A large number of Ghanaian Small and Medium Scale Enterprises have no domestic quality certification for export and no internationally-recognised quality certification, a research conducted by CUTS International has revealed.
This simply means that most of them are unable to compete in the African or international market.
The findings also revealed that most of the SMEs also have excess capacities and lack a functioning management structure, and this notwithstanding, most of these firms have not made sufficient investments in the production, finishing and packaging of their products to meet international standards.
“Ghanaian SMEs are uncompetitive and hence, a lot of work and efforts are needed by these firms, policy makers and government to boost their competitive capabilities. Most of these firms also lack connectivity to their clients and suppliers with few using emails and website”, the report disclosed.
The survey was on the theme “Improving the Framework Conditions to Unlock the Potentials of AFCFTA for SMEs in Ghana.
The findings also further revealed that there is a general low capacity at the immediate business environment level to compete, connect and change.
This is evidenced in the general difficulties in accessing trade information and trade-related infrastructure such as good roads and ICT for the purpose of work.
Subsequently, there are also delays in clearing goods from customs besides poor dealings with governmental bodies and policymakers on documentation, registration, licensing and regulatory issues.
Also, there is a moderate extent of cluster development within the SME business environment and low usage of modern marketing tools by the industry players and an average level of collaboration between industry players or businesses and universities on research and development related issues.
The findings further mentioned that the Ghanaian national environment or macro economy is also not conducive for the survival of most SMEs and this makes firms unable to compete favourably. This is due to unreliable electricity supply, high rate of exchange rate depreciation and inflation, which are major hindrances to business operations.
There are also general difficulties in dealing with government bodies and agencies in relation to documentation, registration, licensing and regulatory issues. This is beside the poor ICT infrastructure network.
Lack of accessibility to credit facilities in Ghana due to high interest rate from financial institutions is also a major problem.
The risk assessment profile of Ghanaian SMEs showed that there is a high level of risk among the SMEs. These include economic risk, financial risk, operational risk and market risk.
The research strategy adopted for this study was a combination of both qualitative and quantitative methods and relying on both secondary (desk review) and primary (in-depth interviews) data. It was therefore built on three phases namely desk review, interviews using a questionnaire with quantitative metrics, and focus group discussions.
Face-to-face interviews were also conducted with a structured questionnaire together with Focus Groups Discussions (FGDs). Survey was conducted from September to October 2021 and was based on a sample of 1028 firms selected randomly from three highly dominated private sector regions of the country including Greater Accra, Ashanti and Western regions.
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