One of the greatest achievements of the Ghana Investment Promotion Council (GIPC) is the introduction of Ghana Club 100 (GC 100) in 1998. The GC 100 is made up of the top 100 high performing companies in Ghana from both public and private sectors. According to GIPC reports the idea behind the creation is to provide a world-class forum for top ranking businesses to interact and share techniques for the overall benefit of the economy. The listing, grading and awarding is carried out annually. During the events new companies could be upgraded and old ones eliminated from the list. This is very noble idea and I will like to commend the initiators of such fine idea.
The GIPC reports went on to say that at the inception of GC 100 in 1998 the total turnover of members companies was 6.5 trillion cedis and a total net asset was 9.7 trillion cedis with 1.03 trillion cedis in pre-tax profits. In the maiden edition of GC 100 Ashanti Goldfields Company Limited took the top spot as a leading performer in the mining sector. Volta River Authority (VRA) was adjudged the highest net asset- based company and top performer in the energy sector. Social Security and National Insurance Trust (SSNIT) was the highest profit making company in the financial sector. (www.gipc.org.gh/gc100)
Evaluation GC100 members
In 1998 when GC 100 was introduced GIPC evaluated companies on the basis of their net asset size, profit before tax, number of employees, return on equity and growth trends. This evaluation gave state owned companies advantage over the private companies, so state owned companies like SSNIT, Ghana Oil, Ghana Telecom, VRA, and State Insurance dominated the programme. Taking a close look the criteria, its evident very few private owned companies could compete with the state owned ones for the top spots.
For instance the use of net assets size, employee numbers and growth trend will put, companies like SSNIT, VRA, Ghana Telecom and Ghana oil way ahead of other competitors. Very few private companies in Ghana could employ more staff than the above named companies. Besides only few private companies could declare more profit or have more net asset size than any of them. The criteria were flawed on the onset and drew a lot of criticism from the Ghanaian business community. Some critics argued the criteria resulted in loss making companies appearing on the list thus defeating the purpose for which it was introduced.
Talking about loss making companies I believe the critics were right. Some few years down the line some of these highflying companies, which were top on the list, either went into administration or were acquired by other companies. A typical example is VALCO an aluminium smelting company, which was owned by the Kaiser Aluminium Corp of the USA. It folded its operations in Ghana and sold its holding to the Ghana Government. Another example is Ghana Telecom. It went into administration and was put up for sale. Vodafone, a very reputable company, later acquired it. (www.gipc.org.gh/gc100)
New Changes
Amidst the criticism and call for changes GIPC reviewed the criteria for selecting members of the Ghana Club 100, citing implementation problems. In the course of the review some very important changes were made. For instance companies with 100 per cent government holdings were disqualified from participating in the programme. Only limited liability companies with less than 50 per cent government shareholdings were allowed to take part. Qualifying companies must also post positive cumulative net profit for three years running prior to the competition. Apart from turnover companies were also judged on profitability, turnover, and growth rate in turnover and net assets. The review made it possible for small businesses to participate in the programme. The GC 100 also became more competitive and attracted more members.
Further changes were introduced in the 2005 edition of GC 100. For the first time in all the edition of the GC100 a company’s corporate social responsibility was recognized. The GIPC considered what it described as six core areas under this element. These are health, education, poverty alleviation, environment, and social care.
Result of the changes
The changes resulted in new and smaller businesses becoming GC 100 members. It also resulted in Rural Banks taking top spots in the GC100 membership. In fact a particular trend emerged in the Ghanaian corporate community as a result of these changes. There was what I will refer to as ‘fairly new business’ taking up centre stage and out performing the more traditional companies. These ‘‘fairly new business’ are businesses which are new entrants in the corporate scene in Ghana compare to the more traditional ones which has been in existence for decades. One such fairly new business’ is MTN Ghana Ltd.
This company provides a telecom services in Ghana. Its service brand the MTN is a leading brand in Ghanaian mobile telecommunication services market and has a very high market positioning in the Ghanaian telecom market. MTN offers both post and pre-paid services to its customers and it’s a market leader in the increasingly competitive mobile communications market with an impressive 60% market share. For four years running Scancom has topped the list for the GC100 as the most fast growing, most profit making and most employerable company in Ghana.
Conclusion
The trend which I referred to was revealed more in 2005 edition of the GC 100. The fairly new businesses (which entered the Ghana corporate world with a storm) out performed the hitherto well established companies like Unilever, Nestle Ghana Ltd etc. Unilever was 39th on the list. Out of the ten best performing companies of the 2005 GC100 seven (7) of them belong to theses fairly new businesses. This should be a big challenge to the Unilevers, Guineas Ghana Ltd etc.
Francis Kwaku Egu, UK
Kwakuhull@yahoo.com
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