AGI reveals shift to importation rather than production by SMEs due to Covid, Russia-Ukraine war
Tsonam Akpeloo, the Accra Regional Chair of the Association of Ghana Industries (AGI), has highlighted that in recent years, a significant number of businesses, grappling with the adverse impacts of the Covid-19 pandemic and the ongoing Russian-Ukraine conflict, have shifted their focus towards importing goods for sale, rather than engaging in local production activities.
The unfolding scenario stems from the challenges faced by SMEs, many of whom lack the resilience required to weather the shocks caused by the successive waves of the Covid-19 pandemic and the geopolitical tensions between Russia and Ukraine. The resultant impact on the Ghanaian business landscape has led to a growing reliance on imports, as SMEs seek alternative ways to sustain their operations.
Akpeloo made the assertion speaking as a panelist at the Ghana Investment Promotion Centre’s (GIPC) second-quarter CEO Breakfast Meeting on Tuesday, May 30, 2023.
Akpeloo’s remarks at the CEO Breakfast Meeting served as a catalyst for an engaging discussion on the relevance of logistics in supply chain growth, both within Ghana and the broader sub-region, in light of the anticipated expansion of trade among African countries under the African Continental Free Trade Area (AfCFTA).
Addressing the AfCFTA and its implications for Ghanaian businesses, Akpeloo highlighted the AGI’s commitment to supporting member companies in their export endeavors within the framework of the African trade pact. For smaller-scale enterprises that may face challenges in exporting their goods independently, the AGI facilitates the aggregation of their products with those of other businesses for streamlined export opportunities under the AfCFTA.
Moreover, the AGI plays a pivotal role in aiding businesses to obtain the necessary quality standard certifications that enable them to export their products under the AfCFTA, ensuring compliance with international trade regulations and enhancing market access for Ghanaian goods.
The Covid-19 pandemic and the Russian-Ukraine conflict have had profound economic ramifications globally, with businesses across various industries forced to grapple with uncertainty, disrupted supply chains, and reduced consumer demand. Ghana’s SME sector, which forms the backbone of the country’s economic landscape, has faced an uphill battle, navigating through these unprecedented challenges.
As the AGI Regional Chair rightly pointed out, the resilience of SMEs has been put to the test, revealing vulnerabilities in their capacity to withstand such shocks. The resulting shift towards imports for resale signifies a pragmatic response by these businesses to sustain their operations and cater to the evolving demands of the domestic market.
While the increased reliance on imports poses challenges in terms of domestic production capacity and self-sufficiency, it also underscores the pressing need for strategic interventions to bolster the resilience of Ghanaian SMEs. The development of comprehensive support mechanisms, ranging from financial assistance to skill development and technological advancements, can empower SMEs to navigate uncertain times, mitigate risks, and regain their focus on local production.
The CEO Breakfast Meeting served as a platform for key stakeholders to deliberate on the way forward, recognizing the pivotal role that logistics and supply chain management play in driving economic growth within Ghana and the broader sub-region. The discussions centered on the need for cohesive strategies that align with the objectives of the AfCFTA, fostering an environment conducive to increased intra-African trade, and positioning Ghana as a competitive player in the regional and global trade landscape.
As Ghana continues to navigate the intricate interplay of global events and regional dynamics, it is crucial for policymakers, industry leaders, and various stakeholders to collaborate closely in implementing measures that bolster the resilience of SMEs, enhance domestic production capabilities, and facilitate seamless trade within the AfCFTA framework.
By harnessing the transformative potential of the AfCFTA and addressing the challenges faced by SMEs, Ghana can pave the way for sustainable economic growth and position itself as a beacon of prosperity in the evolving African trade landscape.
