Ghana and its innovation ecosystems: opportunities for SMEs

Ghana is home to approximately 34 million people and boasts a GDP per capita of 2102 USD (as of 2022), positioning it among Africa's leading economies. Its vibrant traditional economy is rapidly becoming a leading innovation hub in West Africa, driven by a thriving ecosystem that fosters entrepreneurship, creativity, and economic growth. For small and medium-sized enterprises (SMEs) this burgeoning innovation ecosystem presents a multitude of opportunities to thrive and contribute to Ghana's economic growth.

Ghana's startup scene has witnessed impressive growth over the last years, with a 144% increase in funding in 2021, totalling $167 million across 14 deals. Currently, SMEs are the backbone of Ghana's economy, as they account for a staggering 85% of all enterprises in the country and contribute about 70% of Ghana's GDP. The nation’s innovation ecosystems present an enabling environment that nurtures innovation and propel SMEs to unlock their full potential. 

In 2023, the Ghana Jobs and Skills Project and the Ghana Economic Transformation Project granted $8.3 million to SMEs as part of its Ghana Enterprises Agency’s YouStart program. This surge places Ghana fourth in West Africa for startup investments, underscoring the immense opportunities available for SMEs in Ghana.. Also, as part of economy recovery efforts post-COVID, the Government of Ghana (GoG)  nation launched the Coordinated Programme of Economic and Social Development Policies (2017-2024) to eliminate the obstacles hindering the growth of the private sector and create an optimal environment for the development of the private sector in Africa.

Furthermore, the Government initiated a catalytic intervention, the Ghana CARES ‘Obaatanpa’ program, to support the recovery and revitalization of micro, small, and medium-scale enterprises (MSMEs). This program is designed to transform the economy and advance a "build forward better" agenda. The first phase of this initiative, from July to December 2020, focused on stabilizing the shocks of COVID-19 by providing social services to citizens, offering relief during the peak of the pandemic. The second phase, spanning 2021 to 2023, invigorated the productive sectors of the economy and implemented import substitution strategies to drive economic growth.

Ghana's innovation ecosystem is driven by a collective effort of various stakeholders, including government (through agencies), private sector, and non-profits. Major stakeholders include the Ministry of Environment, Science, Technology, and Innovation (MESTI), the National Entrepreneurship and Innovation Programme (NEIP), and various private sector entities like the Impact Hub Accra. These organizations have launched numerous initiatives to foster innovation and entrepreneurship. For instance, NEIP provides funding schemes and incubation support for startups, while MESTI offers a comprehensive entrepreneurial training program and seed funding. Impact Hub Accra focuses on creating a collaborative workspace and networking opportunities for entrepreneurs. 

In addition to government agencies, private sector organizations are also playing a vital role in driving innovation in Ghana. For instance, the Ghana Tech Lab is a privately owned initiative that has trained over 5000 youths, created over 500 jobs and incubated 78 startups. International organizations are also playing crucial roles, with the European Union supporting programs like ENRICH in Africa, fostering collaboration between African and European innovation ecosystems. These initiatives are providing vital resources, mentorship, and funding opportunities for Ghanaian startups and SME, such as the Ghana Digital Acceleration Project, supported by a $200 million World Bank fund, which  aims to increase access to mobile internet and digital solutions

The establishment of MEST (Meltwater Entrepreneurial School of Technology) Ghana is another laudable initiative. MEST is a pan-African entrepreneurial school that provides a 12-month training program in software development, entrepreneurship, and business management. Equally, the Ghana Venture Capital Trust Fund (VCTF) has been established to provide funding opportunities to startups and small and medium-sized enterprises (SMEs). The VCTF provides equity financing, debt financing, and grant funding to businesses.

Ghana’s proposed Ghana Innovation and Startups Act aims to create a startup-friendly ecosystem by providing incentives for startup creation and development such as tax exemption for up to eight years, establishment of the Ghana Innovation and Startup Fund to render financial support, Intellectual property protection training and measures, market access support, bankruptcy support for failed startups and many more. 

By 2030, Ghana aims to establish a flourishing innovation ecosystem that stimulates economic growth, enhances citizens' quality of life, and solidifies its status as a leading innovation hub in West Africa. The vision focuses on creating a vibrant environment that nurtures innovation, entrepreneurship, and creativity by leveraging Ghana's rich human capital, natural resources, and strategic location.