SMEs need policy support to compete in AfCFTA – report

Ghana News Agency (Accra) – A research report has recommended policy support for small and medium-sized enterprises (SMEs) to be competitive in participating in the African Continental Free Trade Area (AfCFTA).

The report said the support should focus on cheaper and more innovative trade finance products, trade policy, trade infrastructure, improved capacity, trade information and facilitation, market access for growth and expansion of SMEs in the country.

Ghana was selected as the country to host the secretariat of the AfCFTA, which starts in 2021.

The AfCFTA provides the opportunity for Africa to create the world’s largest free trade area, with the potential to unite 1.3 billion people in a US$2.5 trillion economic bloc, ushering in a new era of development.

Samuel Frimpong Boateng, the lead consultant for the research, made these recommendations at a stakeholder workshop on the report, titled Mobilising Diagnostics Data to Inform Bottom-Up Decisions on Government Policies.

Research for the report was carried out by the Ghana National Chamber of Commerce and Industry (GNCCI) with support from the BUSAC Fund.

The criteria for the methodology included a minimum of three years reporting of financials, evidence of business operations, business nationality, satisfactory information for valuation and industry type.

The report recommended that SMEs should be furnished with a more proactive policy environment and be encouraged to reinvest with cheaper capital for faster growth and expansion.

Need for innovation

This, the report said, requires that enterprises create more value by adopting more innovative ways to seal off operational leakages, manage and mitigate risk exposures to balance sheet leverage, industry and product cycles, as well as weaknesses in business models.

The report recommended that governments work together with local and international partners to ensure that the growth potential of SMEs is nurtured and transitions into value-driven partnerships that ensure sustainability.

On the findings, Boateng said the overall analysis suggests that the business growth of enterprises is less stable and more sensitive to economic cycles.

It also revealed that most of the growth-resilient industries were in the manufacturing sector, followed by professional services and education.

A speech read on behalf of Robert Ahomka-Lindsey, the deputy minister of trade and industry, praised the strategic direction pursued by the GNCCI in business data analytics, to provide targeted business-support services to its members by addressing the “lack of data” issue faced by Ghana.

The deputy minister said the economy cannot thrive without a healthy and resilient private sector, and stressed that when the private sector flourishes, it boosts job creation and generates wealth that can be spent and reinvested locally.

New growth path

“As a government that cares about the socio-economic well-being of its citizens, we are actively engaged in supporting the private sector through creating an enabling environment for trade and investment,” Ahomka-Lindsey said.

He said the Ministry of Trade and Industry ad aggressively pursued programmes and policies to improve the competitive edge of local industries, which has yielded positive results and positive investor responses.

Some of the programmes and policies, the deputy minister said, include the industrial revitalisation programme One District, One Factory, as well as the development of strategic anchor industries towards creating new growth paths.

Clement Osei Amoako, the president of the GNCCI, said that an evidence-based advocacy approach would equip the Chamber with business and industry insights to shape the government’s policies and programmes, as well as multilateral support that will ensure a conducive business climate.

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