Ghanaian small and medium sized enterprises must improve financial management, corporate governance and operational capacity if they are to take full advantage of the government’s 24 hour economy, the Association of Ghana Industries (AGI) has warned.
AGI President Kofi Nsiah Poku said the association is working with government and the 24 hour economy secretariat to create conditions that allow smaller businesses to expand and take up opportunities expected from increased economic activity.
“So, we are working hard with government to make sure that there are policies that will support or give a good environment for these small businesses to grow,” he said.
He was speaking on the sidelines of an SME training programme for businesses in the Western and Central regions held in Takoradi.
SMEs face a capacity test
The 24 hour economy is expected to create opportunities for businesses to increase production and operate for longer periods. But for many SMEs, simply adding another shift is not that easy.
Businesses need working capital to hire workers, purchase raw materials, increase inventory and cover electricity, transportation and security costs before the additional revenue begins to come in.
That is where financial management becomes important.
The AGI training focused on bookkeeping and corporate governance, encouraging entrepreneurs to keep accurate financial records, separate personal finances from company accounts and establish clearer internal management structures.
Poor records have long made it harder for SMEs to access formal credit. Banks need reliable information on revenue, cash flow, profitability and debt obligations before determining whether a business is capable of repaying a loan.
For an SME hoping to expand under the 24 hour economy, that information could make the difference between securing financing and being turned away.
Longer hours must translate into productivity
There is another issue. The success of the 24 hour economy will not necessarily be measured by how long businesses remain open, but by whether those additional hours produce more goods, services and jobs.
A factory operating below capacity, for instance, could use existing machinery for a second or third shift rather than investing immediately in new equipment. Agro processors, exporters and logistics operators could similarly benefit from reduced downtime.
But longer operating hours also mean higher costs.
Businesses may have to pay additional wages, consume more electricity, increase transportation spending and provide security for workers operating at night.
Reliable power, affordable financing, efficient transport infrastructure and predictable regulation will therefore matter just as much as the policy itself.
From small businesses to bigger enterprises
Mr Nsiah Poku drew on his own experience to illustrate the potential for SMEs to grow.
“We all started in the same manner. I started manufacturing medicine from my father directly 35 years back,” he said.
The bigger challenge for Ghana is getting more businesses to make that journey from small enterprises into larger, productive companies capable of competing beyond the domestic market.
Informality, limited access to finance and weak governance have kept many firms trapped at the lower end of the business scale.
Separating personal and business finances, maintaining credible accounts and establishing clear responsibilities can make a company more attractive to banks, investors and larger corporate customers.
SMEs could benefit from wider supply chains
The potential gains from the 24 hour economy may also extend beyond companies that operate throughout the night.
A manufacturer increasing production could create additional demand for packaging companies, transport operators, maintenance firms, security providers, technology companies and food suppliers.
That creates room for smaller businesses to plug into larger industrial supply chains.
But they will need to meet the standards expected by bigger firms, particularly around delivery schedules, product quality, financial records and corporate compliance.
The more Ghanaian SMEs can meet those requirements, the greater the share of economic activity that could remain within the domestic economy.
Finance remains the big constraint
Training alone, however, will not solve the financing problem.
Large companies generally have greater access to bank credit, retained earnings and other sources of capital. Smaller firms often rely on personal savings or expensive commercial loans.
If that gap persists, larger businesses could capture most of the benefits of expanded economic activity while smaller enterprises struggle to scale.
The AGI training programme is intended to address part of that problem by improving the financial and institutional readiness of SMEs.
The Takoradi programme is the fifth SME training session organised by the association across the country.
For businesses preparing for the 24 hour economy, the message is becoming clearer. Expansion cannot begin with the night shift. It begins with proper accounts, sound governance, access to working capital and the ability to demonstrate that additional production can actually make commercial sense.
If those pieces fall into place alongside reliable infrastructure and stronger demand, the policy could give Ghanaian SMEs room to grow.
Without them, extending business hours could simply expose the same weaknesses that have kept many small businesses small.
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