Saturday, April 25, 2009

SME Development in Ghana

The Daily Graphic (no link available) in Accra reported that the University of Ghana Business School had launched a unit for an Enterprise Development Service to help SME owners and operators to improve managerial skills and "become more business oriented". It is intended to link the public and private sectors to find solutions to the problems faced by SME's.

For Ghana, this is an important development. In Accra, merchants set up kiosks everywhere selling fruit, carvings, plastic furniture and anything else that can be sold. The news does not report whether there will be any follow-on support. I hope the IFC, which funded the start-up of the program, has a plan for sustainability and support to new entrepreneurs. The news article does not say, but a program to monitor and provide follow-on assistance would be an important aspect of any SME program.

Another question is whether this program can or will be coordinated with an overall economic development program. A serious problem in Ghana is the fragility of the land tenure. Indeed, the growth of slums is alarming as the urbanization of the country accelerates. One "city" of approximately 300,000 was not even recognized on a map until recently. Land tenure is very weak, to say the least. Consequently, potential entrepreneurs cannot use their assets to obtain any credit to start, much less grow, a business.

The linkage of the type of training now offered by the business school of the University of Ghana with other needs is critical to its success. It would be a pity if the training resulted in a brain-drain or inability to put those skills to use.

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