Developing SMEs in Ghana
One of the most significant backbones of Ghana’s economic and social development for a very long time has been small and medium scale enterprises (SMEs). They are the major driving force for business development, employment creation, production of goods and services and internal income generation in Ghana.
Ninety percent of registered businesses in Ghana are SMEs according to the Registrar General’s Department as noted by Graphic Online. An SME Research Report by Ghana Web also indicated that SMEs contribute an estimated 70% of Ghana’s GDP and account for approximately 85% of employment in the Ghanaian manufacturing sector.
With all these facts in mind, it has become imperative that Ghana intensifies efforts to further develop it’s existing SMEs and prepare to empower the new ones.
The biggest problem facing most SMEs in Ghana is the lack of credit or capital. Many SMEs find it extremely difficult to get the financial backing to boost their businesses. The financial institutions usually decline loan requests because of the positioning of such SMEs.
E-commerce plays an integral part in building a good portfolio for SMEs. Having your products online in an organised way helps to reach a larger audience and generates better sales. This helps create a good portfolio and gives the financial institutions confidence that these SMEs are eligible for the loans requested. Also, being a partner to credible online retail platforms gives these SMEs great credibility to access credit and capital.
Would you rather have a shop in the middle of nowhere or a shop in the busiest part of the city? How many people will walk into your physical shop in a day as compared to the millions of people likely to see your product online?
Business in Ghana has changed and most people would rather shop on their smartphones and laptops than visit physical stores. In the wake of Covid-19, everyone is trying to keep safe and online business has seen a tremendous increase.
SMEs can really leverage on this to grow. Placing your products or services online gives you a bigger platform to showcase your shops and increase revenue. SMEs get to learn new techniques, meet partner brands and expand their businesses with the training and guidance from experts in the online retail industry.
One important area of growth for SMEs in Ghana in the area of employment. Over the years, many graduates complete school with the main aim of landing white-collar jobs, earn a decent salary and build a life from there. With growing numbers of graduates per year and limited opportunities, the best way forward is self-employment.
E-commerce has indeed helped many of such ‘unemployed graduates’ to enjoy good fortunes in developing their ideas. From small scale clothing to mobile phone accessories or cosmetics, platforms like Jumia have made it possible for thousands of unemployed Ghanaians to become gainfully self-employed. This opens the way for these SMEs to then also absorb other skilled people who may not necessarily have their own businesses.
One of the greatest advantages that e-commerce has brought to SMEs in Ghana is that of increased demand. This is as a result of the price war among several vendors.
In the online business, to get good revenue, one needs to have good quality products at very competitive prices. When that happens, more and more customers are willing and able to buy these products and that increases demand. This opens the door for SMEs to grow and expand. Best pricing also facilitates quicker sales hence paving a path to profitability.
In the absence of competition, there is always complacency. The e-commerce industry thrives on competition between vendors. Although the is a bigger customer audience online, SMEs have to be at the top of their games to possess a great share of the market. This then triggers an improvement in the quality of goods and services, customer service, management and other pillars of growth. Without competition, SMEs feel comfortable and do not look for various channels of growth.
There is great potential for SME growth and development here in Ghana. However, it is dependent on all stakeholders to identify the right opportunities and leverage e-commerce in order to maximize this potential. The future is bright and we are just getting started. Start a business today and take it online and if you already own a small business, it’s time to look at it in the e-commerce spectrum.