Professional Documents
Culture Documents
IN GHANA
(GETTING THE FUNDAMENTALS RIGHT)
CLIMATE
Tropical and Humid
TEMPERATURE
Whole Country: Average low: 20,5C (69F), average high 26C (79F).
Accra: Average Daily Temperature is 30C (86F).
September, 2009
The world over, entrepreneurship has been identified as the sure way to reducing poverty and
mass under-development of many developing countries for which Ghana is no exception. It is in
this vain that multilateral agencies such as the World Bank and Centre for International Private
Enterprise have sought and continue to provide assistance, both technical and financial for
private sector development in these countries. However, this pathway to poverty reduction and
economic growth – entrepreneurship, which according to Adam Curle (1974; cited in Nsiah
Peprah 2006) involves giving people the motivation to fulfill their economical, social, and
spiritual potentials is yet to be exploited and oriented to boost youth employment.
Ghana, like other African countries, is full of promise and potential, having all the human and
natural resources needed to realize her development aspirations to take her place in the world;
yet it has been the otherwise, with abject poverty, youth unemployment and diseases becoming
the order of the day. The youth are not adequately equipped to deal with today’s challenges.
One of the major challenges facing young people in Ghana is unemployment. The situation
applies to uneducated and educated groups alike. Currently unemployment rate of young people
between 15 and 24 years of age is 15.9% with an estimated number of 1.2% new entrants to the
labor market annually (Ghana Country Report on unemployment, 2002). Unemployment in
Ghana has therefore been described as a youthful phenomenon (Ghana Country Report on
unemployment, 2002).
Most school drop-outs and uneducated youth enter the informal sector to undertake
apprenticeships and on-the-job training in order to acquire employable skills. Apparently those
who are fortunate to attain higher learning come out of school only to realize that Government is
unable to provide them with jobs.
Urged on by the survival instinct, many of the young people have resorted to starting their own
businesses and organizations, but are unable to materialize primarily due to a number of entry
barriers, of which the State, its Agencies and other Non-State Organizations (NSOs) are major
contributors to this failure.
To start with, Government commitment in terms of policy towards youth employment is
inadequate.
While many countries have acknowledged that small enterprises have an important role in their
economies, not much effort has been done to facilitate their growth. Government, as the mother
duty bearer is obliged to play the lead role by initiating policies and programmes that would
create the enabling environment for the growth of new businesses especially for the youth. It is
indeed true that certain programmes such as the Micro, Small and Medium Enterprises (MSME),
Presidential Special Initiative to mention a few have been initiated by Government to support
entrepreneurship, nevertheless these efforts have been directed at existing businesses and usually
opened to all, without specific recourse to the youth.
Difficulty in accessing start-up capital and incentives is also a major setback. The lack of access
to finance is the most fundamental factor that directly constrain the Ghanaian youth in
establishing their business. This is as a result of the fact that they simply do not have the
collateral to access loans from financial institutions and more so are unable to design better
business proposals. This therefore pushes most of the youth into the service sector especially the
women because of the low entry barriers of these economic activities. Support given in the form
of loans by the Government under schemes such as MSME and MASLOC have so many
conditions and terms which eventually denies the youth access and sometimes these loans are
politicized. It is however worth-mentioning that some NSOs have instituted programmes to
directly support young entrepreneurs but these efforts are inadequate to make any meaningful
impact on youth unemployment in the country.
Last but not the least, the youth is challenged with the unbearable competition on both local and
international markets. The Ghanaian market is replete with high caliber competitors including
foreigners who are illegally operating in the retail sector. Most of the youth think of being in the
industrial sector, manufacturing for instance soap and pomade but the taste of their target market
are hooked to similar products from the outside world. Such competitions therefore do not favour
young entrepreneurs whose businesses are embryonic in nature.
Undoubtedly, the insurgence of the world financial crisis has brought with it serious
repercussions for business growth. Already, it has caused the Ghana Government to cut down on
public expenditure and subsequently freezing public sector employment for two years – 2009
and 2010. Major Private Sector actors such as Vodafone Ghana have also begun laying-off
hundreds of its workers – all in the name of the economic meltdown.
Of all the constraints identified above, the most affected lies in the domain of access to funding
and marketing opportunities. Thus the phenomenon has reinforced the difficulties in accessing
capital to start their businesses. Currently the rate of inflation as at August 2009 stands at 19.5%,
making borrowing from financial institutions very difficult. In fact loans can barely be obtained
from financial institutions for the expansion of existing small enterprises; let alone for the
establishment of new ones. In the same vain, both foreign and local markets are frustrated as a
result of the low purchasing power of consumers. Those greatly hit by this are actors within the
manufacturing and commercial sectors. For instance, majority of the informal sector actors such
as market women are complaining bitterly because people are not purchasing their goods,
leading to a downright fall in sales. In spite of this, the global crisis is expected to further
increase informal activities, which constitute already vulnerable groups, such as youth and
women.
There is therefore no doubt that the financial and economic crisis has become a jobs crisis in
Ghana, and SME growth offers the best prospects for job creation. Strengthening youth
entrepreneurship in Ghana therefore would require that Government gets the fundamentals right
by creating an environment that would enable the youth to start, operate and sustain their own
businesses and organizations. To do this, a Comprehensive National Plan to Focus on Youth
Entrepreneurship should be designed. This strategic framework should consider the following
key areas:
Providing soft loans in the form of capital to prospective as well as already existing
young entrepreneurs to boost their operations.
Developing and strengthening their capacity to operate, manage and sustain these
ventures.
Building an integrated market access and trade facilitation infrastructure.
Establishing field units of the Registrar General’s Department to ease the registration of
new businesses.
Loosing tight regulations to favour SMEs owned and managed by the youth. For
example, releasing land for youth in agriculture.
Conclusion
To conclude, youth entrepreneurship presents itself as an indispensable and simple alternative for
reducing youth unemployment and abject poverty in Ghana and the world at large. Thus it cannot
be ruled out of economic growth and sustainable development, hence the need to rethink the
youth as a huge resource stream which can contribute immensely to economic prosperity.
It is therefore envisaged that the four strategic fronts outlined above, when given the necessary
attention by Government, would go a long way to mainstream youth entrepreneurship in Ghana
and perhaps the West-African Sub-Region.
References
Doing Business 2010 Report. Retrieved 14th September, 2009 from http://
www.doingbusiness.org
Gbodo Samuel, 2009. Youth Empowerment in the Liberalized Environment, Ghana – KNUST.
Nsiah Perprah, 2006. Sociology for Development. Ghana, Kwame Nkrumah University of