ACEYE’s mission is to promote entrepreneurship and free markets by influencing policies on the back of research, professional analysis, nurturing tutoring, advocacy and advisory services.
Fostering entrepreneurship in Ghana has become a major concern to Ghana in recent times. This stems from the consistent rise of unemployment and the government of Ghana’s primary objective of mobilizing domestic revenue in pursuit of its political message – “Ghana beyond Aid.”
As often asked, what is the nature of Ghana’s entrepreneurial ecosystem? The Ghanaian Ecosystem has gone through a cycle of evolution. It is very essential that the Ecosystem is monitored to identify its state at every point in time.
Experience of Co-Authors on the Ghanaian Entrepreneurial Ecosystem:
We have always been quick to think yet slow to wear the lens of prejudice that blurs neutrality. With this write-up, we have our cap of objectivity and impartiality on.
Based on the experience of the authors within the ecosystem, it is essential to speak out on the nature and status of the Ghanaian Entrepreneurial Ecosystem.
Emmanuel Acquah (co-author 1) has read more than 400 books on entrepreneurship across the globe and to a large extent read more than 1000 books on every aspect of human life. He has also been active as a business developer, Project Manager, Business Incubator Lead and Consultant for different organizations in the Ghanaian Entrepreneurial Ecosystem, and currently plays the role of CEO with the Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE).
Richmond Kwesi Ansah (co-author 2) has studied the entrepreneurial Ecosystem, worked with start-ups, conducted research works and made publications on Entrepreneurship, worked as a business developer and currently serves as the Deputy Chief Executive Officer of Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE).
We hope this write up helps you get the answers you have always wanted us to provide. This is our objective opinion on the Ghanaian Entrepreneurial Ecosystem, but you are at liberty to disagree with us on this issue on any solid grounds.
About Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE)
Africa Centre for Entrepreneurship and Youth Empowerment is an entrepreneurial policy think tank promoting youth entrepreneurship and free markets by influencing policies on the back of research, professional analysis, nurturing tutoring, advocacy and advisory services.
What is an Entrepreneurial Ecosystem?
According to Professor Daniel Isenberg, a Professor of Entrepreneurship Practice, Babson Executive Education and the Executive Director of the Babson Entrepreneurship Ecosystem Project, “Entrepreneurial Ecosystem is the predominant metaphor for fostering entrepreneurship as an economic development strategy.”
Power Struggle and impact
The World Bank’s findings on the ease of doing business in Ghana in the last 10 years revealed how the country has been inconsistent despite the resources and efforts committed to promote its economic development agenda.
Within the last 10 years, the country has experienced different leadership styles based on different ideologies between the two leading political parties. The New Patriotic Party and the National Democratic Congress. Owing to this, there is a difference in who becomes the driving force for reducing unemployment: the private sector or the public sector? This also spurs the argument on how taxes and other economic policies are initiated and implemented. To curb this, a National Entrepreneurship Policy would be ideal. However, the question remains: would successive political administrations work within this framework? A recap of the Senchi Consensus in 2015 has not yet met any consideration by the current administration. It is only empirical to affirm that lack of clear direction, difference in political ideologies and low or no commitment by political parties to pursue common entrepreneurial agenda undermine the growth of Ghana’s Entrepreneurial development.
Emergence of Hubs.
The improvement of dignified structures in the form of Business Incubator Centers is one that has caught the attention of many. The success rate of startups incubated by Hubs in Ghana is not clearly known. However, it is evident that majority of the businesses in Ghana within the formal sector are businesses that were not incubated by these Business Incubator Centres.
The assertion that these incubators are new cannot be excluded from this discussion. Business Incubators in Ghana have been in existence averagely for about three years. Their role in providing employable skills to young people is very essential which is complimenting governments effort to increase its human capital base.
However, our research with some hubs in Ghana revealed that there is a need to build the capacity of Hubs in Ghana and give them the needed support to aid them deliver effectively.
There are a number of international donors in the country working with Business Incubator centres as compared to local donors. These donors work with local institutions through cooperation thus earning them the tag, partners.
Despite this significant progress, it is unclear the exact number of young people who have been impacted through such support schemes directly or indirectly.
Young people in Ghana have brilliant ideas towards solving societal problems. This is evident through the number of pitch events organized by key stakeholders such as investors and hubs.
However, there is skill and knowledge gap between who these persons are and what businesses they can build.
It is in light of this that schools in Ghana should be made more practical and encourage the acquisition of hard skills in fields like engineering and Information Technology. Government must set the pace to encourage creativity and innovation at the basic level of Ghana’s education.
Capacity Development Provider
The existence of high number of Capacity Development Providers in the country largely run on adhoc basis. This is good alright, but relatively not ideal since the support received by entrepreneurs are mostly truncated. Per our observation there is a gap between the interest of donors and what truly the needs of these entrepreneurs are. It is only expedient for donors to align their interest with the needs of entrepreneurs for a better impact.
There are a number of investors in the country. However, these investors are mostly found in the nation’s capital. This is not to say investors do not invest in activities in rural areas. Of course, some of them do, particularly those who invest in commercial farming.
Most Investors invest in startups, early and growth stage businesses except for a few such as Seedstar World who invest in ideas and HFC Fund Manager who invest in Matured Businesses.
The kind of investment received so far has mainly been equity and debt. It is to the advantage of entrepreneurs to position themselves well to be ready for business rather than relying on free money as this is rare.
The nature of Ghana’s entrepreneurial ecosystem is very young and complex to understand but it can be improved if there is a clear direction on the type of entrepreneurial ecosystem the country wants to build, having a free market within, building the capacity of service providers and having, mechanism to make institutions accountable.
Antecedents to Entrepreneurship in the Ghanaian Ecosystem
It has been argued on many grounds by practitioners and researchers on the various factors that drive people to enter into entrepreneurship in Ghana. The Ghanaian Ecosystem system has gone through a series of evolution and the intervention of hubs, capacity developers, government and policy makers keep altering the nature of the Ghanaian Entrepreneurial Ecosystem. The Africa Commission (2009) indicated that the Ghanaian Ecosystem has been the solution to youth unemployment. Unlike the nature of the Ecosystem about two decades ago, the recent Ghanaian Ecosystem is teamed up with youth Entrepreneurs. The Ghanaian Ecosystem is dominated by businesses in the informal sector. Studies such as Singer et al. (2015) have indicated that entrepreneurs enter into the Ecosystem because they identify opportunities which they intend to capitalize to contribute to their economic development and the development of the Nation. Other studies have shown that people are attracted into the Ecosystem because they lack better employment prospects. A careful study of the Ecosystem by the Africa Centre for Entrepreneurship shows that majority of the entrepreneurs in the Ecosystem are “necessity-driven” rather than “opportunity-driven.” The Voices of Women Entrepreneurs in Ghana (2007) stated that the Entrepreneurial Ecosystem is dominated by women, but most of them are in the informal sector. The reason why women dominates the Entrepreneurial Ecosystem is because of some natural and social traits that push them into the Ecosystem. When Buame et al. (2012) conducted a study on the skills, knowledge and attitudes of successful female entrepreneurs in Ghana, they revealed that what drives the female entrepreneurs to succeed are their creativity and ability to be innovative, Enthusiasm and Energy, Intelligence, Determination and Persistence, Confidence, Good human relations, and acceptance of possibility of loss. These same factors influence men as well, but the argument is that most women are moved into Entrepreneurship by “compulsion factors” rather than “attraction factors.” For instance, women are forced into business to supplement their families, take care of their children (in case of single mothers), do something to earn social respect. It is more common to see women moving from one business to the other trying hard to survive in the Ecosystem. In the Ghanaian context, most entrepreneurs are pushed into entrepreneurship when they are hard-pressed. However, the above mentioned traits keeps them successful or not when they enter the Ecosystem. Therefore, resources and efforts should be geared towards the development of the youth in developing these antecedents in order to succeed in the Ecosystem.
What can be improved
Most of the activities done within the ecosystem by stakeholders are mostly done in isolation. There is a need for a joint effort not only in organizing seminars and conferences but also at every stage of the entrepreneurial journey.
Despite the fact that business incubator centres have not contributed much to the growth of existing matured businesses, the high cost of infrastructure makes it necessary to have more of such support mechanism for entrepreneurs to have access to co-working spaces which often has other benefits as access to internet and other capacity building program.
There is also a gap between investors and startups. This is due to lack of localized solution and standardized business support service capable of making local businesses investment ready.
There is a need for government to thoroughly and continuously evaluate the impact of it policies on local businesses as the very policies initiated by the government does not always impact businesses positively.
Buame, S.C.K, Asempa, N.A. and Acheampong, G. (2013). Exploring the skills, knowledge and attitudes of successful female entrepreneurs in Ghana. Management Science Letters 3 (2013) 395–404
Aspen Network of Development Entrepreneurs (2018). Ghana Entrepreneurship Snapshot.
Africa Commission. (2009). Realising the Potential of Africa’s Youth: Report of the Africa Commission. Africa Commission
Singer, S., Amorós, J. E., & Arreola, M. D. (2015). Global entrepreneurship monitor: 2014 Global report. Global Entrepreneurship Research Association (GERA).
Voices of women entrepreneurs in Ghana (2007). World Bank. Retrieved from http://documents.worldbank.org/curated/en/237821468250300549/Voices-of-women-entrepreneurs-in-Ghana