High regulatory fees killing SMEs

Story: Boahene Asamoah, Tema


THE lack of finance has been cited as a major constraint to the expansion of many small and medium-scale enterprises (SMEs) in Tema.
High fees charged by regulatory bodies such as the Food and Drugs Board (FDB) and the Ghana Standards Board (GSB) are also a hindrance to the growth and prospects of SMEs in the country.
This came up during a tour by the Ghana Journalists Association (GJA) and the National Board for Small-Scale Enterprises (NBSSI) to give a cross-section of journalists first hand information on the operations of some SMEs in Tema.
The programme was under the GJA/Business Sector Advocacy Challenge Fund (BUSAC) programme which is aimed at creating a conducive environment for businesses to operate.
The tour also brought to the fore the high cost of doing business in the country, which was another major challenge, especially for the SMEs.
At Gomashed Company Limited, producers of alcoholic and non-alcoholic beverages, the proprietor, Mr I. B. K. Tawiah, said one of the constraints his company faced was the huge cost of licensing its products at the Ghana Standards Board.
He said he needed about ¢4 million to register the products, which he said, was too expensive for a small business like his.
Apart from that he said the usual constraint of financial resources to expand the business was equally taking a huge toll on his business.
He said he produced about 20 cartons of both alcoholic and non-alcoholic beverages per month, adding that demand for the his vermouth wine was high but the funds to support the expansion of the business was not available.
At Bersama Enterprise, producers of ointments, the Managing Director, Mr Bernard Sekyiama, said he needed ¢7 million to register his product with the Food and Drugs Board (FDB) which he said was too much.
He said high fees charged by regulatory bodies such as the FDB was a hindrance to the growth and prospects of SMEs in the country and called on the authorities to give SMEs some exceptions.
Mr Sakyiama said because of his inability to register his product, he could not undertake any effective marketing.
At David Tagoe Enterprise, producers of Bottled Palm Wine and Nmedan, the proprietor, Mr David Tagoe, said the major problem facing the company was transportation cost.
That, he said, made the cost of distribution too high and therefore the product very expensive.
He also said another constraint was the lack of working capital for expanding the business.
During the tour, it was observed that most of the enterprises were family-owned and employed an average of about five people.
Journalists also had the opportunity to visit Adjemens Enterprise, producers of sachet water, Dua Ma Eduro, a traditional herbal producer, Sam Soap Industry, a soap manufacturing enterprise, Devyx Textiles, woven fabric enterprise, Ashiaman Metal Fabrication, a metal fabrication enterprise and Special Touch Foods, where the journalists were treated to good Ghanaian and continental dishes to round up the day’s activities.