Ms Abena Amoah, the Deputy Managing Director of the Ghana Stock Exchange (GSE), has disclosed that the Ghana Alternative Market (GAX) has signed a Memorandum of Understanding (MoU) with some relevant organizations to support Small and Medium Enterprises (SMEs).
According to the Deputy Managing Director, Small and Medium-sized enterprises listed on the Ghana Alternative Market will be able to access low-cost, long-term debt following an arrangement between the Ghana Stock Exchange (GSE), Development Bank Ghana (DBG) and Association of Ghana Industries (AGI).
“The Ghana Stock Exchange, together with the Association of Ghana Industries and the Development Bank of Ghana– which has been set up to support SMEs, especially those operating in the food and agriculture sectors, with financing – have entered a memorandum of understanding together to support companies like Samba… providing support to such businesses is why we set up the GAX.”
Ms Abena Amoah
This was disclosed by the Deputy Managing Director of the Accra bourse when food processing company Samba Foods took its turn at a Facts Behind the Figures session organised by the Exchange.
Ms Abena indicated that while the arrangement will provide debt facilities to these businesses, it is expected to be structured in a manner that will not prove a long-term disincentive to the listed companies from seeking equity financing or utilising the Ghana Fixed Income Market (GFIM).
Appeal for Officialdom
Ms Abena Amoah’s comment was partly in response to a plea by the founder and Chief Executive Officer (CEO) of Samba Foods, Leticia Osafo Addo, for support to small businesses especially for capital expenditure.
“Samba Foods and other small businesses would like to make a passionate appeal for officialdom and our shareholders and clients to put in place targeted and holistic support for companies within the space,” said Mrs. Osafo-Addo, whose company was first to list on the GAX.
“For instance, replacing equipment is a very important part of the production process; but when small businesses seek to do this, there is scarcely any avenue for them to turn to… I would appreciate an intervention to remedy this, as I can say I have experienced it first-hand.”
Mrs. Osafo-Addo
The appeal came as the condiment manufacturer revealed that due to a breakdown of its primary packaging machine, as well as issues with its packaging leading to leakages, her outfit was able to fulfil less than half of the market demand in 2021.
Leticia Osafo Addo disclosed that Samba Foods produced approximately 750,000 sachets of its lead products – shito (pepper sauce) and spices – against a market demand that was above 1.5 million sachets (15,000 boxes).
Mrs. Osafo-Addo, however, stated that the company which raked in GH¢1.06million revenue for 2021 will be able to meet much of the market demand in the near-term, having replaced the faulty machine and made progress with its packaging.
“It is our goal to increase turnover by over 55 percent, total revenue progressively by 15 percent up to 50 percent quarterly, and to increase net profit by 50 percent annually.”
Mrs. Osafo-Addo
Samba Foods, similar to the five other companies listed on the GAX, has seen its share price remain flat over the past year at GH¢0.55 with 5.98 million outstanding shares and a market capitalisation of GH¢3.29 million.
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