Entrepreneurs Are The Creative Force In The Economy Is The Government Helping Or Hindering Them?

This essay was among the first 25 essays of the RISING TIDE FOUNDATION for the Africa undergraduate essay competition, 2016. It was organized by the NETWORK FOR FREE SOCIETY, RISING TIDE FOUNDATION AND ALOD POLICY. It was the only essay selected from Ghana out of over 600 applicants across Africa

SULEMANA HALEED NAMYELLA is a student of University for Development Studies (UDS) and studying Bsc. In development planning in the northern part of Ghana. INSTITUTE FOR LIBERTY AND POLICY INNOVATION (ILAPI-GHANA) as part of the Think Tanks that promulgated the essay in Ghana invited Sulemana to congratulate him for his outstanding performance. The president of the institute Mr. Peter Bismark Kwofie assured him to support any innovative entrepreneurial ambition in solving societal issues. “Government should create the enabling environment for businesses to grow with zero tax on raw materials” He said. “Credit facilities ought to be easily accessible by all. High interest rates on loans, and tax hikes on raw materials are of greater disadvantage on start-ups. Ambitious entrepreneurs cannot secure loans due to high demands for guarantors and collaterals. The central bank has made is as such that private and rural banks all have high interest rates, militating the desire for one in getting capital to starting a venture”.

Over the years, it has been increasingly difficult to rely on the government for employment amidst the high growth of the population, increase in the use of modern technology and other socio-economy factors which puts a strain on public sector employment. The unemployed are thus left with little or no choice but to start-up businesses of their own [Entrepreneurships] and this has proved beneficial not only to the individual but to the country at large.

In past years and recent times, entrepreneurship has proven to be the creative force of every economy by way of,

1. Providing employment to the unemployed
2. Reducing the dependency burden
3. Improving the socio-economic condition of the people
4. Improving the living standard of the people
5. Increasing infrastructure
6. Providing new markets for local and international goods
7. Providing services
8. Reducing poverty
9. Promoting balanced regional development and facilitating overall development
10. Increasing economic growth and the GDP of the country.

To begin with Electricity, over the past few years, Ghana has been faced with severe power cries under the current government, this resulted in prolonged power rationing where citizens had to cope and deal with long hours of power outage. This unfortunate incidence in Ghana dealt a major blow to the economy at large as several businesses were forced to slow down their production process at a higher cost of production whilst other businesses were forced to shut down. This discouraged entrepreneurs from starting or continuing their business activities.

Workers were laid off and salaries reduced, this increased the financial burden of citizens in the economy. Because of the high cost of production, entrepreneurs reaped little or no profits, and the little profit gained could be reinvested into the business. This acted as a no go area to the entrepreneurs who wanted to start businesses of their own. Nonetheless over the past few months, it has been a relief to notice that there has been a stop to the power crises. The president indicated in the state of the nation’s address that 800MV of power has been added to our national power grid, among other ongoing and almost completed projects hoping to add to the power supply

In addition, roads are very important as it is the most common and convenient mode of transporting not only goods but people as well, from one location to the other. Unfortunately the condition of most road networks in Ghana over the past years has been in very deplorable conditions especially in the upper east, upper west, northern and western parts of the country. Vehicles plying such roads spend enormous amount of working time on the roads because of the worn-out nature of the roads. It is sad to mention that, because of the bad nature of the roads, most roads are left unusable during certain periods of the seasons (mostly the raining season). Famers who are required to transport their goods to the market are left with no option than to watch their farm produce perish, the lucky ones are forced to sell their product at a very low prices as a way of offsetting part of the cost in production. Other entrepreneurs engage in various businesses which necessitate them travelling or transporting goods to different locations are focused to bring their businesses to a halt. This slows down businesses and invariably increases the cost of production. These are some of the challenges entrepreneurs have to face in areas of poor road networkers.

In tackling this undesirable conditions, the government has made significant improvement by adding 3772 kilometers to Ghana’s motorable network (as stated in the state of the nation’s address) The Cocoa Roads Improvement Program, an initiative by the government is aimed at constructing new roads and maintaining roads that are in bad conditions especially in cocoa producing communities and markets. It has helped provide additional resources to the road improvement program being rolled out in a country. In the state of nation’s address, the president identified major road construction programs implemented by the government in all ten (10) regions of Ghana. A few of these projects are,

• Kwame Nkrumah interchange
• Burma Camp Road
• Spintex Road by-pass
• 10km of roads in the bolgatanga municipality
• Navrongo and Bawku town

An entrepreneur is one who organizes, manages and assume the risk of a business or an enterprise’’. Entrepreneurship can be understood as the activity or process of organizing, managing and assuming the risk of a business or enterprise.

The government of this country (Ghana) has not established any policy or programmed primarily targeted towards aiding entrepreneurship in the country. Notwithstanding , it has made effort towards providing a conducive micro and macro socio-economic environment for a businesses to thrive, as well as providing the necessary infrastructure to support and sustain economic and entrepreneurial activities in the country.

The government as a stake holder has a major but limited role to play in aiding or hindering the activities of entrepreneurs in the country. It is important to look at the efforts the government has played in the past and in current times in this regard. And these are as follows,

An important factor or condition that encourages entrepreneurship which is normally overlooked and taken for granted is peace and security. Peace and security provides a safe and convenient environment for for entrepreneurial businesses to thrive. Entrepreneurs are able to start, manage and operate businesses at ease and without fears of losing the business. This also greatly reduces the risks entrepreneurs would face in starting up new business.

Ghana as a country can pride itself for being able to sustain and maintain peace in the nation. The incumbent government was sworn into office at a period where Ghana was at peace it has done a good job still maintaining the peace. In its efforts to keep or maintain the peace and security enjoyed in the country, the government has provided security agencies with resources and logistics to enable them do their work efficiently.

Also the governments in its effort to provide favorable micro and macro-economic environment for business has done a poor job. There has been a constant rise in fuel and utility prices and this has resulted in an increase in cost of production, further resulting in an increase in the price of goods and services in the country. The currency is also constantly losing it value resulting in higher exchange rates. This has worsenedthe socio-economic conditions of people making it difficult even for entrepreneurs to startup businesses.

With infrastructure provision, the current government of the country has made noteworthy efforts and investments in the provision of both social and economic infrastructure projects and services in the country over the past few years, although the country still suffers a significant infrastructure financing deficits of about USS 1,5 billion per year as estimated by the WorldBank. Ghana’s efforts in infrastructure are outlined as follow,

• Nyankpala- Tolon
• Tamale-Salaga-Makango

With Water provision, in previous years it was estimated that only 52% (14million) of Ghana’s population has access to adequate water supply, depriving 48% (13million) of the population of adequate water supply especially in remote parts of the country. Entrepreneurs engaged in farming rely heavily on the provision of water mainly during periods of no or little rainfall for irrigation. Entrepreneurs also engaged in the production of sachet water and soft drinks also rely on water supply as major input in their production process. Food vendors also require adequate water supply in the preparation of foods for sale. Since the year 2012, the government has added a total of 77.5 million gallons of water per day to the national production stock due to the commercialization and operation of such water projects as

• Accra-Tema metropolitan water supply project
• Teshie Nungua water desalination project
• Kpong water expansion phase 1
• Nsawam
• Mampong

These listed projects are estimated to benefit approximately 4 million people that previously lacked adequate water supply (according to the state of the nation’s address). The likely benefit of the water projects to businesses are that, it will boost entrepreneurial activities that depend on the provision of water and also reduce the extra cost incurred by the lack of water supply but see this as a fallacy.

From the above, it is safe to say there has been quite substantial efforts made by the government in helping entrepreneurs by way of providing the required infrastructure and providing the right socio economic conditions for businesses to thrive. Although its efforts are recognized, the government still has a long way to go in helping entrepreneurs.

Sulemana Haleed Namyella.
Bsc. Development Planning.
UNIVERSITY FOR DEVELOPMENT STUDIES (UDS)
INSTITUTE FOR LIBERTY AND POLICY INNOVATION (ILAPI-GHANA)

TEMA.