Trade minister urges MSMEs to drive sustainable economic growth

The Minister of Trade and Industry, K.T. Hammond, has called on Micro, Small, and Medium Enterprises (MSMEs) to intensify their efforts in driving sustainable economic growth and job creation.

Speaking at the launch of the new Ghana Enterprises Agency’s classification of MSMEs regulation 2023, he said the sector is a critical component of the country’s “strategic blueprint for diversifying its non-oil economy.”

Ghana, according to the according to the 2023 Annual Non-Traditional Exports Statistics Report, recorded an 11.75% increase in Non-Traditional Exports (NTEs) earnings, reaching US$3.94 billion and accounting for 24% of total merchandise exports.

“It is in this context that my Ministry is looking at identifying such MSMEs with high potential and to support their capacity building and expansion,” Mr. Hammond said and that that the trade ministry was working assiduously to enhance the contribution and performance of the MSME sector, while forging a path towards a future defined by innovation, growth, and opportunity.

Considered the lifeblood of the struggling economy, MSMEs constitute about 90% of businesses, 80% of the workforce and 70% of GDP. They are diverse and varied, ranging in size and structure, producing a wide array of products and services, and utilizing different levels of technology.

A notable portion of these enterprises operate within the informal sector, contributing significantly to employment and income generation, making the sector crucial for women, the youth, and persons who are physically challenged, providing them with essential opportunities and sustaining their livelihoods, as well as that of their families.

New GEA classification of MSMEs regulation 2023

Touching on the new regulation, the minister said the development would provide a clearer framework for categorizing and supporting MSMEs, ensuring they receive tailored assistance that reflects their unique needs and potential for growth.

“This will help streamline policies, enhance access to resources, and create a more conducive environment for MSMEs to grow and succeed. In addition, the classification will ensure that practically, all organizations, including financial institutions, treat MSMEs at different levels on a needs-basis instead of the “one-size-fits-all” approach,” he stated.

Explaining the need for the new regulation, Mr. Hammond stated that the broad and often generalized classifications used over the years provided by various stakeholders have not adequately captured the heterogeneous nature of MSMEs in the country which led to inconsistencies in policy analysis and implementation, often resulting in interventions that appear random and less effective.

The earliest classifications of MSMEs in Ghana date back to the 1980s.

Since then, “our economy has expanded, our population has grown, technology has advanced, and globalization has reshaped our markets. These factors necessitated a reclassification of MSMEs to align with contemporary economic realities,” he stated. “In response to these demands, and pursuant to Section 32, subsection (a) of the Ghana Enterprises Agency (GEA) Act, 2020, Act 1043, new thresholds for Micro, Small, and Medium Enterprises (MSMEs) prescribed by my Ministry have been approved by Parliament.”

The Chief Executive Officer of the GEA, Kosi Yankey-Ayeh added that launch of the new GEA (Classification of MSMEs) Regulation, 2023, was a critical step forward in the agency’s efforts to create a more supportive enabling environment for MSMEs to grow and thrive.

“The new Ghana Enterprises Agency (Classification of Micro Small and Medium Enterprises) Regulation, 2023 provides a clear and comprehensive framework for defining and categorizing MSMEs in Ghana. This classification will help us deliver on our mandate more effectively, improve coordination among Government Institutions, Development Partners, and the Financial Sector, and enable MSMEs to access targeted support and resources,” she said.