The Ghana Youth Business Performance and Sustainability Index Report 2021 has revealed that over 50 percent of youth-owned businesses have failed to deliver any stellar performance for the past year.
According to the Youth Sector Engagement Group (Y-SEG), conductor of the research report, it found in its research that youth-owned or led businesses are moderately sustainable and thus at the edge of collapse; hence, if more effort is not put in or support is not given to these enterprises, most will collapse in the shortest possible time.
Head of the research team, Dr. Prince Boakye Frimpong – who is a Senior Lecturer, Department of Economics at the Kwame Nkrumah University of Science and Technology (KNUST), indicated that between 50 to 60 percent of business scored poorly below the average – with some scoring close to zero, meaning they are likely to collapse very soon if necessary attention and intervention is not given.
He added that, of course, COVID-19 had a fair impact on the performances of youth-owned businesses; but operational and ecosystem challenges also played key roles in the poor performance of the businesses generally.
The report used key pillars such as economic and social systems to analyse businesses, and it noticed that economics scored poorly; and this was attributed to constituencies/factors such as cost of doing business, access to financing and credit, and risk factors involved in the business… all proving negative.
Social factors, on the other hand, recorded some good results with its constituencies; including human capital development of owners in terms of education and skills. This showed that most of the owners have some level of training or skills with the business, and are fairly knowledgeable about their enterprise.
The report indicated that in terms of regional performance, the Western North Region performed quite well – probably due to it being a new region and businesses there taking advantage of the opportunities to develop well.
Dr. Sherif Ghali, CEO of Ghana Chamber of Young Entrepreneurs, on his part stressed that the index report is a gamechanger for Ghana’s youth economic development and entrepreneurship promotion as far as youth interest is concerned. He urged government to use the report for informing the state of youth businesses in the country, and let it inform their policy decisions.
“To government, this is what I have to say: this is the document that will lay bare the strategies and information you need when developing policies which will support young people,” he emphasised.
Representing the Minister for Youth and Sports, Head of Policy Monitoring and Evaluation, Mohammed Hajj M.S. Adams indicated that youth skills development has been a constant at the ministry in order to promote employability of the youth. He assured that the ministry will adopt the report and consider it for implementation into its policies and programmes.
The report’s recommendations indicated that when breaking down businesses into registered and non-registered, it was realised that businesses which are properly registered are performing better than those that are not – therefore recommending business registration processes should be made flexible and accessable with most of the barriers removed or reduced, especially to the other regions, to have more businesses registered.
It also recommended, in terms of policy, considering macroeconomic stability and ensuring access to opportunities and operational spaces, as most of the entrepreneurs do not have the capital to acquire office spaces or work units…especially those into production and manufacturing.