A recent study by the Ghana Enterprise Agency (GEA) shows that most Micro, Small and Medium-scale Enterprises (MSMEs) in Ghana are unwilling to formalise their businesses due to taxation.
The baseline study that will assist the GEA in developing policies that are supported by facts and will have an influence on the sector of MSMEs also revealed that 15% of them are working with banks to expand their operations.
Again, only 13 percent of MSMEs are willing to go to the bank for loans to cushion their businesses
Speaking to Joy Business, Associate Professor of Economics at the University of Ghana, Professor Ebo Turkson, said this is derailing the activities of the MSMEs.
According to him, these small enterprises lack technical innovation and low rates of technological adoption.
“These findings generally suggest that although Ghana has a very vibrant MSME sector, a large majority are micro-sized, not innovative, highly informal, constrained by access to credit and do not grow in higher size thresholds”, he explained.
Furthermore, he stated in the study that when these MSMEs are supported by roadshows to inform members about the advantages of innovation and productivity, they promote exports.
“If policy can enhance the productivity of MSMEs through innovative activities, it will encourage their participation in the export markets and will partly address the issue of access to credit”, he added
“The GEA should consider undertaking roadshows to educate members about the benefits of innovation as well as the various options that can be pursued: product, process, marketing, and organizational innovations. Professor Turkson added.
Meanwhile, the Chief Executive Officer of the Ghana Enterprises Agency, Kosi Yankey-Ayeh, in her response indicated that her outfit will continue to engage and sensitise the MSMES to aid their growth.
“As we have in the past, we will continue to assist and involve them, ensuring that their activities are padded to assure growth. “She said
The GEA is attempting to establish itself as the central location for MSME datasets, providing in-depth details on the traits, mode of operation, and structure of these MSMEs as well as their location and network connections.
The baseline study will give decision-makers the knowledge they need to deliver their policy interventions to the MSME sector more effectively.
Providing the database required for such investigations will also promote further investigation into this significant area.
Source: Ghana News