AGI Moves To Implement SME Action Plan

About three years ago, the Association of Ghana Industries (AGI) initiated a participatory process to address the challenges stifling the growth of small and medium enterprises (SMEs) in the country. The process culminated in the formation of the SMEs Agenda which comprises the SME policy, SME charter as well as regional action plans. This project was initiated against the backdrop that SMEs constitute over 85 per cent of businesses in the country, yet have been saddled with numerous challenges that threaten their survival. Government in recent times has incorporated the policy aspect of the SME agenda into the Ghana Industrial Policy and the Private Sector Development Strategy phase II. Following the frequent high-level dialogue AGI had with government on the need to enhance the business environment for SMEs, the Western and Central Regional AGI came out with a Regional Action Plan and made recommendations for policymakers to consider. The Regional Action Plan is to help improve the business environment for SMEs, and among the recommendations were that there was no national SME policy as at 2008, in spite of the several challenges limiting development of SMEs in the country. In view of this, a survey was conducted in all 10 regions of the country and 1,000 companies surveyed throughout the country. Data on selected factors such as infrastructure, economic activities among others were collected at regional level, after which the survey results and hard data were combined to develop the SME Agenda. On the way forward, it recommended the presentation of a detailed position paper on the agenda, the formation of coalitions to advance the cause of the Regional Action Plan as well as collaboration with government/ agencies to ensure its success. Nana Owusu-Afari, the President of AGI, in an address read for him at the “Implementation of the AGI SME Regional Action Plan” for members in the Western and Central Regions, explained that the lack of policy direction for development of the SME sector prompted AGI to commission the development of the SME Agenda in 2008. He noted that SMEs employ about 60% of the overall workforce in the country, yet contribute only 6% to Gross Domestic Product (GDP). He said access to credit and cost of credit are major challenges facing industries in Ghana, according to the AGI Business Barometer Report for the 2nd quarter of this year. He said the spotlight is in the Western Region as it gains international prominence on account of its endowment with oil. “Unfortunately, the road infrastructural deficit coupled with the financial constraints put many SMEs at a disadvantage in spite of the high prospects in the oil industry,” he said. He said the emerging oil industry presents a window of opportunity for infrastructural development but there is a common perception that government cannot do it all alone. Therefore, he said, public-private partnerships are a key component of the SME Agenda and a strategic option for implementing the solutions to the socio-economic challenges and infrastructural development problems in the Western Region. “AGI has made significant input into the Oil Revenue Management Law regarding local content and capacity development in the oil and gas industry, and I encourage our SMEs to take full advantage of the oil and gas industry.” He pointed out that it is not everyone who will be able to benefit from many of the high-skilled job opportunities in the industry, but said there are numerous ancillary jobs that can be taken advantage of, and urged all to support the roll-out of the Regional Action Plan. Dr. Tony Aubynn, the Head of Corporate Affairs of Tullow Ghana, noted that the Western Region continues to suffer in the midst of plenty resources such as gold, bauxite manganese, oil among others. “We are still struggling to extricate ourselves from poverty and it behoves all to promote the Regional Action Plan for SMEs to expand and promote their businesses.” He said Tullow Ghana is committed to promoting businesses in its operational area, hence the establishment of a Local Content and Supplier Development Unit. Last year, the company spent US$194 million on local SMEs to develop and expand their businesses, and he urged local companies to position themselves to take advantage of the opportunities as well as think about the long-term in expanding and sustaining their businesses. Mr. Paul Evans Aidoo, Western Regional Minister, in an address read for him, observed that the contribution of SME’s output to the country’s GDP has remained stable over the years in spite of the numerous challenges confronting their operations. He mentioned among the challenges poor infrastructure such as “roads, rail, and irregular power supply; difficulty in accessing credit; high cost of materials which are mostly imported; unfair competition from imported goods among others. The regional minister said government is concerned about the challenges in the industry and is doing all it can to find solutions to them.