Every year on June 27^th, we celebrate Micro, Small, and Medium-sized Enterprises (MSMEs) Day. A global recognition of the crucial role these enterprises play in our economies and communities. The theme for MSME Day 2024, "Leveraging the Power and Resilience of MSMEs to Accelerate Sustainable Development and Eradicate Poverty in Times of Multiple Crises," is a timely reminder of the significance of MSMEs in achieving sustainable development and addressing global challenges.

MSMEs are the backbone of economies worldwide. They account for over 90% of businesses and 60-70% of employment globally. In Ghana, MSMEs are predominantly driven by women and youth, who primarily operate within the informal economy. These MSMEs, who are often at the forefront of small-scale trade, agriculture and artisanal works bring a unique blend of resilience and innovation that contribute significantly to economic growth and employment. They account for about 85% of businesses and contribute around 70% of Ghana’s GDP. They are the backbone of our economy, driving inclusive growth and playing a pivotal role in reducing poverty. 

Resilience Amidst Crises

In recent years, MSMEs have faced unprecedented challenges. From the economic fallout of the global pandemics to the ongoing impacts of climate change and rising debt levels, these businesses have shown remarkable resilience.  The United Nations Development Programme (UNDP)-supported Ghana COVID-19 Business Tracker reveals that as of 2023, most Ghanaian businesses have successfully recovered from the impact of the pandemic.

However, to fully harness the potential of MSMEs, we must address the challenges they face. Many MSMEs operate in informal sectors, limiting their access to formal financial systems, government support, and international markets. Policies that promote their growth and formalization are essential for their success and, by extension, for the prosperity of our communities.

UNDP has been at the forefront of supporting youth and women led MSMEs in Ghana, playing a crucial role in their development and resilience, particularly during and after the challenges posed by the COVID-19 pandemic. UNDP Ghana, we remain committed to strengthening our support for MSMEs. We recognize their role in achieving the SDGs and eradicating poverty. Our initiatives focus on:

Access to Finance: We are working to improve access to affordable financing for MSMEs. This includes facilitating microloans, grants, and investment opportunities that empower entrepreneurs to scale their businesses. Example, UNDP Ghana in partnership with ABSA Ghana and EMPRETEC awarded grants of various amounts to MSMEs across the country. 

Technology and Innovation: We support the digital transformation and digital entrepreneurship of MSMEs, providing access to cutting-edge technologies and fostering innovation. For example, UNDP in partnership with Mastercard foundation launched an initiative to find atypical actors in the innovation space across the country. In addition, UNDP has undertaken multiple innovation challenges ranging from technology to waste recovery. 

Market Access: By connecting MSMEs to local, regional, and international markets, we help them expand their reach and grow their customer base. Our programs also focus on capacity building, ensuring that MSMEs can meet the standards and requirements of larger markets. The work we have done with the AfCFTA National Coordination Office (NCO), has created opportunities not just to learn key business practices but to also export under the guided-trade arrangements within the continent. A number of MSMEs have benefited from participating in the expeditions to Kenya and for the Intra-African Trade Fair in Egypt. 

Sustainable Practices: Promoting sustainable business practices is at the core of our efforts. We assist MSMEs in adopting environmentally friendly methods, reducing their carbon footprint, and contributing to climate action goals. 

Policy Advocacy: We advocate for policies that support the formalization and growth of MSMEs businesses. This includes improving regulatory frameworks, reducing barriers to entry, and creating an enabling environment for entrepreneurship. UNDP recently carried out a study on Non-Tarif Barriers (NTBs) and the effects to MSMEs. 

Empowering MSMEs to thrive requires a multifaceted approach. As we celebrate this year's MSMEs day, we must therefore support access to finance, including affordable loans and grants, to help MSMEs overcome financial barriers and invest in their growth. Providing access to technology, including digital tools and training, to enable MSMEs compete across borders. Promoting sustainable practices, such as environmentally friendly operations and social responsibility, ensures MSMEs contribute to a more sustainable future. By addressing these key areas, we can empower MSMEs to reach their full potential and drive economic growth, innovation, and job creation.