Rural small scale industries .and district level development: the case of Mpohor Wassa East District

Ghana’s population, like any other developing country, is growing fast (2.6 per cent per annum). Since the majority of the population is living in the rural area, the absolute population increase comes from the rural areas. The agricultural sector, which is the predominant economic activity, cannot grow as fast as the population and, hence, cannot provide enough employment and income to the growing population. The net result of this imbalance between the growth of population and agriculture has been rapid migration to urban areas which, in turn, results in high unemployment and deterioration of living standards in the urban areas. Traditionally, rural small scale industries provide employment, income and basic needs for the rural population. However, this sector cannot satisfy the ever increasing demand in terms of employment opportunities, income and basic needs. This is due to the low level of development of the rural small scale industries. To tackle problems such as unemployment, migration and to increase the productivity of the agricultural sector the promotion of small scale industries in the rural areas is essential. This study sought to find out the existing situation (that is the potentials and problems) of the small scale industries in Mohor Wassa East district and to propose a strategy to promote these industries. The study was made possible through collection and ananysis of primary 3and secondary data. Aspects of the study included the following: i) general characteristics of existing small scale industries in the district in terms of their average size, duration of working period, pattern of ownership and the linkages with other sectors of the economy; ii) the operational conditions and problems of small scale industries in the district, which includes aspects of marketing, finance, raw material, skill and organization. The main problems identified include the following: i) marketing: low demand and delay of payment by customers and low price for commodity. ii) Finance: lack of credit from banks, lack of collateral and high interest rates charged by money lenders. iii) Raw material supply: scarcity, high cost, lack of finance and difficulties in transportation. iv) Skill: lack of training facilities and lack of awareness about the need to upgrade skill. v) Organization: lack of individual as well as group organization. Against this background, the integrated rural development approach which seeks to promote rural small scale industries within a wider framework of rural development is proposed. The main issues covered include: i) strengthening of the provision of essential services such as credit, training, infrastructure through community development centres and rural industrial centres and organization of small scale industries into co-operatives; ii) strengthening sectoral linkages through promotion of industries which will strengthen the forward and backward linkages at the district level; iii) strengthening institutional functions at the district level through coordination of activities of various institutions concerned with the development of small scale industries in the district. The strategy is based on the district’s resource potential and emphasises strengthening the linkages between the various sectors of the district’s economy. It is modelled within the framework of the overall development of the district’s economy.

Source: KNUST