Taking his turn at the vetting by the Appointments Committee of Parliament in Accra last Tuesday, Mr Kyerematen noted that the government would undertake a diagnostic study of the companies to ascertain the exact support needed to boost their operations.

“We will be working through existing institutions such as the National Board for Small-Scale Industries (NBSSI), GRATIS Foundation and Rural Enterprise Programme to do an institutional audit to determine whether those companies are capable of optimising the support they are calling for or they require some form of consolidation,” he said.

The minister-designate said the government would support new and existing companies with stimulus packages to be more competitive in order to penetrate the international market.

He opined that some existing companies just required marketing support, new technologies and additional investment capital in order to expand and create employment avenues.

He said the government would facilitate efforts by SMEs to access capital from financial institutions in order to expand their businesses, which would invariably create jobs for the teeming unemployed youth.

Mr Kyerematen indicated that the National Investment Bank (NIB) would be resourced to provide credit to companies, while the government would limit its borrowing from the financial institutions.

He further noted that the government would also reduce the Treasury Bill Rate, which would in turn reduce the willingness of financial institutions to lend to the government, but rather provide credit to the local businesses or entrepreneurs.

Strong SME sector

According to the ministerial nominee, a strong SME sector is important for the growth of every economy; advanced or developing.

However, in Ghana, more than 84 percent of all registered businesses fall in this category, with a similar proportion of the industrial sector making it into the category.

The definition of SMEs across countries and continents vary.

For instance, in Ghana, the NBSSI defines an SME as a company with a turnover of US$200,000 and above, but not beyond US$5 million.

The Venture Capital Trust Fund Act 2004, Act 680 also defines SMEs as an industry/project/undertaking or economic activity whose total asset base, excluding land and building, does not exceed the cedi equivalent of US$1 million.

In South Africa, the National Small Business Act (102 of 1996) has a wide definition for SMEs, varying from US$5 million turnover to US$30 million and employing about 200 people.

However, within the European Union (EU), it is US$43 million in asset and US$50 million turnovers.

The World Bank, on the other hand, is of the view that SMEs are those that have US$15 million in asset and US$15 million in turnover.

On the average, about 90 per cent of all businesses worldwide are SMEs, employing close to 70 per cent of the working population.

Government assurance

Mr Kyerematen noted that the sector was essential for several reasons, including creating jobs, supporting the agricultural and primary commodities sub-sectors and also generating foreign exchange for the economy, with a good chunk of the SMEs building up competitiveness and capacity to play in the global or regional marketplace.

“The call, therefore, is for Ghana to develop a strong SMEs sector to support the economic development process in ways that can make the country take advantage of opportunities emanating from its relationship with other nations,” he said.

The minister-designate assured that the government would promote domestic trade by improving the retail market and ensure effective compliance with the local content legislation.