By Kofi Ahovi
The Ministry of Finance and Economic Planning is seriously considering channeling about 10% of proceeds from the Communication Services Tax, popularly known as talk tax, to the Venture Capital Trust Fund (VCTF).
BusinessWeek has gathered that this, if done, will help boost the Fund’s financial muscle to enable it venture into capital intensive investments such as the building and construction industry.
Initially VCTF was being financed through the National Reconstruction Levy (NRL), from which it received 25% annually but since its abolition in 2006, there has been no alternative funding.
To address this, board members of VCTF went into consultation with government through the MOFEP to source for alternative funding.
Since its inception this year, the talk tax, which was set up primarily to finance the National Youth Employment Program, has accrued more than GH¢4m. VCTF on the other hand, started with total seed funding of GH¢22.4m and received an additional GH¢2.3m through its investments for the year 2007.
Dr. Samuel Ashong, chairman of the board of trustees, told Business Week that though they are in talks with the government on alternative source of funding, they have not agreed conclusively on funding VCTF with talk tax proceeds.
According to the VCTF, within the first seven years when all funds are fully invested and no investment has matured or exiting with returns, there is the strong need for the VCTF to continue to receive funds until investment proceeds are received and recycled to other approved companies to continue the investment process.
The CEO of VCTF, Nana Osei Bonsu, earlier told Business Week that in the coming years more companies would fall on VCTF for funding and therefore government should to provide alternative funds to boost the fund’s coffers.
The Fund currently has about GH¢56.9m in its coffers yet to be earmarked for investments. The fund has so far invested in 21 companies at an estimated value of GH¢11.9m. The investments cover companies in the agriculture, education, poultry, finance, pharmaceuticals, ICT and environmental (waste management) sectors.
The Ministry of Finance and Economic Planning is seriously considering channeling about 10% of proceeds from the Communication Services Tax, popularly known as talk tax, to the Venture Capital Trust Fund (VCTF).
BusinessWeek has gathered that this, if done, will help boost the Fund’s financial muscle to enable it venture into capital intensive investments such as the building and construction industry.
Initially VCTF was being financed through the National Reconstruction Levy (NRL), from which it received 25% annually but since its abolition in 2006, there has been no alternative funding.
To address this, board members of VCTF went into consultation with government through the MOFEP to source for alternative funding.
Since its inception this year, the talk tax, which was set up primarily to finance the National Youth Employment Program, has accrued more than GH¢4m. VCTF on the other hand, started with total seed funding of GH¢22.4m and received an additional GH¢2.3m through its investments for the year 2007.
Dr. Samuel Ashong, chairman of the board of trustees, told Business Week that though they are in talks with the government on alternative source of funding, they have not agreed conclusively on funding VCTF with talk tax proceeds.
According to the VCTF, within the first seven years when all funds are fully invested and no investment has matured or exiting with returns, there is the strong need for the VCTF to continue to receive funds until investment proceeds are received and recycled to other approved companies to continue the investment process.
The CEO of VCTF, Nana Osei Bonsu, earlier told Business Week that in the coming years more companies would fall on VCTF for funding and therefore government should to provide alternative funds to boost the fund’s coffers.
The Fund currently has about GH¢56.9m in its coffers yet to be earmarked for investments. The fund has so far invested in 21 companies at an estimated value of GH¢11.9m. The investments cover companies in the agriculture, education, poultry, finance, pharmaceuticals, ICT and environmental (waste management) sectors.
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