Interview: Humphrey Ayim-Darke
How can the private sector and the government support the development of small and medium-sized enterprises (SMEs)?
HUMPHREY AYIM-DARKE: Players in the public and private sectors have worked in recent years to support SMEs, a trend that intensified during the Covid-19 pandemic. The Ghana Enterprises Agency, for instance, has been doing a good job in shaping business methodology, financing, marketing and other activities. However, there is room for the private sector to play a greater role – for example, by helping to ensure that management tools, operational methods and enterprise resource planning (ERP) systems of companies are sustainable.
In the absence of careful planning, there is a risk that short-term interventions will provide short-lived benefits to participating firms. To ensure that these programmes create long-lasting opportunities, it will be necessary for private sector organisations, such as the AGI, to partner with the government to develop time-tested ERP tools to help each SME develop the best business model for their enterprise. SME support should be a holistic activity that both the government and the private sector approach in a coordinated way.
What can be done to bolster industrialisation and value-added manufacturing?
AYIM-DARKE: Fostering industrialisation and the production of value-added goods is dependent on policy consistency and the establishment of a clear agenda by the government. These factors provide the private sector with the clarity needed to plan and invest in the medium to long term. For instance, one of the priority programmes of the current administration, Planting for Food and Jobs, has helped to develop further value-added manufacturing and more valuable exports.
Investment in infrastructure related to the production of raw materials can also be key for value-added manufacturing, as it increases the quality and availability of inputs. I am aware of government programmes for irrigation systems and fertiliser subsidies, which help to guarantee a supply chain for food manufacturers and further develop the agricultural value chain.
Developing market access and demand for value-added locally produced goods boosts the attractiveness of investing in related activities. This is an area where government support is beneficial. Public procurement and tax policies can also play a role in creating an environment conducive to growth. These policies should be aligned with the demands of the domestic market, as well as exchange rates, so that the growth of value-added industry is sustainable.
An important example of this stems from the pandemic, which disrupted supply chain activities. We are engaging with the government to reduce government-set prices to be sure that every player is on a level that is fair to them. The current benchmark discount policy appears to be distorting the value-addition process for the agriculture sector, which is disastrous given the importance of agriculture and its significant potential to support livelihoods and sustain jobs, as well as help slow rural-to-urban migration.
In what ways have the needs of employers changed in light of technological advances?
AYIM-DARKE: In recent years there have been interventions by both government and private institutions to build capacity and develop the specific skills needed in the workforce. The two main fora for this are universities and technical training institutions. The capacity of both has improved markedly in the past few years, a change reflected in the high quality of their graduates. In the manufacturing sector the focus today is on innovation, high-level technology and efficiency in light of the Fourth Industrial Revolution. Investing in technologies also requires investing in the human capital needed to use them effectively. These skills come at a high cost, so each firm will need to tailor its workforce to match its equipment and budget.
Read More from OBG
