 181 of the
Constitution and any other enactment, the Board may obtain loans and other
credit facilities on the guarantee of the government from banks and other
financial institutions that the Minister in consultation with the Minister for
Finance may determine.
Accounts and audit
20. (1) The Board shall keep
books of accounts and proper records in relation to them and the books of
account and records shall be in such form as the Auditor-General may approve.
(2) The books of account
kept for the Fund by the Board shall be audited by the Auditor-General or by an
auditor appointed by the Auditor-General on the recommendation of the Board.
Annual report
21. (1) The Board shall submit to
the Minister as soon as practicable and in any event not more than four months
after the end of each financial year a report dealing generally with the
activities and operation of the Fund during the year to which the report
relates and shall include
(a)
the audited accounts of the Fund and the Auditor-General's report on
the accounts of the Fund; and
(b)
other information that the Board considers necessary.
(2) The Minister shall within
two months after the receipt of the annual report submit the report to
Parliament with any statement that the Minister considers necessary.
Financial year
22. The financial year for the
Fund shall be the same as the financial year of the Government.
Regulations
23. The Minister on the advice of
the Board may be legislative instrument make regulations for the effective
implementation of the provisions and object of this Act.
Transfer of money
24. The total sum of money
constituting the Business Assistance Fund and any interest on that money
located in any bank account for the business Assistance Fund is hereby
transferred into the Fund established under section 1 subject to any payment
required from the Business Assistance Fund on the date of the coming into force
of this Act.
Interpretation
25. In this Act, unless the
context otherwise requires
"applicant" means
a person who applies to a designated financial institution or any such approved
institution for a credit facility;
"Board"
means the Board established for the Fund under section 10;
"credit facility"
means any facility designated by the Board to serve as means of financial
assistance or relief for an applicant under this Act.
"enterprise" means
an industry, project, undertaking or economic activity to which this Act
applies or an expansion of that industry, undertaking project or economic
activity or any part of that industry, undertaking, project or economic
activity;
"financial
institution" means an institution incorporated under the laws of Ghana and
recognised by the Bank of Ghana as carrying on the business of banking or
providing credit and approved and designated by the Board to transact business
for purposes of this Act'
"Fund" means
the Ghana Investment Fund established under section 1;
"institution"
means a body corporate that is approved and designated by the Board to transact
business for the purposes of this Act;
"Minister"
means the Minister responsible for Trade and Industry;
"Ministry"
means the Ministry of Trade and Industry.
Date of Gazette
notification: 18th January,
2002.