Promoting Micro and Small Scale Industries for local development in Ghana: the case of east Mamprusi District

The promotion of Micro and Small Scale Industries (MSSIs) development for local development in Ghana has always been a major policy instrument of the government. The reason behind this policy is the shift in policy emphasis away from direct state participation in the ownership of enterprises to private sector initiative in economic development. Also, the restructuring of development administration in which the District Assemblies have now become responsible for promoting the development of their localities is another reason. The study consequently seeks to identify institutions promoting micro and small-scale industries in the East Mamprusi District and assess the performance of the support institutions and the constraints faced by the support institutions in the delivery of their services in the district. Within the context of this study, the focus is on small-scale industries engaged in bakery, pito brewing, batik tie and dye, weaving, blacksmithing, soap making, shea butter and groundnut oil extraction. In order to investigate the problem a conceptual and theoretical framework of the study was designed. These guided the design of data collection instruments to suit the research. The study combined survey and case study methods of data collection and analysis. Questionnaires were particularly, administered to entrepreneurs in the survey for collection of data on the socio-economic background of entrepreneurs, their enterprises and environment as objects of the study. An institutional based survey was also conducted among managers of institutions that had to do with micro and small-scale enterprise promotion with the help of interview guides. For the case study methods, group interviews and seasonal calendars were conducted with enterprise associations’ leaders and market queens. The study revealed among other things that sole proprietorship dominates the ownership pattern of micro and small scale industrial sector. In the East Mamprusi District the MSSIs sector of the economy is dominated by females. The enterprises are managed by proprietors with very low educational level and with their own funds being the major source of capital for the businesses. Government and Non-Governmental institutions are supporting the entrepreneurs, more especially at the group level. It also revealed that the government institutions’ (the District Assembly (DA) and its decentralized departments’ performance in promoting MSSIs is very low. The outcomes of the study have implications for local development. The high achievement rates by non governmental institutions promoting small-scale industries imply that employment will be generated for the unemployed population in the rural communities. This is capable of mitigating the problem of the movement of active population from rural communities to urban centres in search for non exiting-jobs. Also, Entrepreneurial skills development for productive activities has a potential to create additional wealth for development through local resource mobilization and utilization. The study revealed, among others, that MSSIs promotion institutions in the country, especially the District Assemblies have failed to support the development of micro and small-scale industries in the East Mamprusi district against the background of inadequate funds, limited logistics support, low level of investment in the local economy and the lack of political commitment. At the enterprise level, entrepreneurs are constrained by low capitalization, inadequate access to material input supply, poor social and technical infrastructure and weak managerial capacity. To address these inefficiencies which have negative ramifications on the promotion of micro and small-scale industries for local development, the research recommended some policy interventions and strategies, including the development of social and technical infrastructure, creation of enabling environment, intensifying adult literacy programmes and business development services. It is anticipated that if these policy perspectives, suggestions and strategies are carried out, it would go a long way to promoting micro and small-scale industries for local development. in Ghana.

Source: KNUST