Revamping entrepreneurship in Ghana: Insider perspective
Being an entrepreneur is a very challenging task the world over and it is even more challenging in Africa. J.A. Tirnrnons, a renowned American professor, defines entrepreneurship as the finding of personal energy by initiating and building an enterprise or organisation, rather than by just watching, analysing or describing one. Those who champion such a cause are termed entrepreneurs.
Entrepreneurs are people who see challenges as opportunities and take practical steps to turn these challenges into solutions and get profit or social recognition as their reward. They are the world’s pacesetters, transforming and directing society.
Ghana has many promising young entrepreneurs who have been able to surmount the hurdles in their businesses, and have been recognised and honoured by international organisations. The above mentioned can be made of magnates like Mr. Prince Kofi Amoabeng of UT Bank, Ms Esther Cobbah, CEO of Stratcom and Elikem Kuenyehia of Oxford & Beaumont.
Challenges of Entrepreneurship in Ghana
The problems besetting entrepreneurship in Ghana and most sub-Saharan states are multifaceted, though, not without hope. Despite the recognition given to entrepreneurship and small business development in Ghana and other developing countries, entrepreneurs still face myriad of challenges. For example, writing on Pushing SMEs up; the Business and Financial Times on 28th October, 2011 reported that "SMEs which form the backbone of Ghana's economy face many constraints and only a few of them are competitive in today's globalised business environment". I have categorised these challenges into human capital, financial capital, legal and regulatory framework, infrastructure, technology, marketing/customer loyalty and social/cultural attitudes.
Many entrepreneurs find it difficult getting the right human resource for their business and when they do, they do not even stay. For an entrepreneur to get and secure its fair share of the market, it may be necessary for him/her to enter into partnerships that ensure harnessing competency, capital and market for competitive advantage. The critical mechanism to solicit such partnership is efficient and effective negotiating skills, which many entrepreneurs and their business assistants lack.
Most programmes on entrepreneurship that aim at developing the youth to become entrepreneurs in Ghana often relegate the need for the development of attitudes and skills focusing rather on paper certification.
Without a developed venture capital or private equity market in Ghana, it would be difficult to source capital for your enterprise, no matter how bright the idea. Some banks have not been that helpful when it comes to supporting business start-ups. Access to finance is crucial for the growth of every business, but many small, micro and medium-sized enterprises (SMMEs) which are often anticipated to be the backbone of the private sector in the developing world. They are also deemed to create jobs and provide a tax base for the local government yet have difficulties, as the risk capital market in Ghana is underdeveloped and banks increasingly avoid unsafe lending.
According to Derry, the CEO of DreamOval, they were able to pay themselves only after running the business for about two and a half years. Now, the question is: ‘How did they manage to foot their bills all this time?’
More so, reaping the benefits of the internal and the international markets has not been easy for businesses in Ghana entrepreneur as they would have to grapple with rigid and fierce competition, a situation which has often favoured the international or foreign enterprise.
Marketing and Customer Loyalty
Closely related to the issue of financial constraints is the problem of market share. Without any track record, how is the Ghanaian entrepreneur going to get people to give their important jobs to his/her company? Unfortunately, many businesses in Ghana, may best be described as ‘start-ups’ who do not have any track records, though they may have the ideas and the zeal. Akin to this, is the African’s strong crave for anything foreign. Many people and organisations as well as even governments in Africa, usually prefer goods and services rendered by foreign firms to those offered by local ones. This colonial antecedent adversely affects entrepreneurship Ghanaian.
The Ghana Investment Promotion Centre (GIPC) as well as the Ghana Chamber of Commerce and Industry (GCCI) seeks to induce concrete foreign direct investment and promote direct partnership between local and foreign investors to enable the local investors to compete favourably on the international market which I believe entrepreneurs in Ghana can tap into.
Legal and Regulatory Framework
Government’s policies have often not been encouraging. Public sector bureaucracy with licensing of new companies and also with delay in payments for jobs already executed by entrepreneurs and their outfits and further with clearing of imports at Customs Department, provokes untold corruption and discourages and saps the creative energies and initiatives of the Ghanaian entrepreneur. Many agencies of government are also highly suspicious of emerging entrepreneurs and their small and medium-scale industries denying them contract and services. The complexity of tax systems is in itself a disincentive to entrepreneurs.
It has often been suggested that ‘No business thrives in a vacuum.’ If this school of thought is anything to go by, then indeed, a congenial business environment where basic facilities are readily available will to a large extent augment the effort of the Ghanaian entrepreneur in creating jobs for the Ghanaian populace. However, starting and maintaining a business in Ghana have often suffered from simple but crucial factors, such as lack of roads, facilities, sustainable power supply (or electricity) or effective Internet and telecommunication systems.
Information and Communications Technology is increasingly becoming a cardinal concern when supporting private enterprises which need a good business plan and seed funding. The technology gap in developing countries including Ghana, has always posed serious setbacks to entrepreneurship in Ghana. Technological know-how and informative knowledge of the market are critical as access to capital. Many Ghanaian entrepreneurs lack such skills; those who have also face the problem of poor and limited Internet services. Transacting business beyond the corridors of Accra and perhaps, Takoradi and Kumasi, has often suffered technological deficit.
The concept of entrepreneurship itself is not native to every culture or society. Therefore, the fear of failure can be a barrier in itself. Ghana’s social systems have the tendency of creating sense of dependency and desperation. The overarching mind-set that entrepreneurship is an art rather than science is a big problem confronting many entrepreneurs. While it is true that some individuals are gifted with creativity to develop new ways of doing things, creativity alone is not sufficient.
It is intriguing to note that the Global Entrepreneurship Monitor 2013 Report reveals that Ghana’s “Fear of Failure” for new enterprises stand at 24.6% as against 2010’s 10.4%.
Measures of amelioration
Although capital, networking organizations, and innovative business approaches such as incubators are lacking, there are signs of optimism about operating businesses in the country.
The human resource challenge could be overcome if business owners spend a bit more time identifying and recruiting the right calibre of staff for their enterprise and by focusing both on competency and values. The services of outsourcing agencies can be employed; where expensive, the Internet is a better alternative. Jobberman.com and LinkedIn are a few of the online based recruiting agencies. Internships can also be considered as a means of recruiting competent graduates to champion the cause of the company.
The Ghana Chamber of Commerce and Industry in partnership with the University of Ghana Business School is running an internship programme dubbed Practical Knowledge Transfer Programme (PKTP) which both entrepreneurs and students can sign on to. The programme allows students to do internship with selected companies in Ghana. This affords students the opportunity to have hands-on experience in the field of work.
The government has also made available some funds through Exim-guaranty Company Limited and Venture Capital Fund which entrepreneurs can take advantage of to enhance their businesses. Entrepreneurs are also encouraged to accept credible outside investors. Facilities from the Ghana Private Sector Development Fund (GPSDP) can also be accessed.
Young entrepreneurs can apply for loans from institutions or funding organisations that fund young people and/or start-ups. Examples of such institutions are Busy Internet & the BusyIncubator Program, EMPRETEC Foundation, Good Morning Africa (GMA), IntEnt & the Ghana IntEnt Business Club, National Board of Small Scale Industries and the West African Trading Hub. The Ghana Center for Entrepreneurship, Employment and Innovation is a business advisory support center that helps startups, young entrepreneurs in business development, consulting, business financing and support services. It is an initiative which offers many free services including free exhibitions for the Ghanaian entrepreneur.
If you can buy a domain name and register your business online, you are in business. Entrepreneurs in Ghana should not wait for a well-furnished office with the most modern technology to put their business on the technological platform.
Via the Internet, entrepreneurs can easily get their goods and services across to virtually the whole of Ghana. Making use of social media platforms like Facebook, Twitter and YouTube, you will not be a ‘cottage’ entrepreneur but one known by all and sundry. You can also make use of online market places like Tonaton.com, Ghana tradelinks.com, Ghana market online.com and OLX to get your goods and services across at less cost.
Understanding business policies and regulations have always been a difficult assignment. One organisation that can be of immense help to the Ghanaian entrepreneur is Doing Business Project. The Doing Business Project looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.
The Ghana Chamber Commerce Industry (GCCI) is a formidable association that assists the Ghanaian entrepreneur to not only enhance his/her business in terms of providing excellent goods and services but also to understand government policies and regulations regarding business operations within and without Ghana. The association also engages in business/market research whose findings are likely to influence policies and help boost business. Facilities from the Ghana Private Sector Development Fund (GPSDP), National Board of Small Scale Industries and Busy Internet & the BusyIncubator Program can also be accessed.
Enterprise development and entrepreneurship have been at the core of Ghana Chamber of Commerce and Industry’s mission and operating strategy since its inception. Opportunities available to and challenges confronting members and the nation as a whole in this technology and industry driven world and how to provide hands-on panaceas to such challenges are the crux of what GCCI stands for.
It is clear here that it takes collective efforts to remedy the perennial quagmires bedevilling entrepreneurship in the country. Government and non-governmental organisations as well as the entrepreneurs themselves need to put hands on deck to ensure the flourishing and sustainability of entrepreneurship in the country.
In revitalising entrepreneurship in Ghana, it is prudent for business owners to learn to delegate basic duties, network, set up business plans, and seek assistance from appropriate quarters like the Ghana Chamber of Commerce and Industry.
The attorney general and minister of justice can set up a special team of corporate lawyers who could offer pro bono services for ‘start-ups. Parallel to this, the ministry of finance and economic planning can also set up a more vibrant capital venture to assist both ‘start-ups’ and giant firms which may need help.
The Writer is a Communicator and Researcher
A graduate intern at Ghana Chamber of Commerce and Industry (email@example.com)
(This article dwells principally on a speech delivered by the President of the GCCI at the Ghana Entrepreneurship Forum, 5th June, 2014).