Ghana: AGI calls for intensive SME support policies

By InstinctBusiness Oct 3, 2023 0

Stakeholders in the industry are advocating for the implementation of forward-thinking policies aimed at ensuring Small and Medium Enterprises (SMEs) have reliable access to trade finance.

They argue that these measures will not only enhance the production capabilities of SMEs but also help alleviate the increasing import costs that are placing a burden on African economies.

In an effort to foster economic growth and development, SMEs play a pivotal role in many African countries.

However, they often grapple with limited access to financial resources, hindering their potential for expansion and productivity.

Acknowledging the vital role played by SMEs in advancing economic growth, the Association of Ghana Industries (AGI) and other industry stakeholders are advocating for the adoption of innovative policies.

The Greater Accra Regional Chairman of the Association of Ghana Industries, Tsonam Akpeloo, emphasizes that these policies should primarily target the financing obstacles encountered by SMEs. Such challenges often involve difficulties in obtaining loans and credit lines from conventional financial institutions.

He said it is “difficult for the banks to lend to SMEs which he said is understandable due to the risk associated” yet he noted that “there is the need to design a working policy to grow SMEs”.

Mr. Akpeloo noted that “a startup will be lucky to access a loan at 20% interest per annum when the cost of credit is way less in other African jurisdictions like Ethiopia, South Africa, and others”.

The AGI further stressed the importance of aiding local businesses in absorbing the considerable number of graduates emerging from Ghanaian universities each year. The potential implementation of these SME-supportive policies could extend its positive effects by contributing to a reduction in the escalating import expenses borne by the Ghanaian economy.

As SMEs enhance their productivity and competitiveness, they have the potential to promote import substitution, reducing the reliance on foreign products and preserving valuable foreign exchange reserves.