Business News of 2014-04-04

Economic challenges present opportunity to entrepreneurs

Minister of State in charge of Private Sector Development, Alhaji Rashid Pelpuo says the current challenges facing Government in its management of the country’s economy present the best time and opportunity for entrepreneurs to make money for themselves.

Speaking at the British Council Hall in Accra during the launch of an entrepreneurial training programme dubbed, Enhancing Growth In New Enterprises (ENGINE) yesterday, he emphasised: “Today, the challenges rest on you to find solutions to the problems.”

According to Mr Pelpuo, given the present economic circumstances, students who graduated from tertiary institutions should face life head-on and set up their own businesses since not all of them could be absorbed into the public service.

Dr Ebo Turkson, a senior lecturer at the University of Ghana, in a presentation, cited access to credit as the major constraint to the growth of Small and Medium-scale Enterprises (SMEs) in Ghana.

He appealed to commercial banks which refuse to lend to SMEs on the basis of their volume effect, lack of long-term resources, information asymmetry, difficulty in meeting eligibility criteria for loans, as well as no banking/credit history, to rethink their stance on them.

“Even when collateral requirements are met by SMEs, loans are given at huge interest costs.

Currently, it takes 14 days and eight documents to set up a business in 2014 while it takes 495 days and 36 documents to enforce contracts.

Again, 79 days and four documents are required to install electricity while 34 days could elapse before an owner could register their property.

He mentioned that increased domestic borrowing by the public sector affect SMEs.

Dr Turkson called on Government to minimize regulations and licensing regulations.

John Abanga, Director of ENGINE, said his outfit intends to create over 1,770 new jobs in Ghana.

Engine is a project being implemented by TechnoServe with funding from the UK Government.

DFID will provide 4.1 million Pounds for the programme, which is expected to benefit 1,000 MSEs.