President Nana Addo Dankwa Akufo-Addo has launched a US$10-million grant to support small and medium-scale enterprises (SMEs) in the tourism, hospitality and creative arts industry, with about 60 per cent of the amount expected to go to female-owned enterprises.
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The amount forms part of the Ghana Tourism Development Programme which began in 2018 and is meant to provide financial and technical assistance for the development of the leisure tourism sector.
The grant is therefore, expected to assist operators in the sector to modernize and improve their facilities, including the sites. About 1,500 SMEs are expected to benefit from the grant being provided by the World Bank.
Two things very important with regard to the grant are making SMEs into tourism vibrant and giving female-owned enterprises 60 percent of the amount.
SMEs are privately-owned and so they most of the time lack enough capital to operate at full capacity to be able to offer the expected goods and services and also create the number of jobs that would help reduce unemployment in the country.
Whereas in the European Union (EU), a small-sized enterprise is defined as a company with fewer than 50 employees and a medium-sized one as operating with less than 250 employees. Without mentioning how much capital they need, in Ghana, the Venture Capital Fund Act 2004 (Act 680) characterizes an SME as an industry, project, undertaking or economic activity which employs not more than 100 people and whose total asset base, excluding land and building, does not exceed the cedi equivalent of $1 million in value.
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This is seen as a very good move on the part of the government to seek assistance for these private enterprises, considering the fact that it is very difficult for many SMEs in the country to get credit from financial institutions because they do not meet the collateral requirements.
Small and medium-size enterprises are critical to every economy as they outnumber large firms, both public and private, and employ a huge number of people, thereby reducing the stress on the state to provide jobs for the citizenry.
