A GNA feature by Elsie Appiah-Osei
Accra, September 28, GNA – Many businesses start small as ideas and dreams that hatch and grow into large corporations.
The journey of small business is often tough and cumbersome as many toddlers never achieve their desired goals.
In Ghana, micro, small and medium enterprises (SMEs) account for about 70 percent of the Gross Domestic Product (GDP), employing more than 80 percent of the workforce.
Despite being the backbone of Ghana’s economy, SMEs face numerous challenges that hinder their growth and potential.
According to a World Bank Business Survey, about 40 percent of SMEs in Sub-Saharan Africa cited access to finance as a major constraint, compared to 25 percent of large firms.
Forty-one percent of SMEs in Least Developed Countries (LDCs) identified financing, high interest rates and collateral requirements as key barriers.
A lack of access to markets and technology compounds their woes as other respondents reported difficulty finding customers and adopting digital solutions.
“The continent’s 600,000 formal SMEs and 40 million+ micro-enterprises represent about 90 percent of all businesses, provide about 80 percent of employment and contribute 40 percent to Africa’s GDP, underscoring their central role in Africa’s economy “, the research. he said.
For example, the Bank of Ghana’s (BoG) Debt Register’s latest report for the fourth quarter of 2023 revealed a significant decline in the total value of guaranteed loans granted and subscribed by banks and specialized deposit-taking institutions.
Compared to the same period in 2022, there was a remarkable decline of 54.9%, with the total value standing at GH¢5.9 billion, from GH¢13.2 billion in the fourth quarter (Q4) of 2022.
“…The biggest challenge we face is access to finance,” said Ms. Genevive Amevor, owner of Taste Bites, a restaurant in Accra.
Confirming the recent report by the Collateral Registry of the BoE, Mrs. Amevor told the Ghana News Agency (GNA) in an interview in Accra that: “Many banks reject us because of lack of collateral. How are we supposed to grow if we can’t get the capital we need?”
Experts have warned that media struggles could have far-reaching economic consequences.
“SMEs are vital for job creation and innovation. They contribute significantly to the GDP of both developed and developing countries in various forms. Dr Martin Thompson Ntem, a digital media expert at the Digital Marketing and Communication Institute of Ghana, said.
“If they cannot access the resources they need, it will stifle economic growth and increase unemployment. SMEs are important employers for young people and first-time job seekers, while also creating jobs in local communities, which contribute to regional development with flexible opportunities that could adapt to market changes,” he said.
Dr Ntem made the remarks during a four-day advocacy training on Health, Climate Change, Gender and Media for GNA journalists and editors from Greater Accra, Tema, Volta and Oti Region
The African Development Bank (AFDB) funded the Post-Covid-19 Skills Development and Productivity Enhancement Project (PSDPEP) training as part of a series of trainings to equip participants with the knowledge and skills needed to create meaningful advocacy messages through audio-visual narration.
Dr Ntem observed that innovation, risk-taking and adaptability were key traits and characteristics of young entrepreneurs aged 15 to 35 who engaged in entrepreneurial activities such as starting new businesses, creating startups and innovating.
To address these challenges, policymakers and industry leaders have advocated for improved access to finance through specialized loan programs and lower interest rates, improved market access through trade agreements and business matching initiatives, and increased support for technology adoption through programs training and development of digital infrastructures.
“The government needs to take concrete measures to support SMEs,” said Ms Georgina Offebia, a fashion designer.
“We need policies that promote entrepreneurship, innovation and job creation,” she told the GNA in an interview.
In response, the government launched the Obantanpa project to provide emergency relief funds to SMEs and entrepreneurs in Ghana for comprehensive and financially sustainable assistance to mitigate the impact of COVID-19. there was also YouStart, a three-year vehicle that supported youth in building commercially viable businesses to create millions of jobs in the economy.
The National Entrepreneurship and Innovation Program (NEIP) was also implemented by the government to provide comprehensive national support to start-ups and small businesses.
While these efforts have been laudable, media and industry leaders agree that more is needed.
“We appreciate the government’s efforts, but we need continued support.” Prince Adufah, CEO of PrinceYOGO, an ice cream company, said.
“We’re not just asking for handouts. we are asking for a level playing field,” he told GNA.
Meanwhile, as the economy evolves, the fate of SMEs remains uncertain.
Will policymakers and industry leaders respond to their plea for help, or will growth barriers continue to stifle the potential of these critical economic players?
GNA
