A new policy framework to enhance the competitiveness of Micro, Small & Medium-sized Enterprises (MSMEs) in the private sector has been approved and is ready for launch by the Ministry of Trade and Industry (MoTI), Business Development Ministry and key partners.
This is part of efforts aimed at enhancing entrepreneurship as well as increasing trade and investment in the country which is part of the Business Regulatory Reforms programmes started in 2017.
Intense negotiations between the two ministries and business groups representing the private sector notably Ghana National Chamber of Commerce & Industry (GNCCI) and Association of Ghana Industries (AGI) reached an advanced staged last year geared towards implementing a National Policy framework to guide the operations of MSMEs.
When fully implemented, the policy framework is expected to drive key specific interventions such as a credit rating system as well as effective measures to de-risk the business ecosystem which will in turn protect the development of SMEs.
The new policy framework falls in line with a segment of government’s ten point agenda for industrial transformation which lists development of SMEs as one of its core objectives.
Importantly, this policy framework to support the development of the private sector operators and harmonise their business activities has become much more relevant due to the commencement of the impending pan African single market – the Africa Continental Free Trade Area (AfCFTA) – which is set to become operational in July this year.
A recent survey conducted on the competitiveness of African businesses indicates that Ghanaian businesses are not competitive enough compared against multinational competitors domiciled in the other countries on the continent.
In fact, out of the 100 most competitive multinational companies rated on the African continent by the survey, no Ghanaian company made the cut, although the country is ranked the second biggest destination for products from these African multinational companies.
Ghana’s retail commerce sector is currently valued at US$24.4 billion and it is projected to hit US$33.16 billion by 2024, according to the recent Global Retail Development Index. In Africa, Ghana is ranked 1st and has been described as Africa’s new “bright spot” driven by increased foreign & public investment as well as urbanization of the population.
Due to this and the operationalization of AfCFTA, stakeholders see an urgent need to implement a formal policy framework that will guide activities in the sector.
In Ghana, it is estimated that SMEs contribute more than 70 percent of the country’s Gross Domestic Product (GDP) and account for 92 out of every 100 businesses. Globally, the contribution of such enterprises to the growth of national economies is considered as significant.