Project Notice |
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| PNR | 474 |
| Project Name | Sustainable economic development |
| Project Detail | Ghana’s economic development since the mid-1990s has been one of the greatest success stories in sub-Saharan Africa. Economic growth reached 13.6 per cent in 2011, and from 2012 the economy will gain the added stimulation of oil production. The poverty rate has been falling continuously, and amounted to just 28.5 per cent of the population in 2007. The World Bank has now categorised Ghana as a lower middle income country. Nevertheless, the small and medium-sized enterprise segment is expanding only slowly. Entrepreneurship is hampered by inadequate infrastructure and time-consuming administrative processes. This is compounded by the low levels of vocational education and labour productivity. A particular problem is the limited access to loans and insurance schemes tailored to the needs of small enterprises. Objective Access has improved to microfinance services that meet the needs of small-scale businesses. Micro, small and medium-sized enterprises are able to employ a larger number of people. Approach The programme operates at the interface between the public and private sectors and financial industry. It is supporting improved donor coordination and also contributes to the basket fund for the implementation of Ghana’s Private Sector Development Strategy. The programme consists of four components. Banking supervision, financial education and consumer protection Strengthening the microfinance is not just a question of reforming the legal framework and the supervision of banks; it is also important to pursue consumer protection on behalf of small-scale entrepreneurs and low-income workers, to introduce courses in basic financial education, and to improve the range of products offered by the banks. Micro-insurance The programme uses information campaigns to educate small enterprises and low-income households about the costs, benefits and risks of insurance schemes. It is advising the National Insurance Commission on the revision of legislation, while also supporting private insurers with the development of needs-oriented insurance products. The programme also promotes networking between local insurers and more experienced international insurance firms. In doing so it is cooperating with the initiatives ‘Making Finance Work for Africa’ and the ‘Access to Insurance Initiative’. Industrial zone development The programme is supporting local administrations and business associations in the development of 15 light industrial areas. With co-financing through Dutch development cooperation, it is assisting with the planning processes for these zones, as well as their electrification. Meanwhile, small-scale enterprises, such as car maintenance workshops, carpentry businesses and agro-processing companies, are benefiting from courses to learn about environmental management, workplace health and safety, and business management. Vocational education initiative In collaboration with the Council for Technical and Vocational Education and Training, the programme is raising the standard of vocational education and improving the management of the vocational training system. This process involves support for business and professional associations to help them identify training needs and develop appropriate courses for instructors, specialists and trainees. The programme encourages the participation of women in courses for occupations traditionally reserved for men. In cooperation with KfW Entwicklungsbank, it is also helping to develop innovative financing mechanisms in the field of vocational education. Exchanges of experience with German private sector organisations also form a significant part of the programme’s work. Results achieved so far The programme has made important contributions to private sector development. For example, the administrative procedures involved in starting a business or in cross-border trade have been substantially simplified. As part of its efforts to promote dialogue between the Ghanaian Government and the private sector at national, regional and local levels, the programme provided technical advice to Ghana’s largest business association as it carried out surveys of the investment climate. This resulted in a range of policy recommendations on strengthening small and medium-sized enterprises. The programme has developed tailor-made mentoring and training programmes for microfinance institutions as well as financial education materials suitable for illiterate target groups. A large number of people around the country have received their first ever basic education in financial matters at road shows organised in cooperation with 110 microfinance institutions. At the same time, these institutions have improved their customer service and the quality of their financial products. This in turn has helped them attract more customers and significantly increase the level of the savings deposits. The experience gained has been presented at international conferences. In the course of the programme, a draft law on the private insurance sector has been drawn up which is in line with international guidelines on insurance supervision. To date, some 622 businesses employing more than 2,000 workers have relocated to the new industrial zones. This has enabled 199 enterprises to access electricity for the first time. Nearby households are also benefiting from the power supply. The proportion of women among the entrepreneurs in the industrial zones has increased from five to ten percent. The businesses are achieving greater profits because they use modern machinery, incur lower infrastructure costs and make more efficient use of raw materials. Together with Danish development cooperation, the programme has given support to a refinancing facility for rural banks. This fund enables small banks in the country to expand their business and introduce new products. As a result, more than 18,000 small and medium-sized enterprises have now received microcredits. |
| Funded By | Other Funding Agencies |
| Sector | Other Industries |
| Country | Ghana , Western Africa |
| Project Value | Plz Refer Document |
Contact Information |
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| Company Name | German Federal Ministry for Economic Cooperation and Development (BMZ) |
| Address | Postfach 12 03 22, 53045 Bonn, Germany, Tel: +49 / 228 / 9 95 35-0, Fax: +49 / 228 / 9 95 35-35 00. |
| Web Site | http://www.bmz.de/ |
