Ghana has for the first time in about 30 years, reclassified Micro, Small, and Medium-sized Enterprises (MSMEs) through a new regulatory instrument.
The Legislative Instrument (LI), known as the Ghana Enterprises Agency Classification of Micro, Small and Medium-sized Enterprises Regulation, 2023, LI 2470, is to streamline the classification of MSMEs in the country.
It is recognition of changing trends in the business landscape, and to help attract local and international investment, facilitate better data analysis for policies, and help in creating a more conducive environment for MSMEs to thrive.
The launch of the new regulation, which coincided with the commemoration of the 2024 International MSME Day, was done in Accra on Thursday, June 27, 2024.
The commemoration of the day was on the theme: ‘MSMEs and SDGs; leveraging the power and resilience of MSMEs to accelerate sustainable development and eradicate power in times of multiple crises’.
Per the new LI, micro enterprises are those with permanent emp
loyees from one to thirty persons, with a turnover of up to GHS150,000 or a fixed asset valued at the same amount.
An enterprise is a small business which has permanent employees between six and thirty persons, a turnover of more than GHS150,000 and up to GHS6 million, a fixed asset value up GHS6 million.
Medium enterprises are those with permanent employees between 31 and 100 persons, a turnover of more than GHS6m and up to GHS18m, a fixed asset valued at the same amount.
Meanwhile, enterprises that employ people exceeding 100, a turnover or fixed asset value exceeding GHS18m are also medium enterprises.
Speaking at the event, Mr Kobina Tahir Hammond, Minister of Trade and Industry, said the new classification was to address policy inconsistencies and tailor government and other development partner interventions to MSMEs.
He explained that the classification had been necessitated by economic expansion, population growth, and technological advancements.
He said the government was not oblivious to the ch
allenges confronting MSMEs, which constituted about 90 per cent of businesses, 80 per cent of workforce, and 70 per cent of the country’s Gross Domestic Product (GDP).
The Minister said the GEA had been repositioned to facilitate the needed financial assistance, provide capacity building, and market access, to enable MSMEs contribute more to the economy.
He lauded Ghanaian youth for their innovations in leading transformation in the MSMEs sector and their commitment to Ghana’s industrialisation agenda, adding that the government would continue to empower and support them to thrive.
Mrs Kosi Yankey-Ayeh, Chief Executive Officer (CEO), GEA, said, ‘for the past 30 years, the country has not redefined what an MSME is… we can’t push or design policy interventions, when we haven’t defined what an MSME is.’
The new classification, she said, was to give direction and create more space for SMSEs in the country to grow, enabling the Agency to also come up with new tools for its operations and supports to MSMEs.
Sh
e said MSMEs continued to play a major role towards sustainable development and poverty eradication, and ‘to see growth, we need to migrate businesses from micro to small, and small to medium.’
In an interview with the Ghana News Agency, Mr Seth Twum-Akwaboah, CEO, Association of Ghana Industries (AGI), said, the reclassification would help to clearly define MSMEs, and package the needed assistance to them.
It would also help know the appropriate taxes for the respective enterprises, therefore, engender tax compliance and enable the government gain more revenue to support development projects as well as the MSMEs.
He, however, called on the government to ensure that policies were targeted towards supporting MSMEs which constituted over 80 per cent of enterprises in the country, to make them grow sustainably.
Source: Ghana News Agency