When I arrived here as British High Commissioner four months ago, I was immediately struck by the potential for the UK and Ghana to work together to create jobs and growth that benefit both countries.
That is what our prosperity agenda is about: sharing UK expertise to support Ghana’s economic development.
We would like to help Ghana to solidify its lower middle income status, particularly by improving the business environment and stimulating enterprise development. After all, at the end of the day, it is the private sector, and often small and medium enterprises (SMEs) which create new jobs not the government whose main task should rather be to set the rules and regulations, preferably with as light a touch as possible, and then police them with fair and equal treatment for all.
Recently, I have been impressed by many young entrepreneurs I have met here with great business ideas including an SME finance start-up, an innovative shoe company and a team creating adventure holidays. However, thousands of micro and small enterprises (MSEs) are locked into relatively very low value ventures, particularly petty-trading or small-holder agriculture.
Most have very little access to credit and currently, given the very high domestic rates, those who do are paying 25 percentage + interest on fully secured loans. Manufacturing is declining as a proportion of the economy and there is a dearth of medium-sized businesses.
That lack of balance in the private sector perpetuates a lack of productivity, a failure to generate sufficient jobs for the disproportionately young population, and dampens both domestic and foreign investment.
The result has been a vicious cycle of low expectations and low returns among Ghanaian entrepreneurs. Yet, small businesses are the foundation of growth. They create industries beyond those connected with commodity exports. Those industries create jobs, jobs very much in demand in a skilled workforce such as Ghana’s.
I regularly discuss Ghana’s economic development with British companies operating here, many of whom either offer products and services to entrepreneurs or are keen to create opportunities for Ghanaian businesses in their supply chains. Not only that, British companies are committed to investing in the social fabric of Ghana as part of their corporate social responsibilities.
I wanted to bring all of this together in a single event to facilitate networking between British companies and Ghanaian entrepreneurs and also to highlight the work the UK government was doing in this space. This is why yesterday, at my residence, I hosted an event called Enterprise Growth in Ghana.
During our event, I announced the latest round of winners in our ‘Enhancing Growth in New Enterprise’ (ENGINE) which is being run by our Department For International Development (DFID), in partnership with TechnoServe.
This programme will support over 1,000 SMEs to overcome barriers to growth and build competitive businesses in Ghana. It will do this by training, mentoring and assisting these entrepreneurs to commercialise new, innovative products and services and link them to capital providers and target markets.
Next week, I will return to the UK to attend two important investment conferences: the Global African Investment Summit and the Ghana Investment Forum. These events provide an opportunity for the Ghanaian government to attract Foreign Direct Investment into several priority sectors. Ghana is the UK’s fourth largest export market in sub-Saharan Africa and has strong economic, historical and political connections with the UK.
I know many UK companies are interested in the Ghanaian market and I, along with our UKTI team at the High Commission, work hard to support them. But investors – whether from the UK, elsewhere in the world or the Ghanaian Diaspora – will want to invest in commercially viable businesses and will want to see a return on their investments: all these private sector actors are, after all, businesses not charities.
They invest when they see a sound business proposition, not out of sentimentality or to take financial losses. And for that, they need a steady, well-run macro-economic environment and clear, transparent processes for securing and procuring contracts.
From a government perspective, making progress on economic liberalisation and addressing any barriers that inhibit both Ghanaian and international companies operating here are key to increasing Ghana’s competitiveness.
The role of government – any government, not just here in Ghana or in the UK – should focus on creating the right macro-economic environment for business to flourish and on building the infrastructure and policy environment needed to facilitate the provision of credit and services.
Having recently emerged from our own economic crisis, and to such an extent that we are now the fastest growing major economy in the developed world, the UK hopes it has something to offer in this field and is delighted to work on it with both the government and private sector in Ghana.
The writer is the British High Commissioner to Ghana.