By Dela AGBO
As Ghana moves to reset its economy under the Mahama administration, there is a renewed focus on one of the most powerful yet underfunded sectors of the economy: Small and Medium Enterprises (SMEs).
SMEs account for more than 80% of businesses in Ghana and employ the majority of the workforce. Yet, their growth and contribution to national GDP remain stunted due to one recurring challenge — lack of access to affordable and patient capital.
The Missing Link: Structured, Patient Funding
Many SMEs in Ghana face difficulties obtaining financing from traditional commercial banks due to stringent collateral demands, high-interest rates, and short repayment cycles.
These conditions are incompatible with the realities of SMEs, which often require time and technical support to become profitable and scale sustainably.
What Ghana urgently needs is a new model of SME financing — one that is structured, affordable, and long-term (“patient”) in nature.
The most effective conduit for delivering this funding would be through licensed investment banks and fund managers that understand capital markets, risk management, and enterprise growth.
A Pragmatic Solution: 50 SME Investment Funds Managed by Investment Firms
To transform the SME landscape, the Government of Ghana should consider a national initiative that appoints 50 reputable investment firms, including experienced firms like EcoCapital Investment Management Limited, to each manage a dedicated SME Investment Fund of GHS50 million. These funds would be used to identify, analyze, train, finance, and monitor 100 high-potential SMEs per fund, totaling 5,000 SMEs nationwide.
Each investment firm would:
- Identify viable SMEs across different sectors and regions.
- Analyze and de-risk the businesses through rigorous financial and operational assessment.
- Provide business development training and governance support.
- Invest equity or quasi-equity funding tailored to their growth cycles.
- Monitor performance with regular reporting and technical support.
- Implement an exit strategy, ideally through listing the businesses on the Ghana Stock Exchange (GSE) or merging with larger corporates.
The Impact: Jobs, Growth & National Prosperity
If each of these 5,000 SMEs employs just 40 staff, Ghana would generate 200,000 sustainable jobs across diverse sectors—agriculture, manufacturing, healthcare, logistics, ICT, green energy, and more.
Moreover, these businesses will form the backbone of a resilient domestic economy, increase tax revenues, and reduce reliance on imports. Ghana’s stock market will also benefit from new, investable, homegrown listings — stimulating local capital market activity.
Global Case Studies: What Can We Learn?
India, one of the fastest-growing economies in the world, has implemented similar models through its SIDBI (Small Industries Development Bank of India) and a network of registered Alternative Investment Funds (AIFs).
These funds are professionally managed, capitalized by both government and private entities, and governed by strong regulatory frameworks. The result: tens of thousands of SMEs supported, millions of jobs created, and a thriving entrepreneurial ecosystem.
In Kenya, the government partners with venture funds and development financiers to inject long-term capital into startups and SMEs, while countries like Brazil and South Africa have SME investment ecosystems driven by public-private collaboration.
Governance and Oversight
To ensure transparency and effectiveness, each SME Fund must operate under the supervision of a well-established Board of Trustees, with representation from the Ministry of Finance, the Securities and Exchange Commission, Ghana Investment Promotion Centre (GIPC), and independent financial experts.
These boards will monitor performance, enforce fiduciary responsibility, and ensure accountability. Professional fund managers like EcoCapital Investment Management will ensure that every cedi is deployed wisely — not just for returns, but for economic transformation.
Conclusion: A Bold Path Forward
Ghana has the opportunity to usher in an SME-led economic revolution. By backing investment firms to drive capital into small businesses, and by prioritizing patient, structured funding, the government can turn policy into productivity and promises into prosperity.
This model isn’t just an economic plan — it’s a nation-building strategy.
The time to act is now.
Dela is the CEO of EcoCapital Investment
