President John Dramani Mahama has reiterated government's commitment to strengthen the Small and Medium-scale Enterprises (SMEs) to create more jobs in the country. To make SMEs competitive job creators, President Mahama said the macro-economic stability that had seen single digit inflation rate would be maintained.
The stability, he stated, would ensure that low interest rate on loans would be made available to the SMEs. In addition, there will also be incentives to engage them in skills development programmes.
President Mahama announced this during the televised "Critical Policy Action" policy statement presentation held in Accra last Tuesday. The policy direction is meant to complete the year with the fast-tracking and completion of programmes and projects of the government. The statement is his first major policy statement since he became president after the death of President John Atta Mills.
President Mahama's statement on SMEs falls in line with a story carried by Public Agenda in its Friday August 31, 2012 edition which was headlined "Govt asked to catalyse SME re-engineering." In the said story, it was reported that the government should amend its rules and regulations to get the private sector, especially SMEs, to perform better in order to satisfy consumer needs. The story went further to say that the government should create the requisite political environment which is also essential for ensuring an enabling environment for SMEs to survive.
It was in this light that President Mahama said that as the economy grows at a faster rate, and jobs are created, the government would continue the expansion of SMEs-related policies and help in the growth of the economy. He also said that a Private Sector Advisory Council would be set up to assist the government on identifying the critical needs of the private sector in order to boost it.
Some of the problems that SMEs are going through include high cost of capital meaning that credit needed by SMEs consists of usually of small-size loans and so financial institutions usually perceive that there are high risks involved in lending to SMEs therefore they apply high interest rates to these SME loans.
Another challenge SMEs face is scarcity of investment capital. This is often due to their insufficient financial management, poor savings culture and their inability to control their expenditure effectively.
President John Mahama touted the stable macro-economy the country has enjoyed over the last three years with the promise to hold down inflation, maintain discipline in expenditure and to continue with efforts at ensuring a stable currency. He attributed the recent depreciation of the cedi to increased imports of non-oil products.
He said government would break the cycle of overspending in an election year as this has become a major problem for Ghana.