The Business Development Minister, Dr Ibrahim Awal has expressed concern at the rate at which Small and Medium Enterprises (SME’s) collapse and do not move further beyond three years.
Awal disclosed that about 70 percent of Ghana’s SMEs collapse within their first three years of setting up and, over a period, a deficit has been created on entrepreneurs, as they are confronted with a lack of access to both capital and markets.
The Minister in an interview with Goldstreet Business said the conundrum of such a high rate of businesses not running beyond three years must be avoided if entrepreneurship is to thrive in the country.
In context, a report by the Bureau of Labor Statistics and Business Employment Dynamics has shown that globally, the survival rate of businesses with employees in their first year is about 80 percent.
It showed that, actually, 79.8 percent of SME’s that opened in March 2016 survived in March 2017.
About 70 percent of businesses with employees, however, survived their second year in business, while 50 percent of such businesses survived their third year.
To avoid this deficit – where only 30 percent of Ghanaian businesses survive their third year – the Minister said the National Entrepreneurship and Innovation Plan (NEIP), is going to support entrepreneurs with funding between GHS10,000 and GHS100,000 as startup capital for their businesses.
‘’Measures are also in place to grant startups a three-year tax holiday to enable them to roll back profits to sustain and expand their businesses,’’ he stated.
He added government will, by August this year, launch an Entrepreneurship policy that will serve as a guide for the development and support of entrepreneurs across the country.