Progress in Ghana's Business Environment, Yet Challenges Persist
Ghana is taking a multi-faceted approach to bolster its Small and Medium Enterprises (SMEs), a crucial sector for economic growth.
One of the key areas of focus is improving access to financing for SMEs. The Ghanaian government is leveraging the capital market to provide long-term funding, with commercial banks offering a range of lending rates, some of which are competitive and specifically tailored for SMEs. This move is part of a broader economic reset plan aimed at reducing borrowing costs for businesses [1][2][4].
However, bureaucratic delays and high financing costs continue to hinder growth. Delays in business approvals due to bureaucratic inefficiencies slow down the pace of economic development. To attract more investment and drive growth, Ghana needs to address these issues and improve access to financing for SMEs [3].
Regulatory consistency is another area of concern. While initiatives are underway to strengthen the financial system and governance frameworks, specific regulatory reforms or harmonization efforts relevant to SMEs are not detailed explicitly. However, the role of policy groups like the AFI’s SME Finance Working Group suggests ongoing collaboration and sharing of best practices internationally, which could influence Ghana’s regulatory environment [5].
Addressing challenges like business expansion constraints and cost barriers to finance often links to capacity-building measures. Although direct details on expansion programs are not presented in the current data, vocational training is recognized as complementary to financial access for SME development [6].
Ghana's financial sector is more developed than many of its neighbours, but SMEs struggle with high interest rates. Infrastructure, particularly in ports and digital services, is improving, but power supply issues persist, posing another obstacle. Transportation costs are another infrastructure challenge in Ghana [3].
Despite these challenges, Ghana remains one of the most attractive business destinations in West Africa, according to the Business Ready 2024 report. A growing, youthful population provides a strong labour force. Ghana also benefits from AfCFTA membership, offering broader market access [7].
In conclusion, Ghana’s comprehensive approach to SME development integrates financial access improvements, fiscal and regulatory reforms, and likely supports capacity building, although vocational training expansions need further elaboration. Addressing the structural issues will determine whether Ghana remains a top investment destination in West Africa.
Businesses in Ghana are seeking improvement in financing access, a key component of economic growth for Small and Medium Enterprises (SMEs). The government's economic reset plan aims to reduce borrowing costs for businesses by providing long-term funding through the capital market and offering competitive lending rates for SMEs, yet bureaucratic delays and high financing costs continue to hinder growth.
