Show interest in macroeconomic issues - SMEs advised

An economist and lecturer at the Ghana Telecom University, Mr Edward Abrokwah, has encouraged owners of small and medium scale enterprises (SMEs) to show more interest in the country’s macroeconomic issues in order to take the right decisions to grow their businesses.

“Every policy decision by the government or the Central Bank in respect of the economy or the currency has a direct or indirect effect on your businesses and that is why you must be interested in the macroeconomic issues of the country,” he said.

Mr Abrokwah made the point at an SME Clinic organised by the Union Savings and Loans Company (USL) in Accra to bolster the interest of SME players in the country’s macroeconomic and monetary policies.

Most often, he said, many players in the SME sector tend to shy away from deliberations on macroeconomic subjects because they think the points raised were too technical and, therefore, must be left for finance and economic experts.

“Taking time to follow and understand what is going on in the macroeconomic environment helps you to plan your businesses and also to make viable investments, especially in challenging times,” the economist told the participants.

Speaking on the topic, “2015 Macroeconomic Projections and Implications for Businesses,” Mr Abrokwah took the participants through how the government raises revenue and spends funds; the operations of the Bank of Ghana, the relationship between government and the private sector, among other issues.

Referring to some of the 2015 macroecomic targets, he said the overall real gross domestic product (GDP) for the year is 3.9 per cent as against the 2014 end- of-year estimate of 4.1 per cent, while the inflation target for 2015 is 11.5 per cent, which is in contrast to the 17 per cent 2014 end-of-year estimate.

He stated that though, the country’s economic projections could face some challenges, especially because of the energy crisis, shortfall in oil revenue, deficit financing and interest movement as well as inflation and currency depreciation, the picture was not entirely gloomy.

He advised SMEs to opt for fixed interest rates or seek to operate with equity; limit expansion and use risk management tools to help manage risks in the face of currency depreciation.

Mr Abrokwah also noted that, “Agriculture is expected to be one of the key drivers of economic growth or economy activity in 2015 and the crop sector continues to be the growth pole within the sector”. He therefore encouraged the SMEs to, “pay more attention to agriculture as it holds prospects in 2015”. 

He added that, “In spite of the slow growth in areas like construction, oil and gas as well as the service sector, they also held some potential”.

Touching on alternative energy sources, Mr Thomas Boa-Amponsem, an official from Mobotho Systems advised the business community to invest in gadgets that could save their expensive equipment from damage that may be caused by fluctuating power supply.

The Managing Director of USL, Mr Philip Oti-Mensah gave an assurance that the regular Union SME Clinics would be continually facilitated by Union’s internal managers, experts from partner institutions as well as external experts (consultants) to ensure that participants receive the best training. He added that the schedule and content will be planned based on learning need analysis.  

“We are happy to say that on this platform, we plan to address the burning topics in the business world in a language that the average entrepreneur can understand,” he pointed out.