Developing Small and Medium Enterprises in Ghana for Economic Development

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To me, it was no surprise that the soft-spoken finance minister, Ken Ofori-Atta, had indicated that “the government’s payroll is full”. The state-centered employment system should be complemented by the private sector. Unfortunately, the slow growth and expansion of the private sector is bleak and problematic.

During this time, from Ghana the private sector is dominated by Small and medium enterprises (SME) with just over 90% market share. SMEs employ 60% of the workforce and add 70% to gross domestic product (GDP). Notwithstanding the contribution to employment and GDP, SMEs face the critical challenge of financing, among others.

By definition, SMEs are a heterogeneous group, ranging from the simple craftsman producing tools to the owners of cafes and cybercafés in small towns. However, the statistical definition takes into account the number of employees to classify a company as an SME.

In general, SMEs are companies with 200 to 250 employees, with Japan and the United States with 300 and 500 employees respectively as exceptions. Support and strengthen SMEs in Ghana employing even the global standard number of employees can be a game-changer in the country’s employment trajectories, especially as additional employment opportunities are required from the private sector to alleviate pressure on the sector’s employment system formal.

This article therefore seeks to discover and chart pathways for the growth and development of SMEs in order to provide jobs and livelihoods for the population, increase productivity to improve GDP and support growth and development. economic.

Sustainable public finance is essential for the growth of SMEs in Ghana and requires a cross-cutting strategy that touches on the government’s ability to finance the development of healthy business environments, a sufficiently healthy and flexible workforce, as well as capable and functioning public and private institutions.

A so-called financial public policy regime should be enacted to provide seed capital to start-ups and SMEs struggling to survive to compete in a hostile business environment, with unbridled funds flowing in and out. international to subsidiaries of parent companies under the guise of financial globalization. .

Integration of SME development through trade and investment, into the broader national development strategy and / or poverty reduction and growth policies Ghana is an important path to success.

These growth policies, among others, involve “Planting for Food and Jobs” and the industrialization program of “One Factory of the first district“The incorporation of SMEs into local, national and global markets is vital for growth and expansion, as the availability of large and ready markets will influence increased production of goods and services and capacity through application. technological innovation.

The Free African Continental Commercial zone (AfCFTA), which promises a single market of over 1.3 billion people, is an example of policy harmonization that catapults the continent into a more global marketplace, namely the Law on growth and opportunities in Africa (AGOA).

AGOA is the economic policy and trade commitment of the United States with Africa and provides eligible sub-Saharan African countries with duty-free access to the US market for more than 1,800 products and 5,000 goods eligible for duty-free access under the Generalized System of Preferences program.

The development of institutional and physical infrastructure focused on enterprises contributes to the growth and development of SMEs. The institutionalization of appropriate infrastructure provides simplified legal and regulatory frameworks, good governance, abundant and accessible, and enforceable macroeconomic policies as levers for the growth and expansion of SMEs in Ghana.

Indeed, low budget deficits, inflation, a stable and transparent monetary regime and a competitive exchange rate ensure the minimum stability that companies need to make sound business decisions.

The establishment of industrial parks and business incubators is also essential to provide appropriate development services to SMEs in the framework of simple technological applications and innovations, as well as to launch cluster initiatives to improve their global competitiveness while by increasing corporate profits, employment capabilities and higher productivity.

Capacity building is crucial for the survival of SMEs in Ghana because these business units are generally managed by their owners and most owners have little management expertise, including the knowledge and skills to run successful businesses.

Although some forms of skills, informally and / or formally, have been able to be developed. However, the right attitude and work ethic, maintenance, the law, customer service as well as civilian life are most often lacking. Improved workforce skills are essential for the commercialization of brands and commodities for a significant market share.

Enforcement of contracts and establishment of property rights are essential for the growth, development and success of SMEs. As important innovators, SMEs must protect their intellectual capital through formal legal rights such as patents or copyright, or contractual agreements.

Making these legal rights accessible, cheaper and shorter will benefit SMEs and protect them from the vulnerability of hackers, which has the potential to set back the development of promising businesses.

Remedies, when violations are found, should be provided and made affordable through the formal institutional support system.

The writer is chief of Monitoring and Evaluation Department,

Ministry of Tourism, Arts and Culture

Ghanaian Copyright Times. Distributed by AllAfrica Global Media (allAfrica.com)., Source English press service


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