Transparency in business attractive to investors— Mike Carter

A business finance expert has urged businesses in the country to be transparent in their operations and business record disclosures to make them attractive to international investors.

The founder of a project finance entity, International Financial Portions, Mr Mike Carter, said the lack of transparency and failure to disclose the true health of businesses was partly the reason why African countries could not attract funds from international financiers and banks for investments.

"I will be very honest with you, businesses in Ghana cannot access funds internationally because they hold back information that financiers need to get a real picture about their entities”.

"I was in Ghana in 2016 and engaged many companies, and the impression I got is that they are not used to being open about their operations,” he added.

Mr Carter further stated that investors and banks needed to know all about companies, “whether good or bad; assets and liabilities; they want to know if they have cash and where the cash was; and they also want to know whether companies have land, if they own that land with partners or families and whether the lands have any debts on them”.

“They need a full picture about all these to be able to decide whether to give funds or not,” he said.

Conference

Mr Carter was speaking at the opening of a three-day project finance conference in Accra yesterday.

The conference is a collaboration between Graphic Business, a member of the Graphic Communications Group Limited (GCGL), and Trustwork Oakbuild International Limited (TWOBIL).

It is to help build the capacity of local businesses on how to develop good project documents that can attract international financing.

The partnership is also geared towards the establishment of a platform to address project finance gaps and an interface between local companies, international finance agencies and banks.

Participants included businesses from Ghana, Nigeria, Kenya and other African countries.

Experiences

Mr Carter said the initiative was a step in the right direction and that it had offered him an opportunity to share his 31 years of experience in project finance with local companies to help them compete for international funds.

"In my 31-year experience in the finance sector, I have been presented with a lot of projects and when I read them, I do not really see compelling content that will grab the attention of international financiers and banks. There is a gap in the content so I will, through this conference, highlight what the international banks are saying and how we can bridge that gap," he said.

Challenges

The Director of Technical Services at TWOBIL, Dr Emmanuel Tweneboah Senzu, said local businesses found it difficult to attract needed funds from international establishments because foreigners lacked confidence in the data generated by those companies.

He said the GCGL-TWOBIL collaboration would, therefore, lead to the institutionalisation of systems and the creation of a secretariat which would be an interface between local companies and international financial institutions.

"The biggest challenge with international funding is not because the financiers do not believe in Africa; the challenge is that they do not trust in African systems of operation," Dr Senzu stated.

Financial sector reforms

He said most financial institutions in the country collapsed because fund managers could not attract the right international funding.

"The institutions collapsed because they were trying to reach a certain capital base, but they were unable to get any international promoter to give them the funding because there was a problem with their system; and this is what we seek to address with the initiative of a secretariat," the director added.

GCGL collaboration

For his part, the Director, Marketing, of the GCGL, Mr Franklin Sowa, said the GCGL offered to participate in the programme because project financing was a measure to help address the gap in accessing funding for local businesses.

“GCGL became interested in this platform because as a media house, we have a lot of information and that gives us an understanding of the business terrain. It is obvious that there is a gap in funds we require, the cost at which we access those funds and the availability of the funds,” Mr Sowa added.