In modern economies the private sector has assumed the leading role as a vessel of productive activities and engine of economic growth. Most governments have currently realized their inability to undertake various economic activities that would help to speed up development and promote the welfare of the citizenry.
They are, therefore, playing facilitating roles to enable the private sector to open up and expand its activities to provide diverse goods and services and also to create jobs for the people.
In Ghana, the private sector has been touted as the engine of growth of the economy. The sector is mostly made up of micro, small and medium size enterprises, popularly called the SMEs. The SMEs both in the formal and informal sectors constitute about 87 per cent of the country's total businesses and employs about 97 per cent of the total workforce.
This makes the SMEs the most important and crucial sector in the Ghanaian economy. They have over the years played leading roles in job creation and other economic activities in the country.
However, SMEs have over the years faced many challenges, which have militated against their expansion and growth. Notable among them are lack of access to credit facilities, supporting infrastructure like good roads, utilities, lack of adequate market, inadequate public sector support as well as cumbersome regulatory and licensing procedures.
These problems, coupled with inadequate managerial and entrepreneurial skills, have contributed immensely to the inability of the SMEs to grow and expand.
Over the years, however, there have been conscious attempts by successive Governments to create conducive atmosphere for the private sector, especially the SMEs to grow and expand.
This has resulted in various interventions aimed at, especially offering financial and technical support to the SMEs.
The introduction of the Rural Enterprises Project; Macro and Small Loans Scheme; Export Development and Investment Fund; Business Advisory Centres; Micro, Small and Medium Enterprises Project among other programmes are all aimed at assisting SMEs financially and technically to operate freely and to expand.
Despite all these interventions, SMEs continue to face serious challenges, which are making them unable to respond to these interventions. These challenges are mainly the cumbersome procedures and processes an entrepreneur has to go through before accessing these interventions. Most entrepreneurs find it difficult to understand and complete the numerous paperwork and processes before accessing credit facilities. The various conditions and requirements make it difficult for them to even apply for such facilities.
Again, the uncoordinated and scattered manner of these interventions, have also contributed to the inability of the SMEs to respond and access them.
It is worrying to note that, many government agencies and nongovernmental organisations (NGOs) are implementing different intervention schemes for the SMEs at different levels and under different conditions. This has resulted in a number of seminars and workshops being organised by these agencies to explain the processes to the SMEs every now and then. Most of the SMEs even get confused as to which of the interventions they could easily access.
Multiple taxations are also major setbacks in the growth and expansion efforts of SMEs. As indicated by Nana Baah Boakye, Executive Director of the National Board for Small Scale Industries (NBSSI), at a workshop for SMEs in Sunyani recently, multiple taxation retards the growth of SMEs. Most SMEs are made to pay taxes to as much as about five different government agencies and local government authorities.
Another worrying challenge is the number of regulatory and licensing authorities an entrepreneur has to contend with before obtaining permit. The cost of transportation to these various agencies, coupled with unnecessary delays and higher fees charged have conspired to make it difficult for SMEs to operate efficiently.
What needs to be done at this time of the country's development is for the Government to establish an efficient one-stop shop or agency to coordinate all the various interventions and activities concerning the SMEs in the country. The NBSSI should be equipped in terms of capacity both in human and material to provide the needed technical and financial support to the SMEs. It should be possible for SMEs to know where to go for assistance at all times.
It is time the Government made a conscious effort to engage in concrete actions to support and promote the growth and expansion of SMEs not only by rolling out new financial interventions, but also setting the appropriate structures capable enough to coordinate the activities of the sector and give it a new direction.
If possible, there should be an establishment of a Ministry of SMEs to provide clear policy guidance and direction to the sector. The country can no longer continue to pay lip service at this time of its developmental journey. Cumbersome regulatory procedures and uncoordinated interventions should be removed to enable entrepreneurs to utilize their talents and skills to support the rapid growth and development of the nation. That is what can create wealth and reduce poverty in Ghana.
A GNA feature by Kwabia Owusu-Mensah