Interview: Hannah Tetteh
What sort of measures might help improve access to financing for domestic firms?
HANNAH TETTEH: Small and medium-sized enterprises (SMEs) account for more than 90% of all registered domestic firms in Ghana and represent around 30% of our workforce, yet their growth opportunities are restricted by a number of factors, including managerial skills, scarcity of capital goods and low productivity.
However, the major challenge is the unavailability of adequate financing facilities. To improve the availability of medium- and long-term funds, the government is streamlining existing public-funded financing schemes to improve access for SMEs, and the state is also ensuring financial sector reform takes account of the need to increase access to medium- to long-term financing for sustainable industrial development. A framework is also being created to establish an industrial development fund to provide long-term financing. We are also working with the Ghana Stock Exchange to explore possibilities to reduce the cost of listing on the exchange for local manufacturing firms.
What are the main obstacles to boosting export volumes for processed goods?
TETTEH: Ghana’s long-term strategic orientation is to become an export-driven economy that delivers high levels of productivity as well as decent jobs. The promotion of trade with other developing countries, particularly neighbouring states, continues to be a major priority and we have made significant strides in this regard through the Vision 2020 agenda. However, there are a number of challenges. The two most significant hindrances are inadequate cross-border infrastructure, and weak institutional and human capacity. Lack of adequate regional transport infrastructure is another major obstacle to intra-regional trade growth. In road transport in particular, the lack of east-west corridors has a direct negative impact on intra-regional trade.
Another barrier is the fragmented nature of the region’s markets. There is an urgent need for ECOWAS member states to complete the process of establishing an effective free-trade agreement in the region. Adopting intra-regional trade promotion measures or boosting competitiveness will not bear fruit for African countries unless they adopt the core framework that such a programme of trade expansion demands.
To what extent does Ghana need to further diversify its trading partners to limit exposure to dropping demand in regions like Europe?
TETTEH: The ongoing sovereign debt crisis in some countries of the euro area poses a risk for Ghana’s economic prospects. The EU remains the country’s largest trading partner. Export diversification is widely seen as a positive trade objective in sustaining economic growth. We are focusing on expanding the range of markets in which existing products are sold, but also upgrading the quality of existing products, including agricultural exports. Also important will be the development of non-traditional exports. Ghana is currently involved in a series of trade negotiations with new partners that will serve to drive economic development.
What scope is there for increasing the skills pool?
TETTEH: Ghana has a long history of technical and vocational education and training (TVET), and this is a priority. TVET acts as a valid passport to a well-paid job or self-employment, and is not just an alternative educational opportunity fit only for early school leavers. TVET-related jobs are able to absorb large numbers of young people, in the formal sector and in enterprises, as well as for self-employment in the informal sector.
The government sees investing in knowledge and skills as the cornerstone of developing an employable and globally competitive workforce. Skilled workers create an attractive economic environment for investors. However, TVET alone does not lead to rapid industrialisation or job provision. Good government policies do. As a result, we seek to create a stimulating economic environment that promotes the growth of enterprises.
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