Micro, Small and Medium Enterprises (MSMEs) have been urged to reposition to lead the post-COVID economic recovery.
Mrs Elsie Addo Awadzi, the Second Deputy Governor of the Bank of Ghana, who made the call, said the current pandemic provided a lot of opportunities for MSMEs to reengineer themselves and to participate more fully in the national, regional, and global economy.
“It is time for the enterprises to rethink their business models, be more innovative to embrace technology to help improve quality and efficiency,” she said at a virtual forum to mark the UN Day of MSMEs.
The enterprises must also adapt their management practices and diversify the range of products and services for the local market, as well as expand into the ECOWAS sub-region and beyond.
“It is also important for MSMEs to prioritise compliance with laws, standards, and ethical business principles to help build strong foundations for robust growth and lasting impact,” she said.
Mrs Awadzi said the country needed a strong and viable MSMEs sector, which must continue to soldier on, leveraging the opportunities available and creating new ones for themselves and future generations of entrepreneurs.
MSMEs have played and continue to play a critical role in Ghana’s socio-economic development by producing critical goods and services, creating jobs, and helping to reduce poverty and promote economic growth.
It is estimated that MSMEs represent about 85 per cent of Ghana’s private sector and contribute about 70 per cent of the annual Gross Domestic Product (GDP).
In terms of employment, MSMEs account for an estimated 85 per cent of manufacturing jobs in the country.
Mrs Awadzi said the sector had also provided women and the youth opportunities to harness their economic potentials and it is estimated by the World Bank that about a third of all MSMEs in Africa were owned by women.
Those contributions notwithstanding, MSMEs had always faced severe constraints that stifle their growth, she said.
For example it is estimated that the MSME financing gap in Ghana is approximately 13 per cent of GDP, according to a World Bank 2019 Report on Improving Access to MSME Financing in Ghana.
There is recognition around the world that the economic impact of COVID-19 has been disproportionately felt by the sector.
First, on the supply side, they have faced many challenges including disruptions in their production cycles due to employees and suppliers infected by the virus; a shortage in raw materials and other inputs due to global supply chain disruptions; and increased costs of production due to a shortage of inputs, and spending on new health and safety protocols.
On the demand side, MSMEs have experienced revenue losses and severe liquidity stress arising from weak consumer demand due to closure of businesses in the hospitality, tourism, aviation, education and food industries, among other things. GNA