Today is a remarkable day as we come together to celebrate World SME Day, a special occasion dedicated to honouring and supporting the small and medium enterprises (SMEs) which form the global economy’s backbone. In Africa, these SMEs play an even more crucial role – accounting for an estimated 80 percent of jobs across the continent. However, African SMEs – including those in Ghana -face numerous challenges in their journey toward growth and success.
As we navigate the post-COVID-19 pandemic recovery, it is evident that African SMEs have been severely impacted; experiencing disruptions in their operations, reduced revenues and increased costs. Unfortunately, compared to their counterparts in other regions, African SMEs have received less support from governments and development partners. This calls for a renewed commitment to empower African SMEs and ensure their resilience in the face of adversity.
Ghana, with its vibrant entrepreneurial spirit, serves as a shining example of the importance of SMEs in the country’s economic landscape. Approximately 85 percent of businesses in Ghana are SMEs, contributing around 70 percent to the nation’s GDP. Recognising their significance, Ghana has implemented various policies and programmes to support SMEs during these challenging times.
Measures such as tax relief, stimulus packages, credit guarantees and the establishment of digital platforms have been introduced to alleviate the burden faced by Ghanaian SMEs. Nevertheless, it is essential to acknowledge that Ghanaian SMEs still encounter obstacles including high-interest rates, low productivity, weak governance and limited innovation.
On this World SME Day, let us shine a spotlight not only on SMEs in Ghana but also on their counterparts across Africa. These enterprises serve as drivers of economic growth, job creation and poverty reduction. Moreover, they possess immense potential to contribute in social and environmental objectives such as gender equality, climate action and inclusive development. To unlock this potential, African SMEs require greater access to finance, markets, skills and technology. Additionally, fostering a conducive business environment, strengthening institutions and improving governance will pave the way for their growth and success.
The African Development Bank understands the pivotal role of SMEs in Africa’s development journey, and remains steadfast in its commitment to supporting their aspirations. Through initiatives like the Africa Small and Medium Enterprise Business Linkages Programme, we aim to enhance the competitiveness and resilience of SMEs in selected sectors and countries. By providing tailored support, fostering innovation and facilitating access to finance and markets, we empower African SMEs to thrive in an ever-evolving global landscape.
Furthermore, when considering the performance of African SMEs compared to their international counterparts, it is crucial to acknowledge the challenges they face due to trade facilitation issues. A recent study by Hansen-Addy et al. (2023) reveals that trade facilitation poses obstacles to the performance of African SMEs in comparison to international SMEs.
Trade facilitation refers to the simplification and harmonization of international trade procedures, including customs clearance, documentation, and logistics. Unfortunately, these challenges reduce the competitiveness of African SMEs in the global market, limiting their access to trade finance and information while facing increased competition from foreign firms.
Nevertheless, African SMEs possess inherent strengths – including innovation, adaptation and resilience – which enable them to overcome these challenges and enhance their performance. Leveraging these strengths, African SMEs can adopt digital technologies, diversify their products and markets, and establish strategic partnerships with other SMEs or larger firms. Moreover, continued support from governments and development partners is essential to creating an enabling business environment, providing adequate financing and offering technical assistance.
In conclusion, on World SME Day, we join together to celebrate and support the vital role of SMEs in driving economic growth, job creation and poverty reduction. SMEs are the backbone of the global economy, and their resilience and adaptability have been tested during the challenging times of the COVID-19 pandemic.
The theme for World SME Day 2023, ‘Building a Stronger Future Together’, resonates deeply with the current status and aspirations of SMEs. The pandemic has presented numerous challenges for SMEs, including disrupted operations, reduced revenues and increased costs. However, SMEs also possess remarkable strengths, such as innovation, adaptation, and resilience, which enable them to overcome obstacles and thrive.
This year’s theme emphasises the importance of collaboration and collective efforts to support SMEs in their journey toward a brighter future. SMEs need increased access to finance, markets, skills and technology. They require supportive business environments, stronger institutions and better governance.
The African Development Bank remains committed to supporting SMEs in Africa through initiatives like the Africa Small and Medium Enterprise Business Linkages Programme. By enhancing the competitiveness and resilience of SMEs in selected sectors and countries, we can empower them to thrive in a rapidly changing global landscape.
Let us recognise and celebrate the invaluable contributions of SMEs in Africa, including Ghana. Their entrepreneurial spirit, resilience and potential for growth deserve our unwavering support. Together, we can build a stronger future for SMEs; enabling them to play a transformative role in driving inclusive and sustainable development. Happy World SME Day!
>>>the writer is a management and business consultant with 10 years of industry experience, CEO of Commec Group and writer. A multiple award-winning consultant delivering exceptional results for clients, she specialises in strategy and planning, operations, project & change management, innovation, and performance improvement. Contact: [email protected] | 0507038639