Start-up sme Centres - Ssc Ghana Ltd

Launching of 50 Start-up (SSC) Centres

27th June, 2019 is second year of the commemoration of the UN Day.
Global and Africa Regional Significance of UN International Day for Micro Small Medium Enterprises (MSMEs)
Start-Ups and SMEs are important part of economies, globally, continentally and nationally. Globally, 95% of businesses are Micro Small Medium Enterprises (MSMEs). About 60% of all private sector jobs are from small businesses. “The Private Sector drives job growth, accounting for 87% of total employment in 2016” (International Trade Centre (ITC)/UN,. 2018). 4/5 of new formal jobs in emerging markets are from MSMEs, as major job providers, catalysts for growth, and promoters of innovation, creativity and decent work for all. Start-Ups also account for up to 50% of all new jobs. Young entrepreneurs are more active in high-growth sectors, are more likely to hire other young employees and pay higher wages than ‘older’ firms. But globally over 66 million Youth are unemployed, and 145 million young workers live in poverty. A mismatch in skills means that many young people cannot secure jobs. Entrepreneurship therefore becomes imperative for providing
self-employment to the entrepreneurs and other youth. However, Start-Ups and SMEs are neglected and not assisted to realize their potentials for alleviating poverty, creating jobs, livelihoods, incomes and decent work for many.

27th June: Significance of UN International Day for Micro Small Medium Enterprises (MSMEs) to Ghana-Part 1

By Nelson Godfried Agyemang

Introduction and Background

The United Nations General Assembly on 6 April 2017 designated 27th June as International Day for Micro Small and Medium-sized Enterprises (MSMEs) in recognition of the importance of Micro Small and Medium-sized Enterprises (MSMEs) in achieving the new global development goals and the need to improve small business access to microfinance and credit. In a resolution A/RES/71/279 adopted without a vote, the 193-member body also invited all stakeholders, including Member States, UN entities and civil society organizations, to facilitate observance of the day by increasing awareness and actions to support small business’ contribution to the 2030 Agenda for Sustainable Development, which the Assembly adopted in September 2015.
The resolution was introduced by the delegation of Argentina (co-sponsored by 54 member states), with its representative stating that more than 95 per cent of enterprises in the world are micro-, small- and medium-sized and they account for about 60 per cent of private sector employment. “These enterprises can in fact become the engines that sustain growth for long-term development in developing countries,” the representative said, thanking the contribution made by the International Council for Small Business (ICSB) to the creation of the Day.
ICSB held its 61st Annual World Conference at United Nations in 2016, in which authorities from over 55 countries participated. In that occasion, ICSB made a declaration about the urgent need to have a day to recognize the important role of micro, small, and medium enterprises in the development of economies as a whole.
27th June, 2019 is second year of the commemoration of the UN Day.
Global and Africa Regional Significance of UN International Day for Micro Small Medium Enterprises (MSMEs)
Start-Ups and SMEs are important part of economies, globally, continentally and nationally. Globally, 95% of businesses are Micro Small Medium Enterprises (MSMEs). About 60% of all private sector jobs are from small businesses. “The Private Sector drives job growth, accounting for 87% of total employment in 2016” (International Trade Centre (ITC)/UN,. 2018). 4/5 of new formal jobs in emerging markets are from MSMEs, as major job providers, catalysts for growth, and promoters of innovation, creativity and decent work for all. Start-Ups also account for up to 50% of all new jobs. Young entrepreneurs are more active in high-growth sectors, are more likely to hire other young employees and pay higher wages than ‘older’ firms. But globally over 66 million Youth are unemployed, and 145 million young workers live in poverty. A mismatch in skills means that many young people cannot secure jobs. Entrepreneurship therefore becomes imperative for providing
self-employment to the entrepreneurs and other youth. However, Start-Ups and SMEs are neglected and not assisted to realize their potentials for alleviating poverty, creating jobs, livelihoods, incomes and decent work for many.
SMEs also make up 70-90% of African Economies; contributes 70% of its GDP; supply about 80% of its Jobs; cater for the lower end of majority of its population and holds the potential for poverty reduction and development of African economies, and achievement of Sustainable Development Goals (SDG).But this sector is woefully neglected and undeveloped. Development of SMEs in Africa holds the key to a Continent at the verge of its historic and unprecedented development.

Significance of UN International Day for Start-Ups in Ghana

Among the Youth of Ghana are some of the top ICT brains in the world but which are wasting because of neglect due to lack of Institutional Framework to deliberately identify the potentials of our human capital and develop them into National assets which have significant contribution to the Economy. But this is what has propelled progress in developed and emerging Countries. No wonder that “It is obvious that it is the youth who will drive the discovery of new technologies, innovation and growth in the future”(p. 163 NPP 2016 Manifesto). Whilst there is the dearth of Job Solutions in Ghana however, several youth have hatched innovative ideas , invented technologies, products and services which are badly needed to meet growing needs in Smart Technologies and ICT, food security and agriculture, health, water systems, renewable energy, waste recycling, waste to energy, adaptation to climate, affordable housing and rural enterprises, but these do not go beyond the stage of discovery into enterprises which are productive, profitable and sustainable, meeting the numerous needs that are in the community.

Challenges of Ghanaian Start-Ups

Several innovations and inventions therefore do not end up being enterprises, leading to killing off creativity, ideas shelved, or prototype products shelved, discarded or stolen by more wealthier and powerful people and organizations. Over the years, several innovations have been created by youth, are show cased in exhibitions, some awarded, but are not assisted to become start-ups, developed nor incubated to take off as invention enterprises. Many inventors and makers are thus not inspired, motivated, educated nor incubated to develop their products and potentials.

There are no systematic innovation and invention inspiration, education and development ecosystem.

Start-Ups face a stiffer challenge of finance. In view of the fact that the businesses are new, owned usually by youth, and laden with risks, they find it difficult to attract financing from existing financial mechanisms. The lack of a Venture capital and angel investing mechanisms therefore is a pity for start-Ups since government has failed to address this in a comprehensive manner; the existing government interventions to Start-Ups financing is piecemeal and inadequate, uncoordinated and scattered in various bureaucracies unknown to those who need it, and fraught with wastage, ineffectiveness and leaving the sector further financially weakened.

Dealing with some Challenges of Ghanaian Start-Ups

There is therefore the need to have systematic innovation and invention development through a model such as Start-Up SME Centres(SSC) within a Network of Community-based Youth Enterprise Incubation centers which connect together at Community, district, regional and National Levels,
which can also provide motivation and inspiration to Inventors, Innovators, Young Entrepreneurs and start-ups who can also advocate and engage with both the public sector, private sector, academia, media, Civil Society and Advocacy Platforms and other stakeholders in developing a better Inventions and innovations ecosystem to encourage creativity which results in viable enterprises that impact numerous social, economic and environmental needs facing Ghanaian people and communities. Several Community based Youth entrepreneurship Incubation centres have been set up cost effectively using the Start-Up SME Centres (SSC) Model, which have been franchised to several community facilities in the private sector which are underutilized such as facilities of Business, communication and community centers, CSOs/NGOs, Churches and Mosques. A franchise is given to private owners of such facilities, who are trained to run and manage the facilities as Youth Enterprise Incubation Centers under this. It is time to take the bull by the horn and develop the necessary means to create opportunities for our teeming youth who are potentially entrepreneurs but are seeking for non-existing jobs merely because there are no means and direction for them to realize their aspirations and goals of utilizing their great potentials.

Significance of UN International Day for SMEs in Ghana

70 % of Ghana’s economy is the informal sector (GSS, 2017). This is the sector in which SMEs are found. SMEs in Ghana have been noted to provide about 85% of manufacturing employment of Ghana. They are also believed to contribute about 70% to Ghana’s GDP. They represent about 80% of the private sector and account for about 92% of businesses in Ghana (Abor & Quartey2010; Abor & Biekpe ,2006). In view of the fact that SMEs make up a big proportion of the firms in Ghana, they play an important role in the growth of the economy.

The Woes of SMEs in Ghana

SMEs are woefully neglected and undeveloped in spite of their real and potential contribution to alleviating poverty, creating jobs, livelihoods, incomes and decent work for many. The several government interventions for developing the sector did not yield the required results because they were shrouded in government and civil service bureaucracies, in view of their insistence to run and manage such programmes, in spite of the fact that civil service training does not include the running of business. In view of that they run these SME focused programmes like civil service with all the red tapes, bureaucracies, and delays, which are unfriendly to business culture. In view of this, SMEs do not patronize these services, if in fact they even know about them, and the huge monies repeatedly invested by Development Partners go down the drain apart from the vehicles that programme Managers get to use and the expensive capacity building trips they make.

A bigger Private Sector Dilemma of Government

Government finds it difficult to take its hands off Private sector apart from the need to create the enabling environment, policy, regulatory and legal framework for businesses to thrive as government touts that business is engine of growth. Government does not have business in the actual running of business and therefore whether it is capacity building for start-ups, SMEs and the wider private sector or financing, the actual day to day arrangements to these services should be left in the hands of private sector businesses, unlike as it is now.
Notwithstanding the recognition of the important roles SMEs play in Ghana, their development is therefore largely constrained by a number of factors, such as lack of access to appropriate technology; limited access to international markets, the existence of laws, regulations and rules that impede the development of the sector; weak institutional capacity, lack of management skills and training, and most importantly finance. (Abor& Quartey,2010). Start-Up SME Centres (SSC) has therefore been set up as Private sector Intervention to fill the Capacity and Capital gaps that face our SMEs and do not enable them fulfil their full potentials.

Dealing with the Start-Up and SME financing challenge

Government needs to find and secure financing for Start-Ups, SMEs and Private Sector if they will continue to make their meaningful contribution to the economy. In fact government needs to take euro-bonds, other sovereign financing instruments and guarantees to Finance Start-Ups and SMEs for the real and potential contribution they make to the economy. The argument that Start-Ups and SMEs and for that matter, private sector should find their own finance is neither here nor there as they are the biggest contributor to the economy. When it comes to certain areas where government controls the finances such as the cocoa sector it is ready to take euro-bond but not the other sectors which make more contribution to the economy, because government will not control the funds.

Nelson Godfried Agyemang is Founder of Start-Up SME Centres (SSC )Ghana Ltd; Start-Up SME Foundation (SSF) and Rector/CEO Institute of Certified Management Consultants (ICMC) Ghana (Business Development Service Providers Association of Ghana (BDS-PAG): Cell: +233241888167; - E-mail: [email protected]

27th June: Significance of UN International Day for Micro Small Medium Enterprises (MSMEs) to Ghana-Part 2

By Nelson Godfried Agyemang

Declaring Month of June for More Comprehensive Reflection and Actions for Start-Ups and SMEs in Ghana

In view of the importance of these matters, Start-Up SME Centres (SSC) Ghana Ltd; Start-Up SME Foundation (SSF) and Institute of Certified Management Consultants (ICMC) Ghana (Business Development Service Providers Association of Ghana (BDS-PAG) have jointly declared the Month of June to be observed as Start-Up and SME Month and is urging the relevant arms of Government to support this move by Declaring the Month of June as Ghana’s Start-Up and SME Month. This call is made with the view to underscore the important role that Start-ups and SMEs play in the Ghanaian Economy, and the challenges they face which impede the further contribution they could have made to the economy beyond what they currently do. June is chosen because the UN chose 27th June to be the International Day of Small Business.

These Opportunities and challenges of Start-Ups and SMEs require that the Month of June is observed as a period of reflection, reminders, and actions in our bid to remove bottle necks and explore better ways of enabling start-ups and SMEs to address youth unemployment, rural and urban poverty, incomes and livelihoods for women, providing decent jobs for all and empowering wealth creation and allowing shared growth in such a manner as to achieve the overarching Purpose of the Sustainable Development Goals (SDG) of ‘Leaving no one behind’.

Launching of 50 Start-Up SME Centres in all 16 Regions of Ghana

June was further considered because the business partnership in commemoration of UN International Day for MSMEs and the Start-Up SME Centres (SSC) Ghana Ltd observance of MSMEs Month on 27th June, 2019, has chosen the same Month to Launch 50 Start-Up SME Centres (SSC) in all 16 regions of Ghana as private sector initiative to deal with the double jeopardy of capital poverty and capacity poverty bedevilling the Start-Ups and SMEs in Ghana. Thus Start-Up SME Centres (SSC) Ghana Ltd is a business partnership involving Start-Ups and SMEs, CSOs, Faith-based Organisations (FBOs), Traditional Authorities, Knowledge and Capacity Institutions and Individuals, which all have a common vision for using Social Enterprise and Business to develop the informal economic sector of Start-Ups and SMEs to positively impact on the Majority of Citizens in the lower end of the population such as to take a bite of the National cake of resources and opportunity for shared growth and sustainable development. So from Tumu to Afadjato; Adaklu to Nkroful; Kasapin to NanKpanduri; Tuna to Busua; Jasikan to Daboya; Nalerigu to Banda; Kasoa to Bole; Yunyoo to Daboase; Mim to Bunkpurugu; Walewale to Adentan; Worakose to Sagnarigu; Kpassa to Kintampo and so on, Start-Up SME Centres (SSC) crisscross the length and breadth of the Republic of Ghana, in a manner reminiscent of the admonition of President Akufo Addo, urging Ghanaians not to be passive citizen observers waiting for Government to do everything but be active citizens taking their own actions and initiatives.

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Development Partners (DPs) in Search of Appropriate Institutional Framework for Start-Up and SME Development in Ghana
This is about the dilemmas of Development Partners (DPs) in search of appropriate institutional frameworks in the emerging geo-politics of unipolar private sector. The world has gone predominantly private sector. And development partners of Ghana are in a dilemma as they seek for appropriate Institutional frameworks to deliver their partnership objectives with Ghana in a manner that will yield expected results for Start-Ups and SMEs, Private sector and the economy in general. The dilemma stems firstly from the existing challenging Institutional environment with pervasive lack of Capacity in all sectors. Weak institutional capacity is so pervasive so much so that the Institute of Certified Management Consultants (ICMC) Ghana has described Ghana’s poverty ‘as merely capacity poverty more than anything else, considering that after all Ghana is not poor in natural resources, so to speak, but lacks the requisite institutional and appropriate human capital capacities to harness those resources for the development of the Nation for the benefit of its peoples’ (ICMC Ghana, 2018).

In the specific issue of dealing with Start-Ups and SMEs as private sector, by their agreements with Ghana, Development Partners point of call is with government and not Start-Ups and SMEs as private sector, and may not deal with Start-Ups and SMEs as private sector directly without government approval of the frameworks. Government by virtue of its agreements with development partners seek as always to provide public sector Institutions or MDAs as the first point of call even if the matter as stake is Start-Ups and SMEs as private sector. The inappropriateness of public or government institutions to execute/or implement on matters of Start-Ups and SMEs as private sector/business emerge, as governments do not do good business much as they try. The bureaucracy is not conducive for business flexibility and speed. The Civil Service machinery is not trained in business nor do they have a clue as to how businesses are run.

The Civil Society Option which DPs alternatively turn to are charity but not business oriented (unless retrained for that purpose) and therefore are equally inappropriate for providing Institutional Framework for business development services for Start-Ups and SMEs.

Start-Ups and SMEs Institutional Framework
Private sector’s own institutions are available, but are in the formal private sector involving big business, constituting 20% of the Ghanaian private sector. The majority 80% of Ghana’s private sector, the informal sector consisting of start-ups and SMEs are not provided for. The Informal sector of start-ups and SMEs do not have their own ready institutional framework to cater for their needs. This is the reason Start-Up and SMEs Centres (SSC) have been set up to fill this gap by creating appropriate Institutional Framework which Start-Ups and SMEs can call their own, responsive to their characteristics and needs. Although the Umbrella Professional Body of Business Development Service (BDS) providers exist, i.e. the Institute of Certified Management Consultants (ICMC) Ghana yet in order to make them accessible at grassroots level to provide BDS to Start-Ups and SMEs everywhere, chapters of ICMC Ghana have been rolled out across Ghana in same hosting facilities as the SSCs. In this way the Start-Ups, SMEs and the BDS providers are found in the same service market place enabling ease of interaction between Business Development service demand-supply,

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and jointly making SSC-ICMC Ghana appropriately Business Development Service Market Place (BDSMP).
Start-Up and SME Institutions Ghana
In this private sector-led Institutional Framework which has been innovatively set up through franchise partnership with several organizational types (apart from public sector) but including CSOs in Social Enterprise and Economic development, Businesses, Faith-based organisations, Traditional Authorities, consulting firms and others, it is possible to roll out a comprehensive programme effectively, efficiently and speedily for Start-Up and SME development using the Start-Up SME Centres (SSC) Ghana Ltd and Start-Up SME Foundation (SSF) Brands in such a manner there is always appropriate Institution be it Limited by shares or limited by guarantee as the case maybe especially appropriate for different kinds of financing and conditionalities.

Taking Euro Bond to Finance Start-Ups and SMEs in Ghana

A call on government to take Euro Bond to Finance Start-Ups and SMEs in Ghana was made by Start- Up SME Centres (SSC) Ghana Ltd with its Capacity and Knowledge Partners (Business Development Service Providers Association-BDSPA and Institute of Certified Management Consultants-ICMC- Ghana. This call urging the Ghana Government to take Eurobond to Finance Start-Ups and SMEs in Ghana was made in a Press Statement as Part of Preparation to Commemorate June as Start-Up and SME Month on the Theme: The Importance of Start-Ups and SMEs to the Economy of Ghana.

Ghana’s Multistakeholder Support and Involvement
The Statement urged Ghana’s Multistakeholders, including Civil Society and NGOs, Development Partners, Private Sector, Trade Unions, Faith-based Organisations, Trade Associations, Students and Youth Organisations, Women’s Groups, Political Parties, vulnerable and excluded sectors of the population and Others to rally around this call for the Ghana Government to take bold decision to take Euro Bond to Finance Start-Ups and SMEs in Ghana because such a decision is good for the economy.
Government Action and Parliamentary Approval under certificate of Urgency
This call urging All Arms of the Ghana Government to take this bold step to take Eurobond to finance Start-Ups and SMEs is because Start-Ups and SMEs usually referred to as the informal sector, constitute 70 % of Ghana’s economy (GSS, 2017), and therefore the biggest sector of the economy. This Sector provides 85% of manufacturing employment in Ghana. The Sector also contributes 70% to Ghana’s GDP. Start-Ups and SMEs make up 80% of the private sector and account for 92% of businesses in Ghana (Abor & Quartey2010; Abor & Biekpe, 2006). These reasons underscore the Importance of Start-Ups and SMEs to Ghana’s Economy and therefore we urge Government to go forward and take Euro Bond to finance Start-Ups and SMEs, and encourage Parliament to consider such a bill under a certificate of urgency if the Executive arm of Government brings it to Parliament because it is good for business and the economy.

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Impact of Eurobond on Start-Ups and SMEs for reducing Poverty and Mass Unemployment
There is Mass unemployment in the Country and the Public sector is only able to employ 14% of those who need jobs. The 86% of those needing employment fall on the informal sector of Start-Ups and SMEs. Start-Ups and SMEs have the greatest potential therefore to create jobs and reduce the mass youth employment in the Country, for which many Youth have set up their own businesses employing other youth. These Start-Ups and SMEs urgently need financing. But such adequate and patient capital is neither available nor accessible from the public or private sectors to support such Start-Ups and SMEs.
Government using euro bond, other sovereign and syndicated instruments or guarantees to secure adequate and patient Capital for the Start-Ups and SMEs is the only hope of the sector to secure finance and the surest way for the Youth of Ghana to get badly needed jobs. This is also good for the Government to prioritise the most important sector which will benefit majority of citizens and voters. There is the urgent need therefore for Government to prioritise direct financing for the sector in our annual national, supplementary and special budgets and initiatives.
This will reduce poverty, create wealth, ensure inclusive and shared growth for vulnerable and excluded population groups, reduce hardship and suffering of the people, enable equitable distribution of the National cake, provide social and transitional justice for all and achieve the Sustainable Development Goals(SDG) of ‘Leaving no one behind’. Therefore government should not be discouraged by those who argue that such debt will augment Ghana’s debt stock since this investment is good debt which will be applied to the potentially productive, profitable and sustainable sector of the economy.
Stay Government Institutions away from Management of Private Sector and Start-Up and SME Financing
Government needs to hand over the Management and Disbursement of such finances directly to the private sector which is more capable of handling such finances, instead of managing it through public sector institutions which have so far not handled existing financing opportunities to the benefit of private sector and Start-Ups and SMEs in particular. This is because Public sector does not run good business nor do they know how business is run. The Government has no business running business. The public and Civil service system of MDAs/MMDAs is not conducive to the running of business and therefore business is not their job. They only should provide the enabling legal, regulatory and policy environment and provision of stimulus packages such as this for business to thrive as engine of growth and they need to stick to that mandate and allow Private Sector to run the business and pay their taxes.
From Democratic Governance to Economic Governance in continum
For twenty-seven (27) years Ghana has established its democratic governance credentials, with three years more to the three decades which several experts believe is the period for democratic governance consolidation and maturity. In this period macroeconomics has been back and forth, but largely established. Micro economics affecting majority of citizens however has the greatest deficit in our National affairs. The Country is therefore in the Transition to launch into a period of Economic Governance consolidation as continuum of the democratic governance era, which it should use to

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stabilise its macroeconomics and incentivise microeconomic benefits for ordinary citizens. The Theory that stabilisation of macroeconomics is merely by balancing the budget by cost reduction is not entirely correct. Balancing the budget can also be achieved by spending if it is spent on really and potentially productive, profitable and sustainable sectors like the informal sector which though neglected has sustained the economy and retains the potential to take the economy to its growth trajectory.
No doubt the International Trade Centre (ITC) has recommended that for the development of the entire continent, at least 136 billion US dollars needs to be spent on Start-Ups and SMEs for releasing their growth potentials for the continent (ITC, 2018). This means for Ghana a minimum amount of 3 billion US dollars needs to be spent for Start-Ups and SMEs as a means for invigorating the economy to growth path of no return. Such a move requires a bold step on the part of government which if taken, will appear as initially increasing debt stock, but will eventually galvanise revenue generation in form of taxes and justify government’s move to widen the tax net to cover the informal sector because she has invested in the sector. Currently any government moves to tax the informal sector is taking the last lifeline of a sector on life support. Until the government stimulates the growth potential in Start-Ups and SMEs by investing substantial financing in the sector it is not justifiable to increase any taxes for the sector; any move to tax is not only exploitative but draconian and counter-productive to the strategic growth of the economy. It is estimated by ICMC Ghana that investing minimum of 3 billion US dollars in Start-Ups and SMEs will yield 3-5 times dividend in direct taxes over comparable period, 6 times benefits in jobs and increase export trade growth by 40% with foreign exchange reserve benefits of potentially 12 months for every 3 year period. This clearly is good debt stock, if incurred.

Nelson Godfried Agyemang
Founder, Start-Up SME Centres (SSC) Ghana Ltd;
CEO, Business Development Service Providers Association of Ghana (BDSPAG);
Rector, Institute of Certified Management Consultants (ICMC) Ghana
Accra-Ghana; Cell: +233241888167/+233206060139; Email: [email protected]

Global Context of Start-Ups and SMEs
Globally, 95% of businesses are Micro Small Medium Enterprises (MSMEs). About 60% of all private sector jobs are from small businesses. “The Private Sector drives job growth, accounting for 87% of total employment in 2016” (International Trade Centre (ITC)/UN,. 2018). 4/5 of new formal jobs in emerging markets are from MSMEs, as major job providers, catalysts for growth, and promoters of innovation, creativity and decent work for all. Start-Ups also account for up to 50% of all new jobs. Young entrepreneurs are more active in high-growth sectors, are more likely to hire other young employees and pay higher wages than ‘older’ firms. But globally over 66 million Youth are unemployed, and 145 million young workers live in poverty. A mismatch in skills means that many young people cannot secure jobs. Entrepreneurship therefore becomes imperative for providing self-employment to the entrepreneurs and other youth. However, Start-Ups and SMEs are neglected and not assisted to realize their potentials for alleviating poverty, creating jobs, livelihoods, incomes and decent work for many.

Africa Regional Context
SMEs make up 70-90% of African Economies,; contributes 70% of its GDP; SUPPLY ABOUT 80% OF ITS JOBS;CATER FOR THE LOWER END OF THE MAJORITY OF ITS POPULATIONAND HOLDS THE POTENTIAL FOR POVERTY REDUCTION,DEVELOPMENT OF African economies, and achievement of Sustainable Development Goals (SDG).But this sector is woefully neglected and undeveloped. Development of SMEs in Africa holds the key to a Continent at the verge of its historic and unprecedented development.