The growth of SMEs amid the COVID-19 pandemic in Ghana

Abstract

Purpose: This study aimed to determine how Ghana's small and medium-sized businesses (SMEs) performed in terms of growth during the COVID-19 pandemic. Research Methodology: This study adopted a quantitative research method, alongside descriptive and explanatory research designs. Primary data were gathered from 400 SMEs in the general trading and manufacturing industries. Descriptive statistical analyses and Pearson multiple regression analyses were performed using the Statistical Package for Social Sciences (SPSvs.26) and XL Stats. Results: The most critical challenges faced by SMEs during the COVID-19 pandemic include a decrease in sales revenue, followed by the inability of SMEs to pay staff, retrenchment of workers, shortages of raw materials, halted operations, difficulty in supplying goods and services, inability to repay loans, insufficient capital, cash flow shortages, accounting deficiencies, and the least critical challenge associated with a lack of advanced technology. The next major finding was that lockdowns, movement restrictions, social distancing, and market closures had significant negative effects on SMEs’ growth. Limitations: Varied responses from SMEs in other regions and industries in the country were not gathered. Furthermore, the research instrument ignored the direct views of SME owners and managers regarding the challenges they encountered. Contributions: The findings are important for entrepreneurs and managers of SMEs, financial institutions, government, and other stakeholders for decision-making purposes. Novelty: The effect of the pandemic has mostly been linked to financial performance. No study in the Ghanaian context has investigated the effect of the COVID-19 pandemic on the growth of trading and manufacturing SMEs.

Addressing Barriers to entry into international trade by SMEs in Zimbabwe

“…Resources are the key factor of the activity level and type of any firm. Bala, Bello, and Kolo (2008) as well as Aidoo (2022) pointed out that SMEs face some challenges due to limited resources in terms of financing, time, market knowledge, limited impact on the chosen market and a lack of expertise (Ifediora & Ibe, 2014). While this forces many SMEs out of business, it also forces some to be innovative so as to ensure economic success and long-term survival (De Massis, Audretsch, Uhlaner, & Kammerlander, 2018).…”

“…This low involvement of SMES in developing countries in trade might be closely related to their inability to access both local and international capital markets. This, in turn, is attributable to the inaccessibility of loans (Aidoo, 2022), both long-term and short-term, for SMEs to invest in non-current assets and use them as working capital to enhance their operations (Oricchio et al, 2016). A study by Atieno (2009) examined nine SMEs, based in Addis Ababa, specialising in the production of leather and leather products.…”

“…These costs include, among others, international market research, development of export markets, international exhibitions, fluctuating foreign demand, shipment costs, insurance and non-payment of delivered goods (Sibanda et al, 2018). According to López et al (2018), the lack of financial resources is seen as the biggest limitation on SME internationalisation (Aidoo, 2022). Zimbabwe and some Organisation for Economic Cooperation and Development (OECD) and non-OECD countries such as Brazil, Russia, India, China and Israel have come up with new schemes that support SME export performance (Sibanda et al, 2018).…”