Overcoming The Challenges Of Small And Medium Scale Enterprise(SME)Internationalisation In Ghana

In recent times,it has become very necessary for firms to engage in international trade with foreign market due the increasing trend of globalization.Larger businesses,due to their size and profit margins are able to easily enter into foreign markets and compete favourably than small firms.Internationalization in this modern era has been seen to hold lots of prospects for SMEs especially in developing countries.It has become increasingly important to SME development and competiveness.As defined by many scholars,it affords businesses the opportunity to take advantage of cross-border activities.Internationalisation can be seen as moving towards a more interconnected and a world economy dependent on each other.It also involves the exchange of goods and services among nations of the world.In this sense,internationalization gives firms the opportunity to establish business relations with foreign markets.Internationalization also provides businesses especially SMEs the opportunity to increase in size,revenue generation also share knowledge to enrich their capabilities.In recent times,the concept of internalization has emerged in several disciplines.An important option for expansion of business(small and large)in Africa and beyond is international diversification.SMEs in recent years have been active in development through internationalization.Internationalization allows buyers and countries the opportunity to get information and be exposed to new market trends and products.International trade is also an engine for economic growth.It usually contributes to technological transfer as well as export revenue.It narrows the technological gap between them and their developed counterparts.SMEs are considered the backbone of virtually all economies in the world and suggests that SMEs constitutes a key source of economic growth,dynamism and flexibility in advanced industrialised countries,as well as in emerging and developing economies.In emerging economies,SMEs are the backbone of economic growth in most developing countries in West Africa including Ghana.It promotes innovativeness and ensures poverty alleviation.They are considered the engine of the economy as they lead to job creation and provide sustainable development.SMEs account for over 90% of all enterprises in the Sub-Saharan Africa.It contributes to income generation and speeds up development in urban and rural areas.Africa and Asia has majority of their population living in rural areas where small scale enterprises delivers about 20-45% of full time employment and 30-50% of rural household income.The Ghanaian business community is dominated by SMEs,forming about 90% of registered companies.SMEs have been identified as the catalyst for the economic growth of a country as they constitute a major source of income and employment.The Ghana Statistical Service(GSS)in its national accounts defines firms “with less than 10 employees as SMEs”.The Ghana Enterprise Development Commission(GEDC),on the other hand,“uses a 10 million Ghanaian cedis upper limit definition for plant and machinery”.Another standard used an employment cut-off point of 30 employees in the definition of small-scale enterprises in Ghana”.Micro and Small-Scale Enterprises has different definitions.As a result,an operational definition is needed for this study.The most commonly accepted principle which has been coined from the various definitions is the number of employees of the enterprise.As contained in its Industrial Statistics,the Ghana Statistical Service(GSS)considers firms with less than 10 employees as SMEs and it is this definition that has been used in the course of this study.The employee principle which has also been considered in this study is also in line with the definition of SMEs adopted by the NBSSI.Many initiatives have put forward by governments to support and enhance SME Internationalization.In Ghana,the framework of the National Export Strategy(NES)wants to enhance the potential of the non-traditional export(NTE)sector which also includes food processing to enable it make maximum contribution to GDP growth and national development.The food processing sector in Ghana is mostly made up of SMEs who are engaged in domestic processing like the processing of fruits,vegetables,nuts,cereals etc.Others are also engaged in factory processing like cocoa processing.Most of those who do domestic processing usually use simple tools with little or no formal training.Research on SME internationalization especially with respect to developing economies like Ghana have not been enough to consider specific sectors like the food processing sector and that is the literature gap this research seeks to bridge.The main objective of this study is unearthsome of the challenges faced by SMEs in Ghana with specific focus on the food processing sector in its bid to internationalize.Finding out what the internal and external challenges are the primary research question of this study.Other secondary questions this study will attempt to answer include:a)How SMEs in the food processing sectors can overcome these challengesb)The role Government and other stakeholder can play to aid SME internationalizationThe researcher believes that it has become imperative to extend the internationalisation literature to SMEs in Ghana especially in the food processing sector due to modern trends in globalisation therefore identifying the challenges confronting these SMEs as one of the ways to enable their internationalisation.The role of Government and other stakeholders in this process is very critical and cannot be underestimated.Methodologically,this study approach was adopted due to time constraint upon which the findings were generalized.The study makes use of qualitative and research approach.The study was carried out in the Accra metropolis of the Greater Accra Region of Ghana.The choice was due to the fact that the national capital and it is highly concentrated with SMEs.There is also a high concentration of different kinds of industries in Accra which was deemed more feasible and acceptable.However the study samples SMEs within the food processing sector.Business owners were the main participants of this study.The sample was randomly selected from the list of SMEs provided by the Domestic Tax Revenue Division(DTRD)of the Ghana Revenue Authority.Stratified random sampling technique was used to sample the views of the SME managers.A questionnaire and an interview guide were used in collecting data from the SME’s mangers and stakeholders.The data was analyzed using SPSS software.This research comprises five chapters.Chapter One gives details on the introduction of the study which includes,background to study,Problem Statement,Research Questions,Literature review and Research Methodology.Chapter Two empirically reviews SMEs in Ghana ie Definitions and Classification,SME development in Ghana,Ghana’s Food Processing Sector and the Role SMEs play in Economic Development.In Chapter Three,existing literature on Ghana’s SME Internationalisation and its challenges(internal and external)are reviewed.Chapter Four empirically looks into the Role of Government and other Stakeholders in the Internationalisation of SMEs in Ghana whereas the final Chapter analyses data obtained from SME owners in the food processing sector and other stakeholders.It also discusses finding,gives conclusion and recommendation.