The Institute of Statistical, Social and Economic Research (ISSER) has called for targeted financial support for small and medium-sized enterprises (SMEs) in Ghana to promote higher value addition in key sectors.
This recommendation is part of ISSER’s 2024 Mid-Year Budget Review, titled “A Critical Assessment of the 2024 Mid-Year Budget by ISSER.”
ISSER emphasizes the need for strategic allocation of funds to SMEs involved in sectors such as agriculture, agro-processing, light manufacturing, hospitality, tourism, ICT, digitalization, and the wholesale and retail trade of domestically produced goods and products.
The review states, “Funds to support SMEs should target those involved mainly in higher value addition in the agriculture (agro-processing), light manufacturing, hospitality, tourism, ICT, digitalisation and wholesale and retail trade of domestically produced goods/products. This ensures funds are not used by retailers and wholesalers for imports.”
To ensure effective utilization of these funds, ISSER recommends distributing them based on an existing database of SMEs.
This approach aims to prioritise established SMEs with a proven track record of higher value addition over newly set-up SMEs.
“Distribute funds based on an existing database of SMEs to prevent newly set-up SMEs with no track record from accessing the funds at the expense of existing SMEs with a track record of higher value addition,” the review advises.
Furthermore, ISSER suggests that funds should be disbursed through financial institutions, including development banks, to ensure they are used for their intended purpose, guaranteeing repayment and sustainability.
“Disburse funds through financial institutions, including development banks, to ensure they are used for the intended purpose, guaranteeing repayment and sustainability,” the review recommends.
In addition to financial support, ISSER underscores the importance of leveraging digital technology and other initiatives to create a business-friendly environment that attracts both domestic and foreign investors. This includes capital inflows into critical labour-augmenting and high-growth sectors.
“Continue utilising digital technology and other initiatives to create a business-friendly environment that attracts domestic and foreign investors and capital into the critical labour-augmenting and high-growth sectors, including agro-processing, light manufacturing, tourism, hospitality and ICT,” the review states.
By implementing these targeted measures, ISSER believes Ghana can significantly enhance the capacity of SMEs to add value, stimulate economic growth, and attract investment into vital sectors.
This approach is expected to create a more resilient and diversified economy, capable of withstanding external shocks and promoting sustainable development.