Small and Medium Scale Industries in Ghana

ABSTRACT

The Small and Medium Scale Industries has a long history in Ghana. It was hitherto identified with the rural folks but extended widely into the urban centers of recent times.

Whilst the women had engaged in the processing and preservation of food products, the men were also engaged in such works as Kente weaving, Basket weaving, Designing of Adinkra Cloth, goldsmith, beads production, carpentry, blacksmith, and other related ones to create jobs and generate income for their economic livelihood.

The Small and Medium Scale Industry gained recognition in the early 1960's culminating in the establishment of Institution and Departments such as the National Board for Small Scale Industry (NBSSI), Intermediate Technology Transfer Unit (ITTU) Department of Integrated Rural Development and other related ones owned by the Government of Ghana, all in a bid to provide financial and technical support and other facilities for the rapid growth of the sector. This notwithstanding, the sector has failed to match up with modern standard of business practice.

The area of study was the Ashanti region, but we restricted ourselves to Bonwire, the kente weaving village in the Ejuso Juabeng District, Ntonso the Adinkra cloth/Beads production village in the Kwabre District and three communities in Kumasi namely Tafo/Suame, Asafo and Ahensan because of its central location and disposition to many industrial activities. In all five communities were considered.

The study adopted the sample survey method and used simple random sampling and cluster techniques to collate and collect views of 100 respondents in those selected areas. One hundred (100) questionnaires were prepared and used to interview respondent from person to person.

It was observed that;

1. Many of the business enterprises are poorly sited and owned by single persons

2. Many manufacturers or producers have very poor finishing to their products

3. About 80% of respondent have no modern machines and tools for production.

4. Lack capital which make it difficult for them to expand.

5. Interviewers had initial poor reception from respondent.

However, many of the respondent express the desire to remain in business provided the enabling business environment would improve to enable them afford credit facilities at a reasonable interest rate with a flexible re-payment terms, pay lower tariffs for utilities and have access to raw materials at reasonable prices.

In the light of the above observation made, it was suggested that government and other stakeholders should endeavor to;

1. Create or establish more institution to provide credit facilities with flexible re-payment conditions

2. Reduce taxes for them

3. Provide subsidy for them to be able to sustain

4. Restrict the importation of cheap substitute foreign products

5. Create a platform for them to be able to export their products

6. Construct roads to raw materials resources centers

7. Institute training scheme for industrialist to receive further training

CHAPTER ONE

INTRODUCTION

The study was conducted by group-nine business administration students of Ghana Baptist University College (GBUC) Kumasi, to ascertain the effect of globalization on Small and Medium Scale Enterprises in Ashanti Region. The study was limited to five towns in the Ashanti region, namely Bonwire in the Ejisu Juabeng District, Ntonso in the Kwabre East District, Ahensan, Tafo/Suame and Asafo all in the Kumasi Metropolis.

The study delves into the history of the small industry in Ghana, with particular reference to the Ashanti region. It also delves into the real problems confronting the industry by collating and collecting views of operators in the industry. The content of this report is to establish the truth and create the awareness of the real problems in the sector to enable stakeholders make informed judgment. As such data collected has been analyzed with the aid of diagrams. Findings and suggestions made by respondent and recommendation made out of this study are the concluding part of this report.

Background of the Study

The immense role the Small and Medium Scale Enterprises has played in the socio-economic development of this country cannot be underestimated. The Ashanti region, our area of study has remained a major contributor for the establishment of the Small and Medium Scale Enterprises. The Government recognizing this important contribution of the small scale industry established the Department for Integrated Rural Development, the National Board for Small Scale Industries, ITTU, and other ones to give support to the SME's both financially and technically to facilitate its rapid growth for national development.

A recent nationwide survey of all industrial establishment by the statistical service department revealed that small manufacturing enterprise constitute about 97% and employs 46% of the total industrial labour force in the country. Furthermore, World Bank discussion paper entitled "Private Enterprise in Africa" by Mardson K, and Belet T. states among others "the encouragement of small scale enterprise in both rural and urban areas should be a priority in Africa not only for the impact of development of growing indigenous private sector but also recruitment and training process for future enterprises".

Another nationwide survey by the Statistical Service Department has revealed that the industrial production capacity of the country had been on the decline since 1995 to date.

All the attempt notwithstanding, the sector has failed to make the needed impact and this is due the globalization.

Statement of the Problem

The Development of the Small and Medium Scale industry has been envisaged by the Government and other stakeholders as the basis of the country's economic development. Interestingly, the sector has not attracted the required attention from stakeholders resulting in low productivity with the attendant-inferior quality and high cost of production to the advantage of import substitutes.

During our research it came to our notice that the Small and Medium Scale Enterprises are facing a down turn due to globalization.