DISTRICT INDUSTRIALISATION FOR JOBS &WEALTH CREATION
1 District 1 Factory Overview of the initiative About the initiative One District One Factory initiative was instituted by His Excellency, President Nana Addo Dankwa Akufo-Addo, to address the challenge of slow economic growth at the district level. The initiative aims to achieve this through a massive private sector led nationwide industrialisation drive, which will equip and empower communities to utilise their local resources in manufacturing products that are in high demand both locally and internationally. This will allow the country to reap the rewards of industrialisation, increase agricultural and manufacturing output, reduce reliance on imports and increase food availability. The programme is expected to facilitate the creation of between 7,000 to 15,000 jobs per district and between 1.5 million and 3.2 million jobs nationwide by end of 2020 2
Objectives Increase job creation Objectives & Mission Promote rural income generation through grass-root participation in industrial and commercial activities Promote import substitution for currency stability Promote income generation for a wide range of producers Increase revenues through exports Attract and Improve profitability of investors Provide necessary incentive to increase yield of domestic output. Mission Statement The mission of the programme is to identify and create business opportunities in the districts, harnessing the strengths and resources of the locals in an efficient technology and demand driven value chain. 3
The Secretariat Established under the Office of the President, the One District One Factory Secretariat is to fast-track this initiative by providing the presidency a direct oversight of the industrialisation agenda. The Secretariat oversees the implementation of the One District, One Factory programme by providing a direct link to all key stakeholders and related institutions. Led by the National Coordinator, Mrs. Gifty Ohene-Konadu, the Secretariat works with Technical advisors and representatives of relevant stakeholder institutions. Stakeholder institutions include EXIM Bank, GIPC, EPA, Municipal & District Assemblies, NBSSI, AGI, Chamber of Commerce, Ghana Standards Authority, CSIR, and other government institutions. 4
Services of the Secretariat Investor Matching (International and local) Credit The project would support projects from a minimum of USD 5,000 and a maximum of USD 5 million based on project size and operational categorisation. Credit to businesses will come in the form of Equity; Long and short term trade financing; Long and short term asset financing. Technical Assistance Services Business assessment and assistance with developing a growth strategy; Capacity building, Mentoring and coaching; Provision of networking opportunities; Assistance with financial planning and financial management; Assistance with regulatory and legal compliance; Links to strategic partners for market and community access facilitation; Sector specific technical support including project management, quantity surveying and engineering services etc.; 5
Target Industries Input/Raw material Production (For groups/cooperatives) Agro Processing and business Textiles and Clothing ICT Pharmaceutical and Cosmetics Waste Management Distribution and Trading Tourism, Arts and Crafts 6
Target Groups The target group is segmented to cover: 1. Existing businesses that are ready to move to the districts and expand their operations. 2. New businesses that seek to operate within the districts and have the capability of sourcing for raw materials and employing 5-25 people from the district through their operations. 3. Businesses that have the capability of enhancing the operations of input providers and suppliers towards the demand of factories in the districts 4. Businesses whose operations focus on distribution and market access for goods produced in the districts. 5. District-level businesses which have the potential to grow but need all or any of the below: a. Technical support b. Long term investment c. Standardisation to meet competition d. Brand improvement e. Market access 7
Financing Bracket Category Investment required Micro scale Enterprises US$50,000 Small scale Enterprises US$100,000 Medium scale Enterprises US$1,500,000 Large scale Enterprises US$5,000,000 8
Application Assessment & Approval Process 1. Confirmation of Receipt of Application via phone or email. 2. Initial Screening & Due Diligence 3. On-Site Due Diligence 4. Credit Assessment 5. Compilation of Reports 6. Assessment Committee 7. Contracting and Disbursement The Secretariat is able to complete the entire process in 10 days from the date all the information is furnished by the applicant and due diligence is complete. 9
Overview of the implementation plan A comprehensive implementation plan has been created to commission factories as follows: Minimum of 40 in 2017 Minimum of 60 in 2018 Minimum of 60 in 2019 Minimum of 66 in 2020 Project will be financed mainly by private capital from various sources, including Financial investors such as Private Equity funds, banks and international pension funds Strategic and trade investors, large and small Development finance institutions and impact investors Ghanaian investors, both institutional and individual Government will also provide financial and regulatory support for the initiative 10
Capturing the opportunity requires a strategic, phased and well coordinated execution effort (1/2) Phase 1: Immediate Impact Complete projects in next 6-9 months Phase 2: Bulk Execu=on 2 year execu?on of majority of projects Phase 3: Commissioning Comple?on of target factories and full commissioning Today 2017 2018 2019 # of factories commissioned 40 60 60 66 GDP Contribu=on Jobs created $236 mm $472 mm $472 mm $520 mm ~300k ~600k ~600k ~700k Total Investment Made $80 mm $160 mm $160 mm $170 mm Percentage completed 14% 42% 70% 100% 11
Capturing the opportunity requires a strategic, phased and well coordinated execution effort (2/2) Phase 1 Immediate Impact # of Projects 40 Today Identify and push ongoing short term projects to completion (3-6 months) Structure financing and investment options to offer investors Compile, categorize projects and investors and begin initial matching Set up project secretariat office 2017 2018 2019 Phase 2 Bulk Execution 120 Develop business plans for identified initiatives by district Size overall impact of 1D1F on Ghana Finalize comprehensive financing need, returns and investor/funding matching by district Build factories Create sustainability plans for factories to ensure long term sustenance of 1D1F initiatives Phase 3 Commissio ning 66 Commission and launch of factories across all districts Review and monitoring of all executed initiatives 12
Financing for the projects will come from three main sources GoG, international & local investors 1 2 Government of 3 Entrepreneurs/Local Ghana partners Interna?onal investors Provide capital and local knowledge, context, and relationships Provide project facilitation, policy incentives and capital when required Financial investors Strategic investors Development finance institutions (DFIs) Impact investors and grant providers International investment funds investing $10-100million per project Focus on attractive returns and exit options Companies looking for expansion or vertical integration Typically bring both capital and technical support Government backed development institutions More flexible terms than financial investors Provide capital to high social and environmental impact projects Less focus on generating market returns 13
1D1F Secretariat Structure 1D1F Secretariat structure will ensure effective management of the varied entities that approach the Secretariat Interested Entities 1D1F Secretariat AGI Interna=onal Investor Review submiqed business plans/ideas Filter using pre-defined criteria 1 Repository of viable business plans Strategic Investor Ghanaian Business Ghanaian Entrepreneur Other Govt Agencies Impact Investor Ghanaian Investor DFIs GIPC Mul=na=onal Business Foreign Governments Segment en??es into 1. Funds provision 2. Business ideas 3. Support Compile business plans that qualify Iden?fy type of support being provided (e.g., technical, incen?ves) Re-direct support to businesses that benefit from it Understand investor profile Match investor to projects that fit profile 2 3 Facilitate Support for Entrepreneurs and Investors Investors matched to appropriate projects Facilitate investment terms and condi?ons 14
Key Milestones Achieved Since Project Secretariat Setup The Secretariat has set up the project office and launched its website Most officers have been recruited to assist the National Coordinator deliver on immediate targets The Secretariat has developed a road map and target timelines The timeline takes into considerations the expectations of the President and the practicalities of setting up each factory The Secretariat has received over 200 requests for support so far The Secretariat has evaluated all requests and drawn up a list of 25 projects to be considered for the first 10 to be implemented The Secretariat has also met with over 50 investors to discuss ways they can support the initiative These investors, both local and international, include financial, strategic and development focused institutions 15
Activities & Outputs (April-June 2017) Ac=vi=es - On track to commission 10 factories by end of June 2017 Apr 20-26 2017 May 8-12 2017 May 15-19 2017 May 22-24 2017 May 24-29 2017 May 29 June 9 2017 Shortlist 25 businesses to focus on Review list from secretariat s initial district visits Field visits to shortlisted businesses Data collection Begin evaluation to pick 10 business to further develop for June commissioning Update The President on the selected businesses and solicit feedback Notify selected businesses of their approval Begin preparation of master communication plan for commissioning Engage businesses to better understand their needs Address needs and resolve issues for businesses (e.g., land acquisition, equipment procurement, financing) Begin development of comprehensive business plans to ensure sustainability Jun 12-30 2017 Commence commissioning of 10 factories Outputs April 23 2017 May 12 2017 May 24 2017 May 29 2017 June 9 2017 Launch communications around commissioning List of 25 Identified businesses Initial assessment of businesses Overview template per business List of 10 factories selected* for commissioning Framework/ Justification for selection Communication master plan with consistent messaging for engagement across all media platforms (TV, radio, newspapers, social media, etc.) Database of businesses with their needs and proposed resolution plan Complete Launch Plan for Commissioning including Talking points for The President 16
Thank You Visit our website: www.1d1fghana.org Email: info@1d1fghana.org 17