Small and Medium Enterprises (SMEs) need strong governmental support in order to bring economic growth back on track, Philip Oti-Mensah, Managing Director of Union Savings and Loans, has said.

“There are many local industries competing with foreign products. We are not saying that we should make lives easy for the SMEs, they must compete with world standard institutions; but whenever government can, it should protect these industries.

“Protection can come in the form of laws and regulations. Government has made some efforts, for example in the textile and poultry industries, and that effort should be continued; but we need to implement these efforts,” he told the B&FT in an interview.

With about 90 percent of registered companies in Ghana falling into the SME category according to the Registrar General Department, SMEs employ more than 80 percent of the economy’s total workforce and contribute about 50 percent of the nation’s total GDP.

In spite of the enormous contributions SMEs make to the economy, their efforts are hardly recognised due to teething challenges including lack of access to credit, weak management skills, and inability to acquire modern technologies and technical know-how.

To worsen their situation, SMEs are literally left to the mercy of well-resourced multinationals that produce products at a lower unit cost than a small firm.

Mr. Oti-Mensah noted that what government can do apart from introducing subsidies and regulations is to improve the economic fundamentals -- including currency depreciation, inflation, high interest rate and the energy crisis.

“Once these issues continue unresolved, it will be more and more difficult for SMEs to survive,” he said.

Government argues it is doing its bit to support SMEs through institutions like the Micro and Small Loans Centre (MASLOC) and the Export Development and Agricultural Investment Fund (EDAIF), where most of the SMEs receive financial support at concessionary rates.

But Mr. Oti-Mensah believes that government can do more than just that. “On many platforms I have heard politicians say they are working hard to protect local industries, but I believe they should act with more courage and act faster to save SMEs,” he said.

He stressed that he and his team at Union Savings and Loans will continue to focus on helping SMEs in building their capacity to manage their businesses better, and providing finance for growth and expansion.