88% of SMEs have no international certification
About 88 per cent of small and medium enterprises (SMEs) in the country do not have any form of international certification, a study has revealed.
The study also shows that only 22 per cent of SMEs have a quality certification from a relevant domestic regulatory authority while the remaining 78 per cent have none.
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It means that most of them are unable to compete in the African or international market.
This was contained in research findings by CUTS International in partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ GmbH - Ghana) on the theme: “Improving Framework Conditions to Unlock the Potential of AfCFTA for SMEs in Ghana”.
Competitiveness
According to the survey, some Ghanaian SMEs were not competitive due to factors such as producing below maximum capacity; lack of differentiated or unique products; the high price of products to meet international standards; poor financial record keeping and poor financial management practices.
Other factors include the weak systems of upgrading and training human capital; limited access to trade infrastructure and general delays in clearing goods from the point of entry.
In his presentation at a Public Private Dialogue (PPD) on the private sector role and participation in the African Continental Free Trade Agreement (AfCFTA) in Accra on October 13, the Head of Research at CUTS, Isaac Yaw Obeng, said the Ghanaian environment or macroeconomy was weakly conducive for the survival of most SMEs such that firms were unable to compete favourably.
He said there was also a general low capacity at the immediate business environment level to compete, connect and change.
He explained that most of these firms had not made sufficient investments in the production, finishing and packaging of their products to meet international standards.
Ensuring SMEs’ growth readiness
The West African Regional Director of CUTS, Appiah Kusi Adomako, explained that the free trade agreement intends to expand intra-African trade through better harmonisation and coordination of trade liberalisation.
He said for Ghana to fully benefit from the free trade agreement, it was important for SMEs, who formed a large chunk of businesses in Ghana, to be more competitive and ready-prepared to exploit this opportunity.
“With the depth of literature on this pertinent subject matter, there is the need for a nationwide campaign and education on the awareness and potential benefits of AfCFTA and the level of preparedness required by SMEs to fully benefit,” he said.
Mr Adomako said in assessing the growth-readiness of Ghanaian SMEs for their enhanced participation in the AfCFTA, there was the need for knowledge about the AfCFTA, export potential, productive capacity, ability to innovate and ability to compete.