Majority of SMEs lack domestic and international quality certification for export – CUTS Ghana
Majority of Ghanaian-owned Micro, Small and Medium Scale Enterprises [MSMEs] do not have either a domestic or internationally-recognised quality certification for exports.
This is per a research conducted by CUTS Ghana.
The finding implies that, Ghanaian-owned MSMEs are uncompetitive in both the African or international market.
The findings also revealed that most of the SMEs also have excess capacities and lack a functioning management structure, and this notwithstanding, most of these firms have not made sufficient investments in the production, finishing and packaging of their products to meet international standards.
“Ghanaian SMEs are uncompetitive and hence, a lot of work and efforts are needed by these firms, policy makers and government to boost their competitive capabilities. Most of these firms also lack connectivity to their clients and suppliers with few using emails and website”, the report disclosed.
The survey was on the theme “Improving the Framework Conditions to Unlock the Potentials of AFCFTA for SMEs in Ghana”.
The findings further revealed that there is a general low capacity at the immediate business environment level to compete, connect and change.
This is evidenced in the general difficulties in accessing trade information and trade-related infrastructure such as good roads and ICT for the purpose of work.
Subsequently, there are also delays in clearing goods from customs besides poor dealings with governmental bodies and policymakers on documentation, registration, licensing and regulatory issues.
The findings further mentioned that the Ghanaian national environment or macro economy is also not conducive for the survival of most SMEs and this makes firms unable to compete favourably. This is due to unreliable electricity supply, high rate of exchange rate depreciation and inflation, which are major hindrances to business operations.
There are also general difficulties in dealing with government bodies and agencies in relation to documentation, registration, licensing and regulatory issues. This is beside the poor ICT infrastructure network.
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AfCFTA: 73.8% of Ghanaian traders lack understanding of “Goods and Services Protocol”
Meanwhile, approximately 73.8% of micro, small and medium sized enterprises (MSMEs) in the informal sector have little to no understanding of the Goods and Services Protocol created to enhance the implementation of the African Continental Free Trade Area (AfCFTA) agreement.
Some 24.7% of informal MSMEs have a fair understanding of the protocol with as little as 1.48% of MSMEs in the informal sector having expert understanding of the AfCFTA.
For MSMEs in the formal sector, 52% have little to no understanding of the protocol, with 35% and 13% of them respectively having a fair and expert understanding of the protocol.
The above are findings from a study conducted by the AYA Institute for Women, Politics and Media in collaboration with GIZ Ghana, Ghana National Chamber of Commerce and Industry (GNCCI) and the Association of Ghana Industries (AGI).
The findings were disclosed at a stakeholder workshop with women entrepreneurs from the manufacturing, services and retail sectors.
The stakeholder workshop was themed “Making AfCFTA Work for Women-led Businesses in Ghana.”
The AfCFTA Protocol on Trade in Goods aims to boost intra-African merchandise trade through several means with the first being the progressive elimination of tariffs and non-tariff barriers (NTBs).
To realize this, the protocol seeks enhanced efficiency of customs procedures, trade facilitation and transit. It also aims to enhance cooperation on technical barriers to trade and sanitary measures.
The intended result is the development and promotion of regional and continental value chains, and enhanced socioeconomic development, diversification and industrialisation across Africa.
Regarding the AfCFTA Protocol on Trade in Services, it provides a sound basis for capacity development activities for the cross-border provision of services which is expected to result in a continental integration of markets for services and contribute significantly to economic activity, as services make a sizable contribution to gross domestic product (GDP) growth in Africa.
