Take advantage of the Alternative Market
Statistics indicate that Ghana’s economic activity space is made up of over 70 per cent Small and Medium Enterprises (SMEs).
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A large part of that are not formalised into the mainstream economy even though they contribute significantly to the economy.
Available records again indicate that out of about 9 million workforces in the country, only about 1.5 million contribute to the Social Security and National Insurance Trust (SSNIT).
That Ghanaians are entrepreneurial is not in doubt. From the “Mom and Pop shops” in our neighbourhoods to Abossey Okai, Kokompe, Suame Magazine, Traders in Makola, Okaishie in Accra, Kotokroba market in Cape Coast, Market Square in Takoradi, Kejetia in Kumasi, Techiman, Aboabo Market in Tamale and across the length and breadth of the country, there are signs of Ghanaian ingenuity everywhere.
However, we have not been able to translate these creative skills beyond one generation. Many factors have accounted for this challenge. Lack of proper book keeping, the requisite human capital to manage family business, proper accountability and governance structures and of course lack of capital, among others.
A major hindrance to the growth of SMEs in Ghana though is funding or capital for growth and expansion. Research indicates that 8 out of every 10 SMEs established collapse in their first years’.
Graphic Business, therefore, finds it heartbreaking to hear of the news that since the establishment of the Ghana Alternative Market (GAX) by the Ghana Stock Exchange (GSE) 10 years ago, only six companies have so far taken advantage of the huge potential this platform offers to Ghana entrepreneurs.
The GSE has at every occasion promoted this market to educate Ghanaians on the need to raise the needed long-term funds for their businesses.
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Even for start-ups, the alternative market provides an opportunity to be hand-held on the processes to raise capital. Given the many prospects to raise long-term capital from the Ghana Alternative Market, it is surprising that SMEs find it so difficult to take advantage of such an opening when the processes have been so simplified.
Ghanaian entrepreneurs stand at an advantaged position currently as a result of the implementation of the African Continental Free Trade Area.
The current economic challenges facing every Ghanaian business and the financial institutions, especially where interest rates have gone through the roof, SMEs’ surest bet therefore is to take advantage of the Ghana Alternative Market.
The key lesson here is that you are better off being a 60 per cent owner of a US$100 million company than being a 100 per cent owner of $1-million-dollar company.
The GAX has many benefits aside from raising long-term capital for expansion and growth at a lower cost.
It offers any SME the opportunity to be competitive and offers companies improvement in the financial position and balance sheet as a result of the equity injection of capital.
The processes leading to official listing of an SME provides an avenue for learning and invigorating your management team with key management principles and corporate governance rules that only but helps any SME to position itself for the future.
The time when businesses in this country dies with their owners is past gone.
Let the words of our first President Osagyefo Kwame Nkrumah resonate in our business leaders’ ears loud and clear that Ghanaians, given the opportunity, can rise to the commanding heights of businesses in Africa.