No hope for us in the economy – SMEs
Small and Medium Scale Enterprises (SMEs) have lamented about the economy’s state, saying it economy has done little to offer them hope for the coming year.
Commenting on prospects for the economy in the year 2016, some SMEs revealed to the B&FT that they anticipate the worst for the coming year considering the fact there was nothing in the 2016 budget statement to offer them the basis for a bright future.
One of them, Baba Yabdow, CEO of Yabco Focus Company Ltd -- a fruit-juice making company in Navrongo, Upper East Region -- said he did not take any interest in the budget because politicians always fail to honour their promises.
“Politicians say one thing and do another thing. They always promise but fail to deliver on their promises. Their promises no longer offer hope. I did not personally take any interest in the 2016 budget because each year the budget fails to deliver the promises contained in it. What they say in the budget does not even reflect the reality on the ground.
“For example, if you look at the inflation figures that comes out, we buy things at a higher inflation rate more than the figures that come out. So sometimes I wonder how and where they get their figures from,” he said.
Throughout the year, SMEs have gone through some serious challenges that in some extreme cases have culminated in the collapse of their business -- with those surviving the economic turmoil having had to cut down significantly on production and staff. Notable among such challenges are included: the erratic power supply, high interest rates, exchange rate volatility, and high inflation rate.
These challenges, Mr. Yabdow believes, should have been addressed before end of the year in order to create an enabling environment for SMEs to thrive in the coming year.
“We were also expecting that by now the energy situation would have been addressed, but it has rather worsened. Just look at the power challenges now, it has become worse. For the past two weeks, every blessed day I spend money on fuel to power my generators otherwise I can’t produce.
“The exchange rate of the cedi to the dollar is almost GH?4. We were hoping that from the beginning of the year to date this situation would be controlled, but nothing has happened. I was also thinking that the interest rate would have gone down, but Bank of Ghana keeps increasing it; all these situations do not offer us any hope for the future,” he said.
His view is supported by Priscilla Brookman-Amissah Imprain, CEO, Abovo confectionery Ltd. -- a chocolate-making firm in Accra -- who said she expected that government in the 2016 budget would create a special fund and support SMEs to access it directly in order to escape the high interest rates which are crowding out businesses, but nothing of that sort happened.
“As for the 2016 budget, it does not have anything in it that seems to support us. There are no funds allocated to SMEs for us to tap into and grow our business. We were hoping that the budget would address some of the major challenges facing us -- such as the power challenge, inflation rate, and the exchange rate -- but these problems still confront us.
“So for me, I have stopped listening to the budget statements when they are read in parliament, because I don’t see how it is going to help me,” she said.
Support for SMEs from government has gained wide recognition, as many players in the economy have urged government to pay attention to a sector that is touted as the engine of growth for every economy.