Government through the Ministry of Business Development has earmarked a Gh¢50 million facility to carry out two months of intensive capacity training for 12,000 start ups and early stage indigenous business entities starting next week.
The move falls in line with government’s policy direction which aims at preparing start-ups most especially Small and Medium-sized Enterprises (SMEs) to take advantage of business opportunities arising out of the implementation of the Africa Continental Free Trade Area (AfCFTA) agreement.
This follows recent discussions between government and business groups including the Association of Ghana Industries (AGI), the Ghana National Chamber of Commerce and Industry (GNCCI), the Ghana Union of Traders Associations (GUTA) – representing manufacturers and traders respectively – among other professional groups on the need to harness the competitiveness of the private sector in order to exploit the opportunities emerging from the commencement of the pan African free market.
Importantly government is supporting such local startups with business loan capital at low interest rates to ensure that they have competitive financing costs. Ghana’s commercial lending rates are significantly higher than the continental average, a situation which inhibits the cost competitiveness of local industry.
Local businesses fret that multinationals also have distinct advantages over them with regards to both procurement and production costs because of economies of scale.
Some financial proponents and economic analysts have already cautioned of the possibility of economies of scale making it difficult for a number of SMEs in Ghana to compete with multinational enterprises operating across the continent, in terms of production and procurement costs and consequent pricing of the goods they will soon be able to offer all around Africa, import duty free.
Speaking at the launch of the China Trade Week on Wednesday in Accra, Minister for Business Development, Dr. Mohammed Awal said the capacity building mechanism for start ups is important in the sense that government sees it as one effective way to position them to exploit the opportunities ahead.
“The only way to tap into the opportunities is to train and build capacity of start-ups”, he stressed.
Africa has a market size in the region of US$3 trillion with a population of over 1.2 billion.
By Dundas Whigham