About Us
Home / About Us / SPSD

SUPPORT TO PRIVATE SECTOR DEVELOPMENT(SPSD)

Under the Support to Private Sector Development Phase Two(SPSD II), Denmark will provide 400 million Danish Kroner (approx. GHC 115 million) to support efforts at private sector development over the period January 2010 to December 2014.

The programme builds upon the efforts made under the Business Sector Programme Support (2004-2009), but has been named SPSD II in order to emphasize the fact that it supports the Government of Ghana's Private Sector Development Strategy.

The overall development objective of this programme is the creation of decent and sustainable jobs.

SPSD II has two components:

Key partners in the implementation of this programme will be the Ministry of Trade and Industry, the Council for Technical and Vocational Education and Training, as well as other private sector institutions such as business associations, the ARB Apex Bank, and the Alliance for Green Revolution in Africa.

COMPONENT 1 - BUSINESS ENVIRONMENT

The objective of component 1 is to improve conditions for business operations including enhanced local and foreign investor confidence.

The component continues the support initiated in the first phase of the BSPS of the 'Private Sector Development Strategy' and the 'Business Sector Advocacy Challenge Fund' (BUSAC).

1.1 Support to Ghana's Private Sector Development Strategy (PSDS II) Phase II

The Government of Ghana is still preparing the new medium term private sector development strategy. Activities have not been confirmed yet, however, the strategy is expected to continue existing activities while introducing new elements with the objective of enhancing the business environment to promote sustainable, equitable and widespread growth.

Denmark is supporting the implementation of the strategy through a Pooled Fund. The Fund provides budgets to Ministries, Departments and Agencies to implement improvements in the business environment such as e.g. the regulatory environment or in areas of business registration and commercial courts. DKK 45 million (USD 9 million) is allocated in the SPSD II to the Fund. Other contributors to the Fund are the Government, DFID, GTZ and the World Bank.

Although the specific activities under the new Ghana Private Sector Development Strategy are not yet defined, the expected output can be stated as follows;

  • 500,000 new jobs created in the formal sector by the year 2015
  • Ghana ranks among the top 43 countries in the Global competitiveness index
  • Ghana ranks among the top 51 countries in the World in Ease of Doing Business
  • Gross capital formation through private sector investment contributes 40% of GDP
  • 1.2 Business Advocacy Challenge Fund (BUSAC)
  • BUSAC was established in 2004 and supported under the BSPS (2004-2009). It provides grants, training and technical support to Business Associations, Trade Unions and Business Media with the aim of helping them to advocate more effectively for a better business environment, presenting evidence-based arguments and solutions. DKK 40 million (USD 8 million) is allocated to this fund.

    Expected output:

  • Advocacy actions achieve their objectives
  • Strengthened structures for dialogue and advocacy
  • Enhanced advocacy capacity of private sector organisations/business associations
  • Enhanced organisational capacity and competence of private sector organisations/business associations
  • Strengthened Support Service Markets
  • Sustainable and effective coverage of business issues in the media
  • Efficient management and governance of the BUSAC Fund
  • More comprehensive information concerning the programme and its components can be found in the programme documents in the bar to the right.

    COMPONENT 2 - ENTERPRISE GROWTH AND JOB CREATION

    The objective of this component is to increase productivity and employment through broad-based enterprise growth

    Consequently, key challenges in Ghana are adressed: That productivity among Ghana’s MSMEs and farmers is low compared to other Sub-Saharan countries, that commercial banks are unwilling to lend to the agricultural sector, that the agricultural value chain (from soil to table) is deficient, and that small rural banks only provide short term lending that cannot accommodate the requirements of farmers and agroprocessors.

    Direct support for enterprises and farmers are provided through three interventions (sub-components) and partner-ships, none of which were part of the first phase:

    2.1 Skills Development Fund (SDF)

    The Skills Development Fund in Ghana is being established under the Council for Technical and Vocational Education and Training (COTVET). SDF will provide matching grants based on demand for: (i) developing vocational skills of employees in all categories of formal enterprises, (ii) strengthening the skills of entrepreneurs and workers of informal micro/small enterprises, and (iii) developing innovative training products of private and public training institutions.

    Denmark will contribute DKK 65 million (USD 13 million) to the SDF. The other main contributors to the SDF are the Government and the World Bank.

    The expected output can be stated as follows:

    • Increase in number of trainees with gainful employment 12 months after completion of training
    • Increase in number of employers satisfied with trainee’s skills 6 months after completion of training

    2.2 Agricultural Value Chain Facility

    This sub-component aims at enhancing the access to finance and business development services to commercial as well as rural farmers, and actors in the up and down-stream of promising agricultural value chains.

    The support focuses on improving access to medium to long term finance combined with mentorship/technical assistance to key players in the value chains, including commercial farmers, seed producers, input suppliers and agro-dealers, agribusiness and agro-processors, marketers, farmer-based organizations and groups/associations of out-grower farmers.

    SPSD II provides a contribution of DKK 89.5 million (USD 18 million) to this sub-component where the Alliance for a Green Revolution in Africa (AGRA), an international NGO, will be the main implementing partner along with different commercial banks.

    In order to address the issues inhibiting the growth of the agricultural sector, a budget for three facilities will be provided to:

    a) AGRA’s ongoing mentorship services, aimed at enhancing the technical and business skills of farmers and their organisations, as well as rural SMEs in the upstream -and downstream of the value chains

    b) A Financial Capacity Development Facility which on a cost-sharing basis will develop the capacity (and willingness) of participating commercial banks to handle lending for agri-culture, in particular term loans for investments; and

    c) A Loan/Guarantee Facility which will leverage commercial bank lending for the selected value chains.

    Expected output:

    • 50,000 farmers receive technical training and BDS
    • 1,500 SMEs, agro-dealers and micro processors receive mentorship
    • Post-harvest losses reduced to about 10% from presently 30-40%
    • 10 SMEs invest in up-scaling value addition
    • 500 farmer organizations and SMEs access financing
    • 400 farmer organizations trained on contracting and supply requirements

    2.3 Rural Finance

    This sub-component includes a contribution of DKK 86 million (USD 17 million) aimed at improving outreach through Rural and Community Banks (RCBs) of fin-ancial services in rural areas. The ARB Apex Bank (association of rural banks) that is providing banking as well as non-banking services to the rural banks will be the implementing partner.

    The intervention will involve two elements and expected outputs:

    a) management by the ARB Apex Bank of a Rural Finance Wholesale Fund (RFWF)with a budget of DKK 40 million (USD 8 million) for lending to RCBs for on-lending to farmers and rural enterprises to finance investments in productive activities

    b) a contribution of DKK 46 million (USD 9 million) to streng-then the capacity of RCBs, through training and technical assistance services as well as facilitation of mergers of RCBs to improve their capital base and capture economies of scale. Special priority is given to developing the capacity of RCBs to engage in lending for productive activities.

    More comprehensive information concerning the programme and its components can be found in the programme documents in the bar to the right.

    Featured Grantee


    SADA Operational Area

    Featured Grantee Video
    Featured Photo
    Join Us
    BUSAC Fund Social Media - Facebook
    DANIDA USAID EU