Accra, May 23, GNA - Professor Stephen Adei, Rector of the Ghana Institute of Management and Public Administration (GIMPA), on Tuesday stressed the importance of Small and Medium Enterprises (SMEs) in the country's future and said they should be given the necessary attention in policy; and financial and general business support.
He said SMEs dominated the economy in terms of their contribution to Gross Domestic Products (GDP); employment; training of the youth and creating sustainable livelihoods for the majority of the population; hence supporting them was vital for economic growth.
He noted that the recent improvement in the macro-economic environment had created conditions to promote the growth of Small and Medium Enterprises (SMEs) and to attract new entrants. Prof. Adei was speaking at GIMPA at the first training and networking event of Ghana's National Business Plan Competition and Entrepreneurship being organized by TechnoServe, a US business development concern, and the Google Foundation for 300 prospective business-minded participants.
TechnoServe in collaboration with the Google Foundation is promoting entrepreneurship and private sector development in Ghana through a Business Plan Competition and Entrepreneurship Development Programme called "Believe Begin Become".
The competition aims to turn great ideas into thriving and sustainable businesses. It is a model for effective high-return method for identifying, mentoring and improving the environment for entrepreneurs, who would grow new businesses and create jobs, revenue and wealth.
Prof. Adei said SMEs accounted for about 60 per cent of GDP, with three-quarters of the population deriving their livelihood from the sector but the available statistics on SMEs in Ghana were woefully inadequate, sketchy and not current in many instances. He said the picture that emerged was overwhelming in support of the fact that the Ghanaian economy was predominantly made up of SMEs. However, national policies did not often reflect the predominance of the informal, micro, small and medium enterprises in the country, he said.
Prof. Adei said when economies were vibrant and growing, both large-scale enterprises and SMEs flourished but that it would be wrong to presume that they had an ideal climate to flourish in the country. He said the cost of official capital was still too high for the micro and small-scale operator, with most of them not having access to capital in the formal sector. They, therefore, had to resort to informal sources, sometimes paying up to 100 per cent interest rates per annum, Prof. Adei said.
He noted that the cost of doing business in Ghana in the face of unreliable and sometimes unavailable utilities; bad roads; especially at places many SMEs were located and high level of bureaucratic corruption, put SME operators in a disadvantaged position.
Compounding the situation, SMEs face competition on the local market from cheap imports from China and the Far East. Prof. Adei said with the prevailing situation, it would be wrong to presume that the general improvements in the macro-economic climate would be sufficient to nurture SMEs.
He said what they required was a combination of micro and macro policies directed at various sectors and specific policies aimed at catalysing the small-scale operator.
Listing some of the policy interventions to aid the growth of SMEs, he said at the macro-level, there should be a clearly articulated national development vision that emphasized wealth creation as opposed to poverty reduction and the continued application of prudent economic policies to bring down inflation and to achieve single digit interest rate.
Other interventions at this level should include the accelerated economic growth from eight per cent to 10 per cent per annum; marked improvement in infrastructure; improved and effective legal and regulatory environment; favourable land title regime; reduction in bureaucratic corruption and improvement on general and technical education to enhance the quality of human resources.
On the private sector operator level, he said there was the need to facilitate access to markets and the provision of market information; development of business support services from company registration to clearance at the ports; enhanced access to cheap credit and improved public-private sector dialogue and partnership.
At the SME level, he said, there was the need to access capital through coordinated, enlarged and concessionary finance; creation of industrial areas with services for SMEs; enlargement of entrepreneurial and managerial training for SME owners and business development services essential for their growth.
He said there were encouraging signs that at long last Ghana was focusing on SMEs, citing the President's Special Initiatives as being SME oriented.
"The prognosis, therefore, seems better today than ever in the history of Ghana with Government's declared policy of making the private sector the engine of growth. Policy now finally recognizes SMEs' contribution to employment, stable society, wealth creation and poverty reduction.
"I think that, as a nation, we are at the threshold of an economic take-off and those, who will take the bold step to start or sustain an SME, would be doing the right thing," he said.
Prof. Adei told the participants to see the programme as an opportunity to begin with a view to becoming a major player in business. However, he said, this would happen, if they adopted the right attitude; built their capacity to identify business opportunity; understood the business environment; kept their financial record straight; networked with providers of business support services and believed in themselves, Ghana and in God.
The 300 participants at the seminar were selected from numerous entries in the competition. Out of the lot, 10 finalists with the best business plans would be awarded a 15,000dollar seed capital to start their business.
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