Let’s be intentional about SME financing — Finance Minister

The Minister of Finance, Dr Mohammed Amin Adam, has said the country must be intentional about providing access to financial resources, expertise and capacity-building programmes that empower small and medium enterprises (SMEs) to drive innovation, create jobs and stimulate economic growth.

He said available data indicates that SMEs were the lifeblood of the economy, which puts a collective responsibility on all stakeholders to ensure their success.

In Ghana, 92 per cent of registered businesses are SMEs while 85 per cent of manufacturing jobs are created by SMEs. The sector also contributes about 70 per cent to the country’s GDP.

“The data is clear: supporting SMEs is crucial to achieving our growth and development ambitions, and we must be intentional about it,” Dr Amin Adam said.

He was speaking at the launch of the SME Growth and Opportunity Programme (SME GO) which is aimed at creating a viable ecosystem that ensures businesses with high-growth potential receive the technical capacity and financial support to scale and create impact.

The minister indicated that Ghana’s growth model must evolve beyond relying heavily on foreign direct investment and raw material exports, which could be volatile and expose the country to external shocks.

Instead, he said the country must harness the potential of homegrown SMEs to build a prosperous, dynamic and competitive economy.

Binding public, private sectors 

Dr Amin Adam said through the SME GO, the government would bind the public and private sectors together to create a better ecosystem for SMEs. 

He said implementing partners – Ghana Enterprise Agency, Ghana Exim Bank and Development Bank Ghana, possess the expertise and capacity to deliver results swiftly.

“We have consulted with stakeholders, including the AGI and civil society, to design selection criteria and financing instruments tailored to meet the needs of high-growth potential SMEs,” he said.

“Additionally, we recognise that financial support alone is insufficient, which is why the programme includes comprehensive capacity-building programmes to upskill both beneficiaries and the wider business landscape,” he added.

He said this was particularly important because it seeks to address the risk of lending to SMEs by Commercial Banks, who continue to be worried about low loan recoveries.

Fulcrum of industrial transition 

The Minister of Trade and Industry, K.T Hammond, for his part, noted that all of today’s first-class economies owe their genesis to the humble beginnings of the SME sector.

He said even in Ghana, the sector is the fulcrum of the industrial transition and the oxygen of the government’s flagship programme, the 1D1F.  

He said at the core of the SME GO lies a clear set of priorities aimed at ensuring that the country becomes the fastest growing and most attractive hub for large corporations, as well as SMEs. 

“The Agenda further emphasises the creation of a regionally and globally competitive cost-effective environment to facilitate business set-up and operation, as well as providing a world-leading business-friendly and sustainable environment.

“Through strategic initiatives and programmes, Ghana aims to enhance the contribution and performance of the SME sector while forging a path towards a future defined by innovation, growth and opportunity,” he said.

Walking the talk 

The Senior Country Manager of the International Finance Corporation of the World Bank, Kyle Kelhofer, said in Ghana, where SMEs constitute a significant portion of the business community, the importance of the SME GO programme cannot be overstated. 

He said the IFC places SMEs at the core of its mandate and is deeply invested in the growth and development of SMEs, as well as the enabling investment climate frameworks and business partnerships -- recognising SMEs’ crucial role in driving current and future economic progress and sustainable job creation. 

“And at IFC, we like to walk the talk. In the last decade, the IFC has brought over 2.5 billion dollars into the Ghanaian economy through investments in sectors such as banking, infrastructure, manufacturing, agribusiness and education/healthcare services. 

“This past year alone, as part of our counter-cyclical mandate, IFC is providing over 400 million dollars in investments, the largest in the past 10 years,” he stated.

He said over $120M of this was devoted towards the financial sector and support for on-lending to SMEs. 

In the coming year ahead, he said, the IFC anticipates not only maintaining but expanding its impact.