More informal sector businesses are taking steps to formalise their operations to benefit from various interventions designed to alleviate micro, small and medium scale enterprises (MSMEs) from the impact of the coronavirus disease (COVID-19).
The regulatory agencies such as the Registrar General’s Department (RGD), district assemblies, and Ghana Revenue Authority (GRA) have started experiencing a gradual surge in the registration of businesses in the country.
For instance, data from the Ghana Revenue Authority showed that Tax Identification Number (TIN) registration increased from approximately 110,000 a month to 815,449 from May 19 to June 30, 2020.
The Director, Entrepreneurship Development of the National Board for Small Scale Industries (NBSSI), Ms Habiba Sumani, made this known to the Daily Graphic at a business formalisation seminar for MSMEs on October 6 in Accra.
Following the economic impact of the COVID-19, the NBSSI with support from the government and Mastercard Foundation initiated various interventions to cushion MSMEs.
Some of the interventions of include the Coronavirus Alleviation Programme Business Support Scheme (CAP BuSS) and COVID-19 Recovery and Resilience Programme for MSMEs (Nkosuo).
While the government committed GH₵750 million to the CAP BuSS and Mastercard Foundation also invested GH₵90 million into the Nkosuo programme.
To get access to the loan, the businesses among other things would have to provide prove of formalisation including business registration certificate and TIN.
Behind the surge
Ms Sumani observed that majority of the informal sector businesses were currenting undergoing the process to formalise their operations.
“When you look at the broad spectrum you will realise that a lot more of the small and medium enterprises taking the right steps to formalise their operations and that is a step in the right direction,” she said.
Based on a preliminary assessment by the NBSSI, she said the reason behind the surge in the registration of businesses was in two-fold.
“There were one group that had already realised the need to formalise their operations even before the stimulus package was introduced and another group with no intention to formalise but have now decided to do so due to the funds available,” she added.
Ms Sumani noted that the NBSSI had realised that due to financial challenges, some of the businesses that had interest to regularise their operations had found it difficult to do so.
“There are some businesses that are also seeking to go along the formalisation drive but due to financial challenges they are not able to do so.
“And so, through our programme we are trying to help them formalise by paying about 80 per cent of the registration for them,” she added.
The Chief Executive Officer (CEO) of Lokko House, Ms Stefania Manfreda, who participated in the seminar, urged other businesses to regularise documents on their operations in order to attract investment.
Lokko House is a unique Ghanaian establishment dedicated to cultivating and promoting Accra’s urban art, fashion and creative culture.
Founded in 2008 by Designer and Creative Entrepreneur, Stefania Manfreda, Lokko House has for the past 10 years challenged and tackled head-on the issue of lack of accessible spaces and avenues of expression available to young creatives.