Between dream and license: Regulatory maze holding back Ghana’s MSMEs
For seven years, Ms. Samiratu Sakibu has built Mira Taste Services one product at a time. The post Between dream and license: Regulatory maze holding back Ghana’s MSMEs appeared first on Ghana Business News .
The regulatory environment in Ghana is creating significant challenges for micro, small and medium enterprises (MSMEs), according to a study by the Institute for Liberty and Policy Innovation (ILAPI). Of the country's businesses, 92% are classified as MSMEs, and they contribute nearly 70% of the Gross Domestic Product (GDP), yet their potential remains largely untapped due to regulatory issues.
Ms. Samiratu Sakibu, owner of Mira Taste Services, an agro-processing business, illustrates the frustrations faced by many MSMEs. Despite her business's success and clear expansion plans, Sakibu is hindered by a complex maze of permits, inspections, renewals and regulatory requirements. She pays for a business operating permit and a property-related permit for the same premises, and she questions the need for both.
Similar overlaps in institutional mandates, excessive documentation, inconsistent enforcement and long registration processes burden MSMEs. These costs consume both money and time, forcing businesses to absorb the expenses or pass them on to consumers. The ILAPI study found that the average cost of obtaining a business entry certificate was GH¢1,030, while permits and licenses averaged GH¢1,275 and GH¢1,600 respectively.
Some businesses spent as much as GH¢3,000 on licenses. Registration with multiple institutions, such as the Office of the Registrar of Companies, Metropolitan, Municipal and District Assembly, Ghana National Fire Service, and Food and Drugs Authority, further complicates the process. Sakibu's frustration is not unique; 40.8% of surveyed businesses took more than a month to obtain business entry certificates, with only 17% completing the process within a week.
The delays create opportunity costs, as entrepreneurs spend time following up on applications instead of growing their businesses. ILAPI warns that the regulatory burden can discourage some entrepreneurs from formalising their businesses and urges for digitisation and coordination among institutions to streamline the process.
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