A new report, commissioned by the Tema branch of the Ghana Chamber of Commerce and Industry on why Small and Medium sized Enterprises (SMEs) in the host town of Ghana’s biggest sea port and industrial enclave are having difficulties in thriving to their full potentials, has been released.
The report was sponsored by Vanguard Assurance, GLICO Group and J in G Insurance Brokers & Management Consultants, the latter a leading financial and management consultancy headed by Dr Gideon Amenyedor, an accomplished insurance practitioner who is the Chairman of the Tema branch of the Chamber.
The underlying research and actual preparation of the report and its findings were contracted out to Dr Albert Gemegah, a former head of the Insurance Department of the University of Ghana, Legon who is now the Head of and a lecturer at the Graduate Business School at the Winsconsin University in Accra.
The report is a timely and direly needed effort to identify the potentials and challenges that SMEs in Tema are facing, in order to provide the foundation for improvements in their operational environment and framework.
The report is upbeat about the potential for businesses in the port and industrial town.
Notes the report: “Tema is a bustling industrial city located in the Greater Accra Region, is home to a diverse range of SMEs that span various sectors, including manufacturing, retail, services and agriculture. The strategic location of Tema provide the SMEs with unique opportunities.”
These include proximity to Ghana’s largest and busiest sea port, which facilitates their international trade businesses as well as access to good road networks through which they can reach all the other parts of the country for their production inputs and their markets with the goods and services they produce.
Tema hosts several large companies, industrial facilities and logistics firms creating a rich ecosystem that SMEs can benefit from.
This business clustering promotes collaboration, knowledge sharing and supply chain integration – often coordinated deliberately by the local branch of the chamber of commerce – enhancing growth opportunities for SMEs domiciled in the town.
The vibrancy of Tema’s business and industrial sector ensures that there is a large pool of skilled labour for SMEs to use with expertise in logistics, manufacturing and trade.
Furthermore the town’s status as an industrial hub ensures the regular, adequate supply of public utilities such as electricity and water, coupled with internet connectivity.
However the report, in line with its contractual mandate, also identifies crucial challenges that SMEs in Tema are confronted with and which serve as constraints to their business performance, growth and commercial success.
A key challenge is the relatively high cost of running a business in Tema. The cost of renting or purchasing business space in particular, in Tema, can be prohibitive for SMEs. Operating in a competitive industrial zone often means paying more for property, utilities and services, which can constrain growth compared with that for SMEs in more affordable areas.
Furthermore the intensely competitive business environment in Tema makes competition for customers, suppliers and skilled labour very intense and therefore costly too.
The report, which lists a plethora of other business operating constraints facing SMEs in Tema that are peculiar to the town because of its socio-economic status and position, provides an insight into the challenges confronting relatively small businesses, which policy makers, business regulators, business support service providers and business associations – led by the Tema branch of the Ghana National Chamber of Commerce and Industry which commissioned the report in the first place – can use to devise solutions that SMEs in the town and its vicinity can leverage on to thrive, expand and achieve better business performance for all of their stakeholders.
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