Despite government initiatives to support entrepreneurship and innovation in Ghana, entrepreneurs are not taking advantage of the offerings, a study finds.
A recent research study by Oxford University considered the impact of government schemes in Ghana aimed at encouraging business innovation and entrepreneurship, but found that most business owners do not know about the schemes.
The Ghanaian government’s Micro, Small and Medium Enterprise (MSME) Project is backed by millions of dollars, and aims to provide firms with access to finance and help with trade promotion and technical support.
The Venture Capital Trust Fund also offers low cost financing and technical assistance to investors and entrepreneurs in Ghana.
However, of the 500 Ghanaian companies surveyed for the study, only four per cent said they were aware of any government initiatives aimed at encouraging innovation.
Only 23 respondent companies said they had taken advantage of the lower interest rate loans on offer under the government’s schemes between 2010 and 2013. Many said the administrative process for applying for the loans – specifically the amount of paperwork required – is off-putting.
One fifth of the companies surveyed said they participated in skills training on offer by the government.
According to study leader Professor Xiaolan Fu, action should be taken to encourage entrepreneurs to seize upon government incentives, as this could facilitate innovation and spur economic growth.
“Technological innovation has been traditionally concentrated in a few developed countries. Yet it is vital that African countries seize on innovation as a way forward. Innovation is not just an outcome of development but is a means for development. Our study suggests a need for better communication to light the spark so firms wanting to innovate apply for government support. This would benefit individual businesses but also Ghana’s overall economy,” said Fu.
The companies surveyed reported key barriers to innovation as workers lacking the specific skills and training needed to use new technologies; economic cost, as well as lack of access to credit.
Survey participants said lower interest loans and government subsidies are the incentives that would have the biggest impact in terms of encouraging companies to innovate; while participants also identified lower corporate taxes and more government funding as desirable forms of support.