The Ghana Export Promotion Authority (GEPA) has advised SMEs to adopt sustainability in their business operations in order to attract the needed capital to expand their businesses to be ready for the export opportunities the African trade deal is bringing.
The Statistical Bulletin report from the Bank of Ghana shows that, out of more than GH¢50 billion that banks gave out as credit to various sectors of the economy as of November 2019, only GH¢344 million went to export trade, representing just 0.6 percent of total credit, indicating that the industry is poorly financed.
So in order to attract foreign capital, Deputy CEO of GEPA, Samuel Dentu, said it is necessary for SMEs in export trade to adopt sustainable methods in their production process due to the increasing consciousness among financiers to support companies which adopt ‘green’ models in their production process; adding that, buyers are also now interested in purchasing from such businesses.
“There is a whole model on green financing happening in the world; there are impact investors all over who are looking at how SMEs are conducting their business to see if they are not having negative impact on the environment.
Buyers who will potentially buy our products are very conscious about standards. Today, buyers want to trace products from the source to see whether companies are working with the right standards. Eventually, if you don’t have the right standards; if your production process is not friendly to the environment, then, nobody is going to purchase your products because you are not producing to meet international standards,” he said.
His comment was backed by Head of Trade for Sustainable Development Sustainable and Inclusive Value Chains Division of Enterprises and Institutions at the International Trade Centre (ITC), John Wozniak, who also reiterated the need for SMEs to go green.
“Basically, we are seeing a phenomenon where more investors and financiers are working with companies that are implementing these types of green solutions because more and more buyers are demanding them. So, if you have an SME that demonstrates improving efficiency towards going green, that falls in the interest of green financiers to support,” he said in an interview with the B&FT.
Relationship between GEPA and ITC
GEPA and the ITC have partnered to help SMEs go green under an initiative dubbed T4SD. As part of the partnership with the ITC, GEPA will build the capacities of local SMEs with practices to optimize resources consumption such as water and energy, reduce costs and implement circular production practices.
GEPA will also empower SMEs with tools to identify relevant standards required by international buyers; identify gaps in compliance with standards, implement practices to address the gaps and ultimately to obtain the certificates of compliance. It is envisaged that GEPA, through the T4SD Hub will develop a viable business model for offering technical assistance to support Ghanaian SMEs to transition to green production practices.