…as new bill establishes MSME Fund
Micro, Small and Medium Enterprises (MSMEs) in the country will experience some transformation in their structure and regulation from a new law that is expected to boost the sector’s performance.
The Ghana Enterprises Agency bill 2020, which is pending passage in Parliament, when passed into law will provide an appropriate institutional and legal framework for coordinating the promotion of programmes and projects for development of the MSME sector in Ghana.
The policy prescribes the conversion of the existing National Board for Small Scale Industry (NBSSI) into an agency, and will also see to establishment of the MSME Fund to provide funding for MSMEs at lower rates.
Making a case for the bill, Deputy Minister for Trade and Industry Robert Ahomka-Lindsay told the media in Parliament that the new reforms form part of government’s industrialisation agenda, and its commitment to the private/informal sector as a major contributor to the country’s economy.
“In Ghana, our economy is micro, small, and medium. When we talk about the economy of Ghana and how we want to help them as part of the industrialisation agenda of this government, you cannot do so without making sure MSMEs are key components of that agenda and are equipped in such a manner we can support them.
“If you look at the industry in 1984 versus today, that is a very long time ago. In 1984, we did not have the same strategic directions we have today; we did not have any of the interventions that today we talk about. And so the NBSSI, as it is today, is not structured to meet the requirements of our MSMEs going forward. As a government, we have to change it; and do that we have revised its essence with the new law, which is the Ghana Enterprises Agency bill,” the Deputy Minister noted.
He disclosed that his ministry will soon be launching as part of new policy the Micro, Small and Medium Enterprises Strategy, adding that the new strategy’s essence covers a number of areas including formalisation of the MSMEs sector, which currently has over 70 percent of its players being informal.
As regards the fund, he stated: “If you talk to most MSMEs, they will tell you the number-one issue is access to finance. The new agency has part of it; the ability to create a fund that is directly targetted at the MSMEs.”
The Ghana Enterprises bill 2020, which is currently at the consideration stage, was laid in Parliament on October 20, 2020 and subsequently referred to the Committee on Trade, Industry and Tourism for consideration and report. The Committee’s report indicated challenges in the MSMEs sector which affect the sector, and gave their support for the bill’s passage to further develop the sector.
The document stated: “The Committee observed that MSMEs play a critical role in national development and economic transformation. They contribute about 70 percent to GDP. This not withstanding, the sector still faces challenges and constraints that impede the growth of MSMEs in Ghana.
“Notable among them is included the high cost of doing business; limited access to credit and business development services; and inability to meet production standards, among others. There is therefore a need to support growth and development of the MSME sector to generate jobs and incomes, increase government revenue, and help eradicate poverty in Ghana.”
