Lifeline for SMEs imminent - Trade Ministry

Negotiations between the Ministry of Trade and Industry (MoTI) and business groups – representing government and the private sector respectively, are in advanced stages geared towards implementing a National Policy framework to guide the operations of Small and Medium-sized Enterprises (SMEs).

When implemented, the policy is expected to drive key specific interventions such as credit rating system as well as effective measures to de-risk the business ecosystem which will in turn protect the development of SMEs.

In effect, implementing such a policy framework to streamline the process and ensure growth is however not a new agenda being introduced, as this falls in line with government’s ten points agenda for industrial transformation which lists development of SMEs as one of its core objectives.

The call for this policy framework was intensified during a recently held Ghana Industrial Summit and Exhibition (GISE) 2019 in Accra which was organized under the auspices of the Association of Ghana Industries (AGI) which saw a consortium of banks such as Fidelity and Barclays in attendance, to educate the private sector on a suitable SME financing regime by local banks.

Instructively, what business entities need in recent business ecosystem may not necessarily be direct injection of funds, but most importantly access to expertise, effective policy guidelines and an environment that promotes the safety and growth of businesses.

Instructively, banks are best suited for working capital financing due to the short to medium term tenures required which often aligns the balance sheet structure and profile of banks.

It was however mentioned during the event by the Divisional Director, Retail Banking of Fidelity Bank, Nana Esi Idun-Arkhurst that SMEs in Ghana are yet to take full opportunities of the options that equity financing presents, stressing that this was evident in the performance of the Ghana alternative market which reflect on untapped opportunities in the stock market.

Importantly, a policy framework to safeguard the development of SMEs and harmonise the activities of all the players in sector had become much more relevant than ever due to the yet to be implemented Africa Continental Free Trade Area (AfCFTA) agreement which comes off in July 2020.

In a sequel to this, a recent survey conducted on the competitiveness of African businesses indicates that Ghanaian businesses fall below the belt of being competitive enough with multinational competitors domiciled in the other countries on the continent.

In fact, out of the top 100 competitive multinational companies rated on the African continent during the survey, no Ghanaian company made the cut, meanwhile, the country is ranked second as the largest destination for products from these African multinational companies.