SMEs account for 92% of all businesses and about 70% in Ghana's GDP
Director, Investor Services at the Ghana Investment Promotion Centre, Edward Ashong-Lartey, has reiterated calls for Small and Medium-sized Enterprises (SMEs), especially startups, to partner one another to better stand a chance of attracting investment.
At the Ghana Startup Network’s programme in Accra to mark the 2022 Startup Week, he said startups that are playing complementary roles, particularly in a specific sector, can partner and collaborate to fuse ideas and rely on the synergy to present a diversified front… giving them better bargaining power.
“With partnerships you fuse ideas; you can have better bargaining power to engage potential partners from outside. You can also rely on the synergies to present a diversified front that will make it easier for someone who is looking for an opportunity in the startup space.
“I am not saying that you should not go all alone, but sometimes you stand a better chance when you have a partner – especially when you are playing a complementary role in a specific sector,” he said.
Given the current economic situation and its impact on businesses, he also advised SMEs to rethink and reassess their operations and consider cutting back or outsourcing to manage the cost of production.
Mr. Ashong-Lartey further urged small and medium-sized enterprises to do well and formalise their operations.
Executive Director of Ghana Startup Network, Solomon Adjei, also holds that beyond startups, until the business space begins to collaborate and consolidate their efforts, the expected gains will not be realised.
“The theme for today is ‘collaborate, innovate and invest for greater impact’. We believe that many things have happened in the past which have not been so beneficial to the state because they were done in silos. Everybody is doing their own things in their corners, and so we are not being impactful.
“Until we begin to consolidate our efforts, we will not see gains. When you look at outside jurisdictions, teamwork and partnerships are key; but it is hardly seen in our part of the world, where everybody wants to be the boss or CEO,” he said.
SMEs’ contribution
Currently, SMEs account for 92 percent of all businesses and about 70 percent of the country’s Gross Domestic Product (GDP).
Mr. Adjei argued that employing measures to realise the contribution of SMEs to the country’s development and economy also requires that various funding institutions work hand in hand to fund startups holistically for impactful results.
He said without this, many funds that are given to startups will continue to get wasted because they are not up to the target.
“Many fundings that are given to startups get wasted because they are not up to the target. For instance, I have my business plan and I need say US$10,000 to execute the plan but I get US$2,000 from a funding institution; it means I need to raise the remaining US$8,000. And if I am unable to raise that, the US$2,000 will be used but not meet the expectation and eventually go to waste,” he said, stressing the need for institutions to collaborate, target startups with great potentials and employ holistic approaches in funding them.
