This encompasses the provision of products and services to foreign clients, thereby contributing to the overall export performance of the country.
Over the years, several programmes have been developed to support SMEs, but much as these programmes have benefited entrepreneurs in this sector, adequate support structures have not been put in place to help sustain those programmes.
It must however be noted that economists are gradually recognizing the importance of SMEs in the country’s development.
SMEs are often viewed as playing a critical role in encouraging entrepreneurship, generating employment and reducing poverty.
According to the World Bank, in high-income countries about 57 percent of employment and 51 percent of GDP are generated from the SME sector. While in a low-income country, only 16 percent and 18 percent respectively are generated by SMEs.
A World Bank report in 2000 that explored the importance of SMEs in developing countries also noted that “Smaller businesses are the foundation of the emerging private sector in developing countries and governments should help them to survive and thrive.”
Most SMEs are mostly engaged in retailing, trading, and manufacturing. Retailing is mostly found in urban regions while manufacturing can be found in either rural or urban centres.
The automotive spare parts industry in the country is a major one and can be found in the retailing category.
In the past few years, the industry has expanded enormously and created jobs at the same time. Entrepreneurs in this vast industry deal in spare parts components such as batteries and engines, among others.
Like other SMEs in Ghana who face several social and economic barriers that hamper their growth, entrepreneurs in the spare parts industry face many challenges.
Clement Boateng aka Caboat, Spokesman for the Abossey Okai Spare Parts Dealers Association, said the industry was very lucrative, but recent happenings like the fast depreciation of the cedi against major currencies like the dollar had affected the members.
He explained that Ghana does not manufacture spare parts, hence they have to be imported from Western and Asian countries.
“As a result, if the dollar rates keep increasing then the cost of clearing the goods also rises, and this is passed on to the customers,” he stressed.
“And if our customers cannot afford the products, they (the spare parts dealers) end up making loses.
Mr. Boateng, who is also the Director of Caboat Agency, dealers in general vehicular parts, said apart from the constant appreciation of the dollar against the cedi, another challenge they face is the high charges and import duties they pay at the ports.
“The rates and charges we pay at the port is very worrying.” He produced a receipt of charges of a container of spare parts that had been cleared at the port.
The cost of import duty was GH ¢1,431.08 and included other charges such as import special tax, Import Vat, ECOWAS levy, Network charges, Import NHIL among others. And all these totaled GH ¢4,350.07.
He said these exorbitant charges are really affecting the industry and stressed that if this is not checked it could easily collapse the industry, which is serving as a hub for all kinds of spare part products in the country.
He appealed to the government to take a look at these charges and review them downwards. “If not many of us in the spare parts industry may have to quite.”
Another problem, he stated, was the issue of ‘goro boys’ who have invaded the Abossey Okai Spare parts market.
He said the ‘goro boys’ pretend to be spare-parts dealers and sell fake products to unsuspecting customers.
He therefore cautioned customers to desist from buying from these boys because if there’s a defect in the product, they may not be able to locate them, explaining that ‘goro boys’ are not members of the association and they move from one location to the other.
The Abossey Okai Spare Parts Dealers Association is the umbrella Association, which includes the Japan Importers Association and Table Top Users Association.
According to Mr. Boateng, all these groups are represented on the main association, and added that the Abossey Okai market accommodates over 3,000 shops.
Mr. Boateng said the association is very vibrant and would continue to project the interests of its members.
He entreated government to support SMEs in various sectors.
“By doing this, entrepreneurs will be encouraged to explore other business opportunities, thereby improving the economic development of the nation.”
Earlier this year, Daniel Aggrey, the Second Vice President of the Ghana Union of Traders Association (GUTA) stated that the cost of doing business in the country was increasingly becoming high.
He attributed this to the “high taxes, levies, cumbersome processes and procedures of clearing cargo, unnecessary charges, theft among others, which according to him, do not augur well for the growth and development of the private sector which has been touted as the engine of growth of the country.
At a forum organized by Ghana Shippers’ Authority (GSA), Mr. Aggrey said if port officials do not desist from such acts, the country would loose a lot in terms of business image and revenue generation.
He reiterated that as a result of the problems encountered at the ports, neighbouring landlocked countries such as Burkina Faso, Mali and Niger who heavily patronize Ghana’s ports were loosing interest in the country’s ports.
He also cautioned that “we should not loose sight of the fact that our neighbouring countries like Togo, Benin and Cote d’Ivoire whose clearing systems seem better than ours may easily overtake us.”
State agencies and private organizations who owe it a duty to develop the sector must come out with sustainable programmes.
By Esther Awuah
