Ghana Leads Africa’s Top Economies in MSMEs’ Contribution to GDP
Despite efforts by the Nigerian government to promote small and medium-sized (MSMEs) enterprises, Ghana is leading the rest of Africa in the contribution of these organisations to total output of goods and services, figures show.
An analysis of the contributions of MSMEs production in five African economies showed that those in Ghana contributed more to GDP, compared to Nigeria, South Africa, Kenya, and Egypt.
According to International Finance Corporation (IFC), MSMEs account for up to 90 percent of all businesses in developing markets, and the ones operating in the formal sector contribute about 60 percent to total employment and account for 40 percent of national income in developing
The Nigeria economy expanded slightly by 1.81 percent in the third quarter of last year, according to the National Bureau of Statistics. Dikko Radda, Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) said in 2018, that MSMEs operating in Nigeria are 37.1 million, while their contribution to GDP and export earnings stood are 48.7 percent and 7.2 percent, respectively.
Things seem to be auguring well for the Ghanaian economy, as GDP expanded by 7.4 percent, year-on-year in the third quarter of 2018, following a 5.4 percent expansion in the previous period. MSMEs contribute 70 percent to GDP in Ghana and account for 92 percent of businesses, data from Bank of Ghana (BoG) showed.
Africa’s second largest economy, South Africa, recorded 2.2 percent growth in GDP in third quarter of the year, up from 0.7 percent in the previous quarter. According to the South African Ministry of Trade and Industry, MSMEs account for between 52 percent to 57 percent in GDP and 60 percent in employment.
In Egypt, Minister of Finance, Mohammed Ma’it, said the achieved an increase in GDP of 5.3 percent in 2017/2018, up from an average of 2.3 percent between 2011 and 2014. In a disclosure made by the General Authority for Investment in Egypt, MSMEs account for 80 percent of all enterprises, but their contribution to GDP is below 25 percent.