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KEYNOTE ADDRESS BY HON. ALAN KYEREMATEN, MINISTER FOR TRADE,
INDUSTRY, and PSD & PSI AT THE LAUNCH OF THE IDA/IFC/GOG MICRO, SMALL
AND MEDIUM ENTERPRISES PROJECT AT THE LA PALM BEACH HOTEL ON TUESDAY
29TH MAY, 2007 AT 9.00AM
Mr. Chairman, Colleague Ministers, Your
Excellencies, Development Partners, Captains of Industry, Entrepreneurs,
Invited Guests, Ladies and Gentlemen,
On behalf of the Ministry of Trade,
Industry, PDS and PSI and on my own behalf I would like to welcome you
all to this function. The primary purpose of our meeting here this
morning is to launch the IDA/IFC and the Government of Ghana, Micro,
Small and Medium Enterprises Project. The MSME Project is an attempt by
Government in concert with our multilateral and bilateral partners to
address the challenges we have identified as militating against the
growth of our small and medium enterprises sector.
The challenges faced by SMEs are well
documented and found to common across all countries.
These are
v
Access to Finance
v
Lack of markets and market information
v
Inadequate Infrastructure
v
Obsolete technology
v
Weak managerial capacity
v
Low productivity and
v
Regulatory burdens
Since the present administration took
over the reins of government considerable effort has been made to get
the macroeconomic fundamentals right and the results are becoming
increasing obvious to any objective observer. However it is important
that if these results are to be sustained we also devote tremendous
resources to develop the private sector, entrepreneurship and small and
medium-sized enterprises.
The development of SMEs is critical to
the overall economic and sustainable growth of any country. SMEs create
of jobs, and incomes. They stimulate private ownership and
entrepreneurial skills, as well as help diversify economic activity
resulting in significant contribution to exports and trade
All over the world countries which have
recognized this truth and have harnessed and channeled resources to
their SME sector have reaped the fruits of rapid economic growth.
Normally when we talk of countries where
SMEs have played a critical role in their economic growth, we all tend
to look at those in South East Asia. It is true that in these countries
SMEs have been instrumental in the achievement of GDP growths of between
8-12 percent. However, in the advanced economies, MSMEs also play a
large role in their economic growth. Within the EU, as recent as 1998,
out of 19 million enterprises, SMEs accounted for 99.8 percent and two
thirds of the jobs in the region were created by SMEs.
The strong performance of the US economy
in recent years has been driven largely by the creation of SMEs. During
the past decade SMEs in the US accounted for 43 percent of job creation.
The role and importance of the Small and
Medium Scale Enterprise (SME) sector in the economy of Ghana cannot be
over-emphasized. It is estimated that 70% of all industrial
establishments are in the Small and Medium Enterprises Sector. It is
also estimated that 85% of manufacturing employment and to a larger
extent overall employment growth in the country comes from the Sector.
The sector contributes significantly to
overall export earnings from the non-traditional exports sector and
creates jobs at relatively low capital cost .SMEs thus have a
significant contribution to make to Ghana's socio-economic development
and growth, and the attainment of its middle income status of $1,000 per
capita per annum by the year 2015.
My ministry, in the New Industrial
Reform and Accelerated Growth sees the SME sector as being crucial for
our industrial restructuring. The thrust of the policy agenda of the
Ministry of Trade, Industry, Private Sector Development and President's
Special Initiative therefore is the promotion, development and growth of
a vibrant, productive and competitive SME sector that generates
sustainable employment, creates wealth and addresses spatial imbalance
in development.
My Ministry has accordingly put in place
a number of interventions and programs to foster the development and
growth of the SME sector. These interventions are spelt out in our
policy implementation Blue Print, the Trade Sector Support Program.
The essential elements of Government's
strategy for the development of the SME sector are as follows:
i)
The
establishment of an SME Directorate at the Ministry of Trade and
Industry to provide strategic policy direction and guidance for the
development of the SME sector. The Directorate also coordinates
interventions by all other MDAs in SME development.
ii)
Strengthening SME support institutions such as NBSSI, GEPC, EMPRETEC,
and NGOs working in the area of entrepreneurship and enterprise
development;
iii)
Facilitating SME financing, through improvement of SMEs' access to
appropriate forms of capital;
iv) Expanding market access for SMEs,
which involves the facilitation of innovative marketing schemes to
enhance SMEs access to domestic and external markets;
v) Technology Improvement for SMEs
through the enhancement of SMEs' access to Research and Development
(R&D) infrastructure, as well as other Technology related facilities;
vi) Promoting spatial distribution of
SMEs;
vii) Collaboration with and
strengthening of SMEs' business associations, through consultations and
dialogue;
viii) Entrepreneurial Skills
Development through harmonization and coordination of
entrepreneurial programmes and activities of various training agencies
so as to enhance the managerial, technical and other competencies of SME
operators;
ix) Development of Business
Incubators and establishment of Industrial Estates to support existing
industrial establishments and start-ups;
x) Provision of vital information to
SME to facilitate effective linkages and networking among SMEs & between
SMEs and Large Scale Enterprises.
The implementation of these strategies
is being undertaken through a number of programmes which may be grouped
under the following broad categories:
INVESTMENT
FINANCE FOR MSMEs
· Micro Finance and Small Loans
Centre (MASLOC)
This is under the office of the
President and provides finance through the Rural Banks for non-lending
to MSMEs.
· Community-Based Rural
Development Programme (CBRDP) (World
Bank)
Provides loans to Farmer Based
Organisations.
· The Italian Fund
This is a €10 million fund which is
available to MSMEs. Procurement of machinery and equipment under the
facility is limited to Italian sources.
· Export Development and
Investment Fund (EDIF)
Provides funding to enterprises in the
export sector.
· The New Venture Capital Fund
The establishment of a new Venture
Capital Fund which is currently capitalized at over US$22 million will
provide access to medium and long term finance for SMEs.
BUSINESS
DEVELOPMENT SERVICE
Entrepreneurship and
Management Training Through Business Advisory Centres
(BACs)
MOTIPS/PSI through the National Board of
Small Scale Industries (NBSSI) provides entrepreneurship training
through a network of Business Advisory Centres (BACs).
. Support Programme for
Enterprise Empowerment and Development (SPEED).
SPEED is a joint effort by the
Government of Ghana, GTZ and DANIDA to build capacities of financial
institution to grant loans to support the operations of SMEs. SPEED 1
ended in May 2006 and SPEED 2 is coming up shortly and will open a
window for Venture capital and a Guarantee Scheme.
v. Promoting the Clusterization of
firm s and providing them with support
INFRASTRUCTURE
SUPPORT
Technology Improvement and Capital
Goods Centre.
Revamping of the Kumasi Suame Industrial
Estate, and the Creation of Technology Improvement and Capital Goods
Centre.
· Garment Village
Factory shells have been provided in the
Tema Free Zone Enclave and the former GNTC Adherent warehouses for mass
production of garments for exports.
· The Free Zones Programme
Under the Free Zones Programme
infrastructural facilities are provided in Tema. Other free zone
enclaves are being developed in Western Region in Sekondi and in the
Ashanti Region.
· Ghana Industrial & Commercial
Estates Limited (CICEL)
This is sponsored by SSNIT to provide
production space for MSMEs. The facility is located at Weija. GICEL is
basically an industrial estate where various small enterprises and
artisans practice their trade.
COMMERCIAL &
MARKET LINKAGES
· Sub-Contracting and
Partnership Exchange Programme (SPX)
This programme is facilitating local and
international subcontracting and outsourcing of non-core activities to
SMEs by large local and international companies. This is meant to
support SMEs to expand their operations. Under this programme, a
database on 400 SMEs has been established to facilitate effective
linkage with large scale companies.
· Export Trade Houses
The Trade Houses specialize in export
marketing so that producers of exportable products can concentrate on
production activities to enhance the supply base and improve supply
response. Currently, 3 Export Trade Houses have been established,
namely: Ghana Trade Centre; Ghana ECOWAS Export Trade House (GEXTRACO);
and GNPA Export Trade House. These would act as export brokers between
SMEs and selected external markets.
· Foreign Trade Representation
Foreign Trade Representatives are being
appointed to provide market intelligence and promote the export
marketing of products of SMEs in their countries of accreditation.
· National Product Gallery
A web-based product gallery is being
developed to support MSMEs to show case their products.
· Consumer Credit Scheme to
Promote MSMEs
This is being put in place to enable
Ghanaians to purchase Made-in-Ghana Goods on Credit.
· Trade Fairs and Exhibitions
The Ghana Trade Fair Company provides a
platform for MSMEs to showcase their products and services through
various trade fairs and exhibitions.
TECHNOLOGY
DEVELOPMENT SERVICES
· Technical Improvement
Programme
This is aimed at conducting technology
audits and retooling industries to improve their productivity and
enhance their competitiveness.
· GRATIS Foundation
Provides technology support to MSMEs to
in the areas of machinery and equipment design and manufacturer training
in new technologies
· Ghana Standards Board (GSB)
Provides quality assurance services to
MSME to enable them meet both local and international standards and
other technical requirements.
· CSIR and other Research
Institutions
Provide R&D support services to
MSMEs.
Unlike in the past where approaches to
SME promotion have been fragmented, widely diversified with focus on
different problems we have tried to provide a well structured,
comprehensive, integrated and harmonized framework under the TSSP
programme for promotion and development of SMEs. It is in that light
that the MSME Project was redesigned by my Ministry to complement
efforts to speed up implementation of the TSSP.
Most of the interventions under the MSME
Project are derived from strategies outlined in the Trade Sector Support
Program and the National Private Sector Development Strategy. The focus
of the MSME project is to address a great number of the challenges
confronting SMEs which I elaborated on earlier.
The MSME Project addresses challenges at
the both the lateral and vertical levels. At the lateral level, the
project addresses access to Finance, markets, information, technology,
infrastructure and entrepreneurship. At the vertical level i.e. the
project also addresses challenges at macro, meso and micro levels. This
has been done to ensure that we achieve a concerted and coordinated
approach by all players at addressing the issues of MSME development.
I am mindful of the fact that there are
also presently a number of programs being undertaken by government MDAs
and our development partners meant to address these same problems. It is
important that we do not duplicate our efforts. I will advise that the
executing and implementing agencies of these programs engage one another
in fruitful dialogue and work closely together as possible. This is to
ensure that you achieve synergies and reinforce what each other is
doing and create a harmonized support system for our MSMEs.
Ladies and gentlemen I would like to
express my appreciation to our multilateral and development partners as
well as my colleague ministers for their support to this project. I also
want to recognize our entrepreneurs whose courage, vision and dynamism
has brought us here today. Finally I want to also express my gratitude
to all the staff of my ministry and other government MDAs who have
worked tirelessly to make this launch possible.
On that note, ladies and gentlemen, it
is my pleasure to declare the IDA/ IFC/ GOG Micro and Small and Medium
Enterprises project duly launched.
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GOG/IDA/IFC
Funded