The 2021 Ghana Youth Business Performance and Sustainability Index Report highlights that majority of businesses, especially youth-owned enterprises were hardly sustained due to exorbitant rent charges usually demanded by property owners to obtain operational spaces to do business.
“Youth businesses in Ghana face high cost of doing business and this severely threatens their sustainability”.
As a result, the report calls on the government to address the high cost of rent in acquiring infrastructure for business operations to ensure their sustainability. Also, it urges government and policy makers to reduce barriers that impede business registration to formalise the informal business sector.
Dr. Prince Frimpong, the Lead Consultant, stated during the presentation of the findings of the report acknowledged that technological advancement has made it possible for businesses to thrive without physical space. However, he noted that some businesses, particularly those in the manufacturing and industry sectors, still require physical space to operate.
Need for affordable spaces for youth businesses
As a result, Dr. Frimpong suggested that government should look for ways to provide some permanent but affordable spaces to such young businesses. His emphasis was however, on businesses owned by the youth to ensure their survival and sustainability.
“Inequality of opportunity opened to youth businesses has the tendency of making the disadvantaged ones fall out of business with all their entrepreneurial skills. As a consequence, there is the need to create more market spaces at affordable prices. This reduces the cost of operations of businesses and, hence, potentially improves performance and sustainability”.
Furthermore, Dr. Frimpong identified stable macroeconomic policies as critical factors to the survival of youth-owned enterprises. Consequently, he urged the government to develop prudent macroeconomic policies to reduce the cost of doing business.
Government places high priority on youth
Meanwhile, in a speech read on his behalf, Mr Mustapha Ussif, Minister of Youth and Sports, stated that the government placed a high priority on youth skills development and support of young entrepreneurs and youth-led businesses.
The Minister further stated that the government is building well-functioning legal, regulatory public institutions and administrative environment to promote the sustainability of youth-led enterprises. According to him, this is “essential as it lessens the burdens of young entrepreneurs”.
On her part, Mrs. Comfort Ocran, CEO of Y-SEG, urged government and policy makers to adopt the report for the formulation of youth-owned business development policies.
The scope of report
The study was conducted by the Youth Sector Engagement Group (Y-SEG), Association of Ghana Industry and the Ghana Chamber of Young Entrepreneurs. It sought to identify factors that hindered or otherwise the sustainability of youth-owned businesses to inform policy decisions of government.
In all, 2,016 respondents, aged between 18 and 35 years were interviewed, out of which 1,105 were males and 911 were females. It was conducted in all 16 regional capitals of the country.
The study focused on three major dimensions namely Social, economic and systems. The social dimensions covers human capital development, training and the entrepreneurial skills of the owner. The economic dimension, on the other hand, focuses on the cost of doing business, access to credit and finance, as well as the risk level of doing such business. The final dimension, systems, highlights issues such as governing structures, innovation, taxes and registration.
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