Ashanti Regional Minister Simon Osei-Mensah kicks against scrapping of player signing-on fee – check his reasons

Ashanti Regional Minister, Hon. Simon Osei-Mensah has kicked against the idea of scrapping payment of lump sums of money to players as signing-on or enticement fees as proposed by many.

According to the Finance expert, it will be a cheat to spread the money for a given period time for the players due to the principle of ‘Time value of Money’.

The enticement fee is a lump sum paid upfront to a player when he agrees to join a club or when renewing his expired contract. The practice is seen by many as a nemesis to the local league. Some believe that the practice impacts heavily on the finances of the local clubs.

Reports in the local media suggest that the practice is being proposed by the current leadership of the two most glamorous clubs Asante Kotoko and Hearts of Oak.

Speaking in an interview with Kumasi-based Hello FM, Simon Osei Mensah indicated that efforts should be taken to rather guide the players to know much about how to invest their monies in financial institutions who are into an investment, noting that the players may be cheated if the money is spread for them.

If they really want to help the players they should assist them to know how to invest the money. The players will be cheated if they spread it. In finance, we have something we call the time value of money. What 1000 Ghana cedis was used to do in January will not be able to do the same now.

Secondly, if the player had invested that same 1000 Ghana cedis, he would have earned much interest on his money.

So, if you’re spreading the money equally without considering the interest that would be accrued on their money, then it is not the best, it’s a cheat.

“If they want to help them, they should guide the players to engage an investment company to help them with investment opportunities available, ” he told Hello FM.

“Even if they don’t put it in an investment which is liquid but decides to purchase a plot of land, the cost of it will appreciate in two years time.

“I think if the signing-on fee is there to give it to them in bulk, they should help them to invest the money rather than saying they are increasing their monthly salaries.

“If they get it in bulk, and even invest in Treasury bills, by the time their career comes to a close, they will get good money.

“But if you decide to spread it, only a few of them can manage and save.

“I know they want to help the players, but they should select the best option, ” he added.