Empowering Ghana’s SMEs: President Akufo-Addo Highlights Successes And Challenges

Empowering Ghana's SMEs: President Akufo-Addo Highlights Successes And Challenges

Communications Bureau Latest News 16 July 2024

At the SME Growth and Opportunity Summit held at the Kempinski Hotel in Accra, President Nana Addo Dankwa Akufo-Addo addressed the gathering, celebrating the remarkable achievements of Ghanaian small and medium-sized enterprises (SMEs) while acknowledging the significant challenges they face.

The summit, themed "Breaking Barriers to SME Growth," provided a platform for discussing the vital role of SMEs in the country's economic development and exploring ways to overcome obstacles hindering their growth.

"SMEs are the backbone of Ghana's economy, contributing 70% to our GDP and constituting 92% of businesses. Their entrepreneurial spirit and resilience are driving forces behind our economic transformation," President Akufo-Addo remarked.

The President highlighted several success stories that exemplify the potential of Ghanaian SMEs. Kasapreko Company Limited, a homegrown beverage company, has grown from a small business into a multinational corporation with a strong presence across Africa. Similarly, Blue Skies Holdings Limited started with a small facility in Nsawam and has expanded its operations to multiple countries, maintaining its commitment to sourcing produce locally and creating thousands of jobs for Ghanaians.

The rise of tech hubs like the Meltwater Entrepreneurial School of Technology (MEST) has also played a crucial role in nurturing innovative solutions across various sectors. Companies like AgroCenta, a digital platform connecting smallholder farmers to larger markets, demonstrate the transformative impact of technology-driven SMEs.

Despite these successes, President Akufo-Addo acknowledged the persistent challenges that hinder SME growth:

Access to Finance: High-interest rates, stringent collateral requirements, and limited access to formal banking services pose significant barriers. According to the World Bank's "Enterprise Survey," only a small percentage of SMEs can secure bank loans or lines of credit, stifling innovation and expansion.
Inadequate Infrastructure: Unstable electricity, poor road networks, and regulatory hurdles complicate the business environment for SMEs. These issues make it difficult for businesses to comply with legal requirements and access necessary support services.

Market Access: Many SMEs lack the resources and knowledge to penetrate new markets, both domestically and globally. This situation is exacerbated by a lack of skilled labor and insufficient capacity-building programs to enhance entrepreneurial skills.

Supply Chain and Distribution Networks: The absence of a well-developed supply chain and distribution network limits the market reach of SMEs.
To address these challenges, President Akufo-Addo announced the SME Growth and Opportunity (GO) Programme. This initiative aims to provide targeted financing solutions and technical assistance to SMEs, enabling them to scale up and create a significant impact across their communities.

The programme will be coordinated by the Ministries of Finance and Trade and Industry, with the Ghana Enterprises Agency (GEA), Ghana EXIM Bank, and Development Bank Ghana (DBG) serving as the principal implementing agencies. Key components of the programme include:

Ghana Exim Bank: Supported with GHS 700 million, it will offer highly subsidized financial support and capacity building, particularly through a dedicated window for the 1-District-1-Factory initiative.

Ghana Enterprises Agency (GEA): Allocated GHS 230 million, it will provide small-scale grants and loans at subsidized rates to high-growth SMEs employing 100 or more people.
Development Bank Ghana (DBG): Utilizing GHS 1.4 billion, it will provide loans with tailored repayment conditions through financial institutions, supporting SMEs with robust growth prospects.

Additionally, the programme will establish a Food Innovation Hub on the University of Ghana campus to support food industry SMEs with modern processing equipment, warehousing, testing labs, and regulatory assistance. This hub aims to help SMEs that lack sufficient capital to access state-of-the-art processing facilities, enabling them to scale up production and meet export standards.

"By breaking the barriers that hinder SME progress, we can unleash their full potential and drive inclusive and sustainable growth. Government, private sector, and all stakeholders must work together to create an enabling environment that supports innovation, entrepreneurship, and resilience," President Akufo-Addo emphasized.

The SME GO Programme reflects the government's broader strategy to foster a competitive, innovative, and globally oriented SME sector, which is crucial for Ghana's long-term economic prosperity. The programme is a continuation of the government's commitment to economic transformation, following previous policies under the post-COVID plan for Economic Growth (PC-PEG).

President Akufo-Addo concluded his address by urging all stakeholders to support the initiative and work collectively to build a vibrant SME sector that contributes to Ghana's economic prosperity and uplifts the lives of all Ghanaians. The SME GO Programme, with its comprehensive support structure and substantial funding, is set to transform the economic landscape of Ghana, driving inclusive and sustainable growth for years to come.

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