Give SMEs more support

On Tuesday, President Nana Addo Dankwa Akufo-Addo launched the Small and Medium-size Enterprise (SME) Growth and Opportunity Programme.

The programme seeks to dis­burse GH¢8.2billion to Ghanaian SMEs.

Across the globe, SMEs make up the majority of businesses.

These are independent or private firms, with the small ones employing up to 50 employees, whereas the medium-sized can have a maximum of 250 employ­ees.

The SME Sector Report 2023, prepared by the Strategy and Research Department of the GCB Bank, joins micro enterpris­es to SMEs to say that in Ghana, Micro and Small and Medium Enterprises (MSMEs) are more labour-intensive than larger firms.

It can, therefore, be deduced that SMEs in Ghana are em­ploying more people to ease the unemployment burden on the government.

SMEs in the country are most­ly engaged in trading, manufac­turing and service provision.

The industry-sector report states that over 90 per cent of business enterprises in the coun­try are SMEs and that not only do they form around 80 per cent of the total employment in Gha­na but also account for some 60 per cent of the country’s Gross Domestic Product (GDP).

It appears the situation has even improved, as while launch­ing the SME Growth and Oppor­tunity Programme in Accra on Tuesday, President Akufo-Addo said SMEs constituted 92 per cent of businesses in the country and also contributed 70 per cent to the country’s GDP.

The foregoing fact illustrates, in part, the significant contribu­tion SMEs make to the growth of the country’s economy.

In view of the importance of SMEs in the country, the Gha­naian Times thinks the GH¢8.2 billion to be disbursed under SME Growth and Opportunity Programme is a prudent decision but can guess that the amount is not enough to go round all SMEs.

Thus, further disbursements is important.

There is one thing about the programme, which the Ghanaian Times thinks must be religiously adhered to.

This is the fact that the initiative of the Ministries of Finance and Trade and Industry has been designed in reference to lessons of past programmes and challenges faced by SMEs in the country.

The idea is to avoid the repe­tition of certain things that un­dermined the earlier programmes in order to achieve the expected results.

Therefore, the design pri­oritises coordination between participating institutions, namely the Ghana Enterprise Agency (GEA), the Exim Bank and De­velopment Bank, Ghana (DBG), to ensure the targeted delivery of financial and technical support across the whole spectrum of Ghana SMEs.

The government deserves commendation for considering it important to support SMEs for the unique role they play in the country.

President Akufo-Addo was right in saying that SMEs were the backbone of Ghana’s econ­omy, as they contributed greatly to job creation, innovation and economic diversification.

The President’s position agrees with the literature that many tech­nological processes and innova­tions are attributed to SMEs since large enterprises tend to focus on improving old products to pro­duce more quantities and obtain general benefits of dimensional economy.

Besides, among other things, SMEs focus on creating new products and services, and stim­ulate competition for efficiency, the design of products, and pricing.

It is said that without SMEs, large enterprises would hold a monopoly in almost all the eco­nomic activity areas.

It is clear that the support given SMEs in the country would bring in returns for economic growth.