Small and Medium Enterprise: Need Policy Support to Compete in African Continental Free Trade Area – Report
By Richard Adorsu-
NEW AFRICA DAILY NEWS (NADN) Accra, Ghana- A research report has recommended policy support for Small and Medium Enterprises (SMEs) to be competitive in participating in the African Continental Free Trade Area (AfCFTA).
The report said the support should focus on cheaper and more innovative trade finance products, trade policy, trade infrastructure, improved capacity, trade information and facilitation, market access for growth and expansion of SMEs in the country.
Ghana was selected as the country to host the secretariat of the AfCFTA, which starts in 2021. The AfCFTA provides the opportunity for Africa to create the world’s largest free trade area, with the potential to unite 1.3 billion people, in a $2.5 trillion economic bloc in ushering in a new era of development.
Dr. Samuel Frimpong Boateng, the Lead Consultant for the Research made these recommendations at a stakeholder workshop on the report titled “Mobilizing Diagnostics Data to Inform Bottom-Up Decisions on Government Policies.”
The report was conducted by the Ghana National Chamber of Commerce and Industry (GNCCI) with support from BUSAC Fund. The criteria for the methodology included a minimum of three years reporting of financials, evidence of business operations, business nationality; satisfactory information for valuation, and industry type.
The report recommended that SMEs should be furnished with a more proactive policy environment and be encouraged to re-invest with cheaper capital for faster growth and expansion. This, the report said, required that enterprises created more value by adopting more innovative ways to seal off operational leakages, manage and mitigate risk exposures to balance sheet leverage, industry and product cycles, as well as weaknesses in business models.
The report recommended that Government, together with local and international partners, worked together to ensure that the growth-potential of SMEs were nurtured and transitioned into value-driven ones to ensure sustainability.
On the findings, Mr. Boateng said the overall analysis suggested that the business growth of enterprises was relatively less stable and more sensitive to economic cycles.
It also revealed that most of the growth-resilient industries were in the manufacturing sector, followed by professional services, and education.
Mr. Clement Osei Amoako, President of GNCCI stated that an evidence-based advocacy approach would equip the Chamber with business and industry insights to shape government’s policies and programmes as well as multilateral support in ensuring a conducive business climate.
For New Africa Daily News Richard Adorsu Reports, Africa Correspondent