US$200m Boost For SMEs | Business News

Finance Minister Dr. Mohammed Amin Adam has signed a strategic Memorandum of Understanding (MOU) with the ECOWAS Bank for Investment and Development (EBID), in a move aimed at empowering small businesses and driving economic growth.

The agreement – signed on May 10, 2024, at the end of a one-day working visit to Lomé, the capital of Togo – unlocks a stream of US$200million in funding for small and medium enterprises (SMEs) via concessional lending by Ghana Exim Bank (GEXIM) and the Ghana Commercial Bank (GCB).

“This partnership with EBID marks a significant step toward driving sustainable economic growth and fostering resilience within our SME sector. The commitment of US$200million underscores our dedication to empowering SMEs, creating jobs and catalysing innovation for long-term economic prosperity,” Dr. Amin Adam said during the event.

While it is widely accepted that small and medium-sized enterprises (SMEs) are the lifeblood of economies, serving as engines of innovation, economic growth and job creation, they need help securing adequate financing.

By the end of 2021, there were approximately 332.99 million SMEs worldwide; constituting over 90 percent of businesses and accounting for more than 50 percent of global employment.

Globally, SMEs contribute significantly to economic vitality. They represent 50 percent of the global Gross Domestic Product (GDP) and employ 60 percent of the private sector workforce. The impact of SMEs extends to all corners of the globe, fuelling economic growth and fostering resilience.

Domestically, there are approximately 850,000 SMEs – representing about 90 percent of businesses and contributing to more than 80 percent of employment. The economic contribution of SMEs in the country is particularly notable, constituting around 70 percent of the country’s GDP and 80 percent of private sector employment. Women-led SMEs play a significant role in Ghana’s business landscape, accounting for an estimated 43 percent of all SMEs.

Despite their undeniable impact, SMEs in Ghana face a significant credit gap with an estimated US$2.4billion in unmet financing needs.

The concessional loans are expected to boost growth, create jobs and inject foreign exchange into the local economy. They also align with the country’s broader agenda of fostering entrepreneurship and achieving sustainable development.

President and Chairman-Board of Directors, EBID, Dr. George Agyekum Donkor stressed the importance of regional collaboration in driving economic development.

“EBID is proud to partner with Ghana in this transformative initiative. This injection of funds will not only bolster the SME landscape but also contribute to overall economic growth and development in the region,” he explained.

Present at the ceremony were Chief Executive Officer-Ghana Exim Bank, Lawrence Agyinsam and Executive Director-Wholesale and Investment Banking, GCB Bank PLC., Samuel Aidoo.

They all agreed that the arrangement between Ghana and EBID sets a precedent for impactful collaboration within the Economic Community of West African States (ECOWAS), as partnership signals a collective commitment to fostering private sector growth as a key driver of sustainable development and shared prosperity across the region.