The Minister of Finance and Economic Planning, Mr Yaw Osafo-Maafo, has stated that economic growth beyond five-and-a-half per cent will continue to elude the country unless resources are found to promote the growth of small-and medium-scale enterprises (SMEs).
According to the minister, the latest survey by the Statistical Service Department has revealed that SMEs account for 92.5 per cent of the industrial sector and employ 20 or more persons.He said if that large portion of the industrial sector did not grow and perform better, the economy would continue to be stagnant around the growth rate of 5.3 per cent of Gross Domestic Product (GDP).
Mr Osafo-Maafo said this during a discussion with the World Bank President, Mr James Wolfenson, and his team from the bank on how the country can persistently achieve accelerated growth of six per cent and beyond. At the meeting were representatives from the private sector, including the Association of Ghana Industries, the Private Enterprises Foundation, the banks, Ministers of State, and civil society.
He said although SMEs formed the bigger chunk of the industrial sector, they lacked adequate and easy access to credit, saying that the problem must be tackled so as to engineer the sector to perform.“There is no way we can talk about meaningful growth unless we tackle the problem with the SMEs,” the minister stated, adding that with that new revelation about the size of the SME population in the country, there was the need for identifying the areas of priority for solution.
Mr Osafo-Maafo noted that the country had, for the first time, achieved growth in GDP for four consistent years, stressing that that credit should be used to the advantage of the country by improving on it.
He said macroeconomic stability was necessary but not sufficient for growth, hence the need to diversify the economy to reduce its vulnerability to external shocks, adding that the various PSIs were aimed towards achieving that end.
Mr Wolfenson pledged the bank's commitment to partner the government to achieve growth beyond six per cent, but called for increased private sector-led investment to attain that feat.He advised the government to form a strong partnership with the private sector through dialogue and consensus to bring about the needed growth.
Mr Wolfenson also encouraged the government to be intolerant of corruption and other negative tendencies that could derail the economic gains of the country. Addressing concerns by some discussants that the bank did not promote the use of local means for procurement, which is always done through foreign companies with the backing of the bank, the World Bank President said domestic procurement procedures and channels could be used but the bank only requires that it is put to proper tender to instil competence and avoid conflict of interest.
Contributing to the discussion, the Chairman of Unilever, Mr Ishmael Yamson, pointed out that the problem of the private sector was not only finance but also management, personnel and competitiveness.
He urged Ghanaian enterprises to aim at growing beyond the domestic market and appealed to the World Bank to help in removing international non-tariff barriers that has created an uneven trading partnership, with developed countries having advantage over developing countries.
Other contributors to the discussion included Mr Herman Hesse, a software manufacturer, Ms Taaka Awori of ActionAid Ghana, Mr Moses Asaga, a ranking Member of Parliament on Finance, and Mrs Elizabeth Joyce Villars, President of the Private Enterprises Foundation.