Professor William Baah-Boateng, an economist, has advised the Government to use “transformational entrepreneurship” to address the country’s growing unemployment challenge.
He explained transformational entrepreneurship to mean the setting up of an enterprise with the main goal of progressing from micro to small business by employing about 30 people, then to a medium enterprise that employed about 100 and then to large enterprise to engage more than 500 people.
He said that form of entrepreneurship was a holistic approach of creating a system that would drive socio-economic development in a sustainable manner and was the surest way of dealing with the growing unemployment challenge facing the country.
To that end, Prof.Baah-Boateng, Head of the Economics Department, University of Ghana, asked the government to target transformational entrepreneurs in the country and give them the necessary financial and technical support for them to thrive.
“So, the government should identify people who have the business acumen, take them through training and give them something that is enough, within GH¢100,000 to GH¢500,000 and give them all the support including tax holidays,” he said.
He said, “Over the years, our entrepreneurial strategy has been to provide meagre amount to a number of young people, which does not take them anywhere. Implementation of YouStart as entrepreneurship drive risks of failing if it goes along the same lines as has been in the past.”
“For example, it is reported in the budget that Ghana Enterprise Agency provided 302,001 successful applicants with loans amounting to GHC523.11 million under the Coronavirus Alleviation Programme Business Support Scheme (CAP-BuSS). This yields an average of GHC1, 732 per applicant which cannot translate into transformational entrepreneurship and decent employment,” he noted.
On business operations, Prof.Baah-Boateng, bemoaned how the regulatory framework in the country was hostile towards businesses and referred to the hospitality industry, which he said, was saddled with too many fees and charges.
This, include one per cent of net turnover (after value added tax, VAT) and regular renewal of operating licence by local assembly, payment of property rate and signage, Environmental Protection Agency (EPA) licence, and fire service licensing.
He also cited the Ghana Revenue Authority (GRA) profit tax, cumbersome filing of returns, and unlawful harassment by regulatory officials, which were inhibiting growth of industries.
Prof.Baah-Boateng, therefore, urged the government to take a careful look at the numerous taxes imposed on businesses by different regulatory bodies, especially District Assemblies and GRA.
He said it was also important for the government to consolidate the country’s macroeconomic stability, “so that the exchange will not depreciate so rapidly, inflation will be at a moderate level that will bring down the lending rate.”
The seventh round of the Living Standards Survey (2019) has pegged the country’s unemployment rate for the population aged 15-35 years at 12.6 per cent, a situation that the World Bank had said remained a major setback to economic growth.
The government has stated its commitment to addressing the country’s unemployment challenge through interventions such as the GHC100 billion Ghana COVID-19 Alleviation and Revitalisation of Enterprise Support (Ghana CARES) programme and the GHC10 billion YouStart entrepreneurship drive.