SMEs central to economic recovery
Finance minister Dr. Mohammed Amin Adam has highlighted the central role small and medium enterprises (SMEs) play in the nation’s economic recovery.
He explained that the private sector, particularly SMEs, has benefitted significantly from government initiatives aimed at promoting entrepreneurship, accessing finance and opening new market opportunities.
SMEs have emerged as the driving force behind the country’s economic resurgence, with new data showing impressive growth in first-half 2024. According to Ghana Statistical Service, the economy grew by 5.8 percent – the highest in five years – largely fuelled by the resilience and expansion of SMEs across various sectors.
Speaking at the 2nd Quarterly Economic Roundtable at the University of Ghana on October 7, Dr. Adam said: “SMEs are the backbone of our economy, contributing 70 percent to our GDP and making up 92 percent of businesses”.
While acknowledging the challenges they face, he said their entrepreneurial resilience has been a key factor in the remarkable recovery of economic growth this year.
Recently, government committed GH¢8.2billion to support SMEs by launching the SME Growth and Opportunity Programme (SME-GO), which aims to address critical issues such as access to finance and markets, complex tax systems and business development support.
Dr. Adam said that this initiative, along with other projects like the Ghana Jobs and Skills Project and Ghana Economic Transformation Project, is designed to strengthen the SME sector and position it as a key driver of economic expansion.
The impact of SMEs has been felt across multiple sectors, with industry, agriculture, and services all contributing to the 6.9 percent growth recorded in second-quarter 2024.
This broad-based growth, according to the minister, is a testament to the effectiveness of government policies that prioritise private sector development, especially SMEs.
“Our policies to support the private sector are having significant impact,” he said.
However, the finance minister cautioned that sustaining this momentum requires addressing persistent risks and challenges facing SMEs. Key among these are the barriers to accessing affordable finance, navigating complex regulatory frameworks and competing in international markets.
The SME-GO programme, he said, is designed to tackle these challenges head-on; providing the necessary tools for SMEs to grow, innovat and integrate into regional and global value chains.
The programme also complements ongoing government efforts to strengthen institutions that support SMEs, such as the Ghana Enterprises Agency and National Entrepreneurship and Innovation Programme. These institutions are being streamlined to offer timely assistance and foster a more enabling environment for SME growth.