Funding MSMEs for long-term economic transformation: Guaranteed failure
Picture yourself trying to fill water into an Olympic-sized swimming pool using teaspoons.
That is essentially how impractical it is when nations pour millions into micro, small, and medium enterprises (MSMEs), hoping to solve structural economic challenges that demand industrial-scale solutions.
The Eternal Development Entrepreneurship Model means solving social, economic and governance challenges through Large-scale Sustainable Development Enterprises fully funded by a Sovereign Development Investment Institution for long-term structural capacity building.
This enforces socio-economic stability and secures funding for macro-economic investments.
According to the World Bank's 2025 Enterprise Survey data, MSMEs across Sub-Saharan Africa face a sobering reality; around 40 per cent are credit-constrained, leading to high failure rates.
In Ghana specifically, the National Board for Small Scale Industries reports that 60 per cent of MSMEs do not survive past year two.
This means millions in development funding evaporating faster than morning dew in the Sahara.
The structural constraints are inevitable when an average MSME employs 2-10 people, mostly operates with less than $50,000 in annual revenue, and services hyperlocal markets; you're not building economic transformation, you're managing survival.
The African Development Bank's 2025 African Economic Outlook notes that MSMEs contribute roughly 50 per cent of GDP across Africa, yet this contribution has remained stubbornly flat for two decades. It's like running on a treadmill and calling it a marathon.
Ghana faces a housing deficit of 1.8 million units, according to UN-Habitat's 2025 Urban Housing Report.
Youth unemployment hovers at 32.5 per cent per the Ghana Statistical Service's 2025 Labour Force Survey. Food import dependency has reached over 40 per cent of total food consumption based on FAOSTAT 2025 data.
Now, can a metal fabrication shop employing five to ten people in Kumasi fund even a small smart-community housing solution?
Can small-scale poultry farms in Tamale, Dormaa, Buipe and every part of Ghana feed or sustain about 35.4million people?
Examine your answer carefully while considering the potential impact of large-scale sustainable development enterprises with the capacity to employ 500-5,000 people, access international capital markets, and deploy industrial-grade technology to bridge national deficits.
For example, South Korea didn't become an economic powerhouse by funding corner shop businesses.
Between 1960 and 1990, chaebols or large, family-controlled, highly diversified business conglomerates that dominate South Korea's economy, producing roughly half to two-thirds of its GDP and exports, received a majority of industrial financing according to the Korea Development Institute's historical analysis.
The result? A GDP per capita increase from $158 to $6,516 in thirty years.
Capital protection, value chains creation
The Government of Ghana allocated about 300 million cedis for the national apprenticeship programme in 2025. Commendable? Perhaps. Transformative?
Not so much because long-term impact remains the biggest challenge.
The International Labour Organisation's 2025 Skills Development Report shows that basic vocational training programmes create low employment outcomes for participants within one year, and most positions are informal sector roles earning below minimum wage.
Funding
Meanwhile, the United Nations Development Programme disbursed significant funding across West Africa for MSME development programmes in 2024-2025.
Here's the uncomfortable question: Where's the economic multiplier effect?
The OECD's 2025 Development Finance Review reveals that a limited number of development finance institutions track long-term economic impact beyond beneficiary counts and loan disbursement rates.
It's a financial theatre. We celebrate "30,000 MSMEs supported" while ignoring that these enterprises collectively employ fewer people than two medium-sized manufacturing plants and generate less export revenue than a single cocoa processing facility.
The African Export-Import Bank's 2025 Trade Report shows that over 90 per cent of Africa's manufactured exports come from large enterprises, not MSMEs.
If we're serious about food security, housing and employment at scale, development capital must flow through development entrepreneurship, building Large-scale Sustainable Development Enterprises (LSDEs) with clear capacity for industrial operations, international market access, and institutional resilience.
The evidence is clear: economic transformation requires scale, and scale requires courage to challenge the convenient narrative that small is always the starting point.
Solving big problems demands a big or unprecedented solution system and structure.
Development Entrepreneur/Independent Development Investment Consultant.
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