Cutting-cost during COVID-19; simple steps

For many small and medium enterprises (SMEs) in Ghana, COVID-19 has led to internal cost-cutting measures, such as lay-offs, and a search for external financial support, including accessing the GH¢600 million COVID-19 stimulus package for SMEs by the government.

While the focus on these measures is understandable, due to their promise of quick relief, there are several unobvious wastages in enterprises’ internal production processes that, when eliminated, can offer equally quick and even long-lasting opportunities during and after the pandemic.

Before COVID-19, the Trade for Sustainable Development (T4SD) Hub Ghana — an International Trade Centre (ITC) programme hosted by the Ghana Export Promotion Authority (GEPA) — worked with 15 selected Ghanaian export-oriented SMEs on risks and returns of their resource efficiency business practices.

Through a customised coaching approach, the Resource Efficiency and Circular Production Processes (RECP) module of the T4SD aims at increasing the competitiveness of SMEs in international value chains through the reduced consumption of resources used in the production processes and enhanced productivity.

To achieve this, ITC-trained resource efficiency experts embarked on field data collection; visiting SMEs in the shea butter, cocoa, and fruits and vegetable processing sectors to understudy their practices.

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Gaps

From the data, the experts assessed SMEs’ resources efficiency management—identifying key gaps that produce wastages in their water and energy usage, and waste generation.

Take water usage for instance. Over 90 per cent of all companies studied were found to exceed the water consumption benchmark by between 18 and 25 per cent.

These companies mostly lacked water mass balance analysis and other water use management plans to track the amount of water used in their production processes. The result was the excessive water wastages with no plans for recycling and reuse.

The story was not different on energy usage. Many of the companies energy consumption exceeded comparable industry benchmark values by over 25 per cent; attributable to the usage of inefficient motors and processing technologies; lack of consistent maintenance of machines and improper calibrations, etc.

Moreover, a majority of the companies openly disposed of waste without sound disposal practices. Waste generated was not seen as valuable, and thus, was not recovered or recycled.

To address the gaps, the experts worked with SMEs in identifying opportunities and assessing the cost and benefits for improving their production processes. The measures included several low-cost initiatives that are even more crucial for many SMEs in Africa during this period of COVID-19.


Quantify

First, reducing water usage by installing simple water meters to begin measuring quantities of water used per month or the production cycle, even if water was sourced from wells or boreholes.

Simple water tanks and pumps installed to capture and cool used water, could be reused for cleaning and other purposes.

By assessing their ventilation designs, enterprises could make simple design changes to use natural lighting (eg. installing transparent fibre sheet) as much as possible, all helping to reduce electricity bills.

Enterprises could also explore the possibility of reusing their waste as a resource. From the studies, it was clear that the majority of the SMEs could explore the conversion of their waste into biomass fuel.

COVID-19 is an external threat that SMEs could not have foreseen, but all of them surely can use their strengths to turn the crises into an opportunity.


The writer is T4SD Hub Lead, with contributions by Lawrence Amaning, Ishmael Edjekumhene, Samuel Entee jnr  and Emmanuel Appiah