Small and Medium Scale Enterprises and Growth of Towns in Rural Ghana: The Case of Asutifi District in the Brong Ahafo Region

This study presents the relevance and emergence of Small and Medium Scale Enterprises and the Growth of Towns in Rural Ghana. It discusses the characteristics, contributions of SMEs to the growth of towns and development, and the obstacles to SME development in Ghana with particular reference to Asutifi District. SMEs in Ghana have been noted to provide about eighty-five percent (85) of manufacturing employment of Ghana. They are believed to contribute about seventy percent (70) to Ghana‟s GDP and account for about ninety-two per cent (92) of businesses in Ghana. SMEs development is largely constrained by a number of factors, such as lack of access to appropriate technology; limited access to international markets, inadequate regulations and rules; weak institutional capacity, lack of management skills and training, and insufficient finance. In spite of these obstacles, the SME sector continues to thrive in both rural and urban centres in Ghana. Across the Asutifi District, population growth, combined with in-migration from rural to urban areas and increased urbanisation, has resulted in large pools of semi and unskilled workers, many of whom have come to settle in the mine take areas. Majority of them are engaged in illegal small scale mining to sustain life. The failure to provide this group with the appropriate skills, or support the upgrading of their existing ones, represents a loss of potential talent across a generation and could lead to urban decay and other social vices. Government, development partners and donors must ensure that these capacity constraints are addressed. The study is most prudent to investigate the relationships between SMEs and the Growth of Towns in Asutifi District to ascertain the relevance of the sector and how it contributes in fighting the menace in the District. iv The study identified the types of SMEs operating in the District and examined their roles and prospects. It further examined the SME sector and its contribution to local development and established some relations that exist between SMEs and the Growth of the selected communities under investigation. The study also reviewed related literature on the topic and developed a conceptual framework. The Growth Pole theory is used as the theoretical underpinning for the research. The study particularly focused on agro processing (palm oil extraction, cocoa powder making etc), agriculture and forest products (food making enterprises, poultry farms, etc), service enterprises, (provision stores, hair dressing salons, and mechanic enterprises), primary fabrication ( locally made shoe manufacturers, tie and die enterprises, etc) and traditional craft (clay/kaolin centres, and blacksmithing). The study combined survey and case study methods of data collection and analysis. Questionnaires were particularly, administered to entrepreneurs and purposively selected institutions with specialised knowledge about SMEs and who were willing to assist in the success of the survey. The sole ownership is the dominant business in Asutifi District. The DA, BAC and other NGO‟s in the District support the sector. There are High in-migration and high demand for SMEs products in the District with inadequate markets. The implications are discussed in the text and some recommendations made available for further investigations in the near future.

Source: KNUST