Pelpuo Tells Funding Institutions
The president, John Dramani Mahama, will next month open a two-day Small Medium Enterprise (SME) financial fair and exhibition on the 16 and 17, aimed at tackling, the financial difficulties faced by the country’s SMEs.
Minister of State at the presidency in-charge of Private Sector Development and Public Private Partnership (PPP), Alhaji Rashid Pelpou, announced this at a stakeholders’ forum held in Accra yesterday themed “SME financing in Ghana-Access and Reducing Cost”.
Making a case for the SMEs, the minister, said government was putting in place measures to enhance the growing of these businesses and encouraged the various institutions that will be attending the March fair “to come with something in hand” for the SMEs to crave for with respect to funding.
“Recognizing that the prevailing high interest rates and limited access to funding are debilitating forces against the SME sector, we are launching the SME Financing Fair in the bid to find lasting solutions to the challenges and to bring exposure to innovative financing mechanisms prevailing in the country now,” he said.
The forum, attended by various stakeholders, including the Bank of Ghana (BoG), Association of Ghana Industries (AGI), commercial banks, Ghana Insurance Companies, Youth Enterprise Support (YES), MASLOC, multinationals, financial institutions, was to discuss ways of enhancing access to funds and ways to reduce cost for the various SMEs.
According to Alhaji Pelpou, “SMEs are very important to the economy constituting over 90 percent of businesses registered in Ghana adding the “most important aspect is getting the money, accessing it and the risks involved”.
Ministry of Trade and Industry, he noted has also estimated that SMEs comprised over 160,000 registered liability companies and over 350,000 registered sole enterprises, generating over 40 per of GDP. He said a chunk of the SMEs are found within the service sector like the real estate, restaurants, transport, hotels
“From a percentage of 48.4 per cent in 2012, the figure rose to 51.9 per cent in 2014 and 54.1 per cent in 2015. Obviously this sector alone has the potential to contribute to national prosperity and is one of the key employment-generating sectors in Ghana,” he articulated.
In a short remark, the Chief of Staff, Julius Debrah, noted that “it is the private sector that makes things happen when it comes to entrepreneurship”. He said, the private sector is an area “we need to make active and vibrant” and so it was only fair to “ensure that the SMEs get the right support”.
Mr. Debrah, who directed that conclusion of the forum be sent to his office for onward implementation continued that at the end of the forum, ‘all we want to see is for the stakeholders to agree on issues because, government alone cannot do it all”
The former Local Government and Rural Development Minister who was described as “a private sector person” explained that the forum is not about politics and so stakeholders needed to feel comfortable to express views that can improve the sector going forward. He explained, ‘Financing the sector is not politics at all” adding “ideas rule the world”.
A Deputy Minister of Trade and Industry, Murtala Mohammed said, the ministry acknowledges the challenges of SMEs in accessing funds adding said his outfit and for that matter government, “was more than willing to support them in whichever way possible”.
He said the pressure on government to employ about 90 per cent of graduates from the universities was impossible explaining what government can do to support the private sector which is expected to employ a good number of these graduates, is to create the enabling environment for them to flourish. He said, “We look at alternative ways of improving their lots so they can continue to partner government to provide jobs for the unemployed youth”.
He said, the Ghana Exim Bank proposed by President Mahama, would also make room for SMEs.
According to him, creating the enabling environment means for instance, solving the energy issue which collapsed several businesses over the three years it lasted and also the ministry’s flagship policy, “Buy made in Ghana goods”, launched by the sector minister, Dr. Ekow Spio Garbrah.
The deputy minister, who decried the Ghanaian’s penchant and craze for foreign product said “it takes some time to change the taste of Ghanaians” hoping with time, the current situation will be reversed. Deputy Governor of the Bank OF Ghana (BoG), M Narh said following the difficult times the country experienced, “the economy is beginning to show stability”.
He said, the BoG was allocating funds to support SMEs in the agric sector adding the regulator is also “sanitizing the industry” and when that is completed, more would be heard from them.
A representative from the Ghana Insurers Association (GIA) Kingsley Kwesi Kwabahson, was particular about SMEs and funding agencies taking insurance issues serious so that in the event that the SMEs are unable to pay moneys loaned to them, they can conveniently fall on the insurance companies.
President of AGI, James Asare Agyei, said SMEs are always disadvantaged when it comes to borrowing because they have to compete with multinational companies and well established frims. He pleaded with government to make available funds for SMEs so they can support their members across the country. Others suggested there must be deliberate policies to encourage Ghanaians to buy made in Ghana goods.
Stakeholders also discussed issues of taxes, interest rate, capital allowances; strategies for marketing products made by these SMEs so that they can produce in large quantities and employ more people.