09.08.2018 Feature Article

An Entrepreneurial Economy

An Entrepreneurial Economy
09.08.2018 LISTEN

State institutions have proven to be extremely wasteful and inefficient in Ghana for many years. Resources have not been managed well by people who handle state-owned enterprises. As such, the private sector is seen as the engine of growth for this economy. Managers of state-owned enterprises have been making abysmal decisions with regard to the allocation of resources. Meanwhile, most of the resources available to the state are fixed, limited in supply and scarce in nature and so they must be utilised efficiently to produce desirable results. The key venture that can eliminate these wasteful allocations and decisions is entrepreneurship. It is about risk taking, innovation and quality management of scarce resources.

The policy makers in Ghana only create amorphous vehicles to propel the development of entrepreneurship in Ghana. Consequently, the sector has not seen any significant improvement. There are prospects in the area that can be tapped to change the economic outlook of the state. The focus has been on well-established companies without attention to micro and medium scale enterprises. Politician in Ghana of differing ideologies have tried their bit to create entrepreneurial environments for the citizens. State enterprising institutions such as MASLOC, Rural Enterprises Project, BusAc and many others have been created to spearhead the development and advancement of entrepreneurship.

There are enormous benefits that Ghana stand to get in making it an entrepreneurial hub or economy. The addition of value to commodities, creation of employment, increase in earnings, minimising waste and increasing the Gross Domestic Product of the state and many other benefits are available to be had by the state. The cost of doing business and obtaining capital for the establishment of these businesses have been warding off people. Interest rates are usually at high levels.

Entrepreneurship is also key in the industrialisation drive of the economy. Industrialising an economy and its activities needs to be done by adding value to commodities and services that are provided by people in the country. Entrepreneurs are the innovators of products and services as well as processes. This helps to create value for the commodities that are exported in their raw state or form. The use of innovative ideas in businesses and other personalised ventures will lay the foundation for the development of factories and industries. Industrialisation needs to be embarked on with the successful management of small and medium-scale enterprises managed by people in the private sector.

Many countries including India have relied on the private sector for their development. Entrepreneurship is the breeding ground for new industries and the seedbed for the growth of future larger companies. Entrepreneurship is beneficial in many facets.

There are several factors that have been limiting the growth of entrepreneurship in the country. Political interference has been a bane in the development of businesses. Political colouring favour access to credit and business support in the country. MASLOC, which was developed to provide support to business creation and development is being used by politicians to achieve their partisan goals. Its support services are skewed to party faithfuls. Many other state-established agencies to chart the development of small business creation are not efficient. To make the economy an entrepreneurial one, the activities of state agencies that are charged for the creation and development of small and medium scale enterprises need to be reviewed. Their policies need to be evaluated to achieve efficient allocation of resources.

Intellectual property protection should be determined with codes defined law. People’s ideas are almost always being pirated by foreign nationals that do not bear any cost to their development. Ideas conceived in the country are being pirated by the Chinese and other people in the advanced world. There is the need to create an ennobling protection for the creative and innovative ideas in the country. The current state of protection for intellectual property is weak and does not help people become enterprising. More state protection through legislative instruments need to be initiated.

Protectionist agenda that will spur the growth of local entrepreneurs must be developed.

Bank finance and financial advice to new and existing entrepreneurs should be made readily available through state interventions. Many Ghanaian Entrepreneurs find it difficult to access bank finance especially the women entrepreneurs. The funds available to be used by MASLOC can be a source of funding. This could be done at reduced interest rates that will make available more credit to them as they do not pay huge interest rates on the borrowed funds. Financial advice in keeping records, managing cash and inventories should be provided. Records keeping is poorly done currently. The agencies in charge of the provision of entrepreneurial support should be resourced properly to aid in the provision of financial advice. Businesses need to update their records in order to properly assess their performance.

To create an entrepreneurial economy, there is the need to help new business entrants by providing clear-cut procedures to access funding and credit, making business registration easy and protecting innovations and creativity.

Review the activities and policies of the agencies of the state that are in charge of the development and growth of small and medium scale enterprises. MASLOC, BUSAC, Rural Enterprises project etc need to have their policies reviewed with new ones made by legal frameworks.

Emmanuel Kwabena Wucharey.