World Bank has allocated US$ 45 million to Ghana in support of Micro, Small and Medium Enterprises but the government has not made use of the money. Fred Sarpong looks at the fund and what intended to achieved.
The World Bank country office in Accra has come out to say that the international bank has allocated an amount of US$ 45 million to Ghana Government in support of the Micro, Small and Medium Enterprises (MSMEs) sector in the country.
According to the bank office since 2000 that the money was given to Ghana only US$ 4 million has been spent within two and a half year period.
The fund, which was channel through International Development Association (IDA), is available but the government has refused to access it to support MSMEs in the country. It therefore, called on the government to make use of the money before it starts reviewing it programme for the country come November 2008.
If what the bank is saying is true then those in the sector may think the government did not do well to support them. This MSMEs sector or those in the informal sector constitute majority of businesses in the country.
One of the sectors we believe they need capital to develop their businesses is the MSME sector, which most of the traders in this category can be described as low income earners. In fact given them additional funds will really help them to increase their business capital and also create expansion environment for them.
Sources at World Bank office said that the fund aims to enhance the competitive and employment levels of Ghanaians MSMEs.
The objective of the fund was to developing and strengthening the capacity of local intermediaries to deliver financial and non-financial services to MSMEs; reducing selected business constraints faced by MSMEs and; promoting local entrepreneurship.
Also include streamlining the trade facilitation infrastructure; providing an enabling environment that leads to increased investments in the MSME sector and; building the Government capacity to generate, implement, monitor and evaluate private sector and trade development programs and projects. The project name under the fund dubbed MSME project.
The project description is in support of the Government’s Private Sector Development Strategy, Trade Sector Support Program, the Poverty Reduction Strategy Program, and the World Bank Group Country Assistance Strategy.
It comprises the following components, access to financial component; access to markets, trade facilitation, and entrepreneurship development component; business environment component and; project implementation, monitoring and evaluation component.
The access to financial component aims to significantly improve Small and Medium Enterprise (SME) particularly term finance, thereby fostering SME growth, competitiveness and employment creation.
The component, designed to achieve this objective through a multi-pronged approach that will address key bottlenecks to SME financing, comprises five sub-components: an IDA International Finance Corporation (IFC) SME loan portfolio Partial Credit Guarantee Program (PCG); an IDA-funded Performance Based Grant Program for banks participating in the Line of Credit (LOC) facility to be financed by IFC; technical assistance matching-grants for SME finance capacity building in PCG and LOC participating banks, and to the extent possible to other local banks; technical assistance matching grants for existing and potential SME clients of PCG and LOC participating banks; and technical assistance and matching grants for the development of additional financial institutions to SME.
Access to markets, trade facilitation, and entrepreneurship development component will help MSMEs overcome operational, technical, and regulatory barriers to markets. Project support will focus on the development of a market of non-financial services to MSMEs through building sustainable delivery capacities for local service providers and other private sector and trade development support structures.
The assistance to be provided will respond to needs assessments in selected value chain clusters, business membership organizations, and specialized business service providers. The project will also support the implementation of a business linkages fund established to facilitate sub-contracting between larger and smaller enterprises, informal and formal ones.
The approach will be piloted in the construction sector and extended to other sectors. In addition, building on achievements under the Gateway Project, project activities will reinforce the trade facilitation and investment promotion objectives of the Government. Project resources will finance the development of the markets access and trade facilitation infrastructure as well as it will support new approaches to trade promotion as a response to globalization.
Finally, this project component will support specific strategic and catalytic interventions of the Government in the framework of its entrepreneurship development strategy. In this vein, the credit will support the transformation of the Tema Export Processing Zone (EPZ) enclave into a Multi-Purpose Industrial Park (MPIP) with an information and communications technology (ICT) park, a furniture city and common service centers for selected branches of manufacturing activities.
Activities under the business environment component will support the National Medium Term Private Sector Development Strategy (PSDS) and will team up efforts with other development partners to ensure the implementation of the program in the holistic and effective way.
While providing support through the fund pooling mechanism, the IDA funds will support the implementation of the Ghana trade policy; reform the business registration; improve the national system of standardization, certification, and accreditation of conformity assessment by encouraging broader private sector participation and by updating and enforcing regulations in this area; and build the institutional capacity of the Government Ministries, Departments and Agencies (MDAs) to effectively deliver services to the private sector and strengthen public-private dialogue.
Project implementation, monitoring and evaluation component is designed to support the execution, reporting, review, and monitoring requirements of the project. Provisions will be made to test out models proposed to assist MSMEs; enable the Government to design and implement a comprehensive project performance framework; and assist the Government, primarily the Ministry of Trade, Industry-Private Sector Development and Presidential Special Initiative, and the Ministry of Communications to coordinate project activities and carry out the objectives of the project components as provided in a project implementation manual.
It is also designed to facilitate the partnership between the government and the private sector to better ensure ownership and sustainability of reforms; and enable the government to maximize assistance received from its development partners on initiatives addressing similar constraints as the MSME Project by harmonizing implementation and pool funding arrangements. The proposed project by the World Bank supposes to be implemented nationally if the government accesses the fund.
The World Bank country office in Accra has come out to say that the international bank has allocated an amount of US$ 45 million to Ghana Government in support of the Micro, Small and Medium Enterprises (MSMEs) sector in the country.
According to the bank office since 2000 that the money was given to Ghana only US$ 4 million has been spent within two and a half year period.
The fund, which was channel through International Development Association (IDA), is available but the government has refused to access it to support MSMEs in the country. It therefore, called on the government to make use of the money before it starts reviewing it programme for the country come November 2008.
If what the bank is saying is true then those in the sector may think the government did not do well to support them. This MSMEs sector or those in the informal sector constitute majority of businesses in the country.
One of the sectors we believe they need capital to develop their businesses is the MSME sector, which most of the traders in this category can be described as low income earners. In fact given them additional funds will really help them to increase their business capital and also create expansion environment for them.
Sources at World Bank office said that the fund aims to enhance the competitive and employment levels of Ghanaians MSMEs.
The objective of the fund was to developing and strengthening the capacity of local intermediaries to deliver financial and non-financial services to MSMEs; reducing selected business constraints faced by MSMEs and; promoting local entrepreneurship.
Also include streamlining the trade facilitation infrastructure; providing an enabling environment that leads to increased investments in the MSME sector and; building the Government capacity to generate, implement, monitor and evaluate private sector and trade development programs and projects. The project name under the fund dubbed MSME project.
The project description is in support of the Government’s Private Sector Development Strategy, Trade Sector Support Program, the Poverty Reduction Strategy Program, and the World Bank Group Country Assistance Strategy.
It comprises the following components, access to financial component; access to markets, trade facilitation, and entrepreneurship development component; business environment component and; project implementation, monitoring and evaluation component.
The access to financial component aims to significantly improve Small and Medium Enterprise (SME) particularly term finance, thereby fostering SME growth, competitiveness and employment creation.
The component, designed to achieve this objective through a multi-pronged approach that will address key bottlenecks to SME financing, comprises five sub-components: an IDA International Finance Corporation (IFC) SME loan portfolio Partial Credit Guarantee Program (PCG); an IDA-funded Performance Based Grant Program for banks participating in the Line of Credit (LOC) facility to be financed by IFC; technical assistance matching-grants for SME finance capacity building in PCG and LOC participating banks, and to the extent possible to other local banks; technical assistance matching grants for existing and potential SME clients of PCG and LOC participating banks; and technical assistance and matching grants for the development of additional financial institutions to SME.
Access to markets, trade facilitation, and entrepreneurship development component will help MSMEs overcome operational, technical, and regulatory barriers to markets. Project support will focus on the development of a market of non-financial services to MSMEs through building sustainable delivery capacities for local service providers and other private sector and trade development support structures.
The assistance to be provided will respond to needs assessments in selected value chain clusters, business membership organizations, and specialized business service providers. The project will also support the implementation of a business linkages fund established to facilitate sub-contracting between larger and smaller enterprises, informal and formal ones.
The approach will be piloted in the construction sector and extended to other sectors. In addition, building on achievements under the Gateway Project, project activities will reinforce the trade facilitation and investment promotion objectives of the Government. Project resources will finance the development of the markets access and trade facilitation infrastructure as well as it will support new approaches to trade promotion as a response to globalization.
Finally, this project component will support specific strategic and catalytic interventions of the Government in the framework of its entrepreneurship development strategy. In this vein, the credit will support the transformation of the Tema Export Processing Zone (EPZ) enclave into a Multi-Purpose Industrial Park (MPIP) with an information and communications technology (ICT) park, a furniture city and common service centers for selected branches of manufacturing activities.
Activities under the business environment component will support the National Medium Term Private Sector Development Strategy (PSDS) and will team up efforts with other development partners to ensure the implementation of the program in the holistic and effective way.
While providing support through the fund pooling mechanism, the IDA funds will support the implementation of the Ghana trade policy; reform the business registration; improve the national system of standardization, certification, and accreditation of conformity assessment by encouraging broader private sector participation and by updating and enforcing regulations in this area; and build the institutional capacity of the Government Ministries, Departments and Agencies (MDAs) to effectively deliver services to the private sector and strengthen public-private dialogue.
Project implementation, monitoring and evaluation component is designed to support the execution, reporting, review, and monitoring requirements of the project. Provisions will be made to test out models proposed to assist MSMEs; enable the Government to design and implement a comprehensive project performance framework; and assist the Government, primarily the Ministry of Trade, Industry-Private Sector Development and Presidential Special Initiative, and the Ministry of Communications to coordinate project activities and carry out the objectives of the project components as provided in a project implementation manual.
It is also designed to facilitate the partnership between the government and the private sector to better ensure ownership and sustainability of reforms; and enable the government to maximize assistance received from its development partners on initiatives addressing similar constraints as the MSME Project by harmonizing implementation and pool funding arrangements. The proposed project by the World Bank supposes to be implemented nationally if the government accesses the fund.
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