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Coping with corruption: Small and medium enterprises in Ghana

Small and medium-sized enterprises are important for employment and development, but they face corruption challenges. In Ghana, a survey of small business owners showed that they use different coping strategies and perceive different obstacles to anti-corruption. Small firms seem to be more compliant when exposed to international standards and regulations as partners to multinationals. This is the aim of some donor-supported programmes such as the Supply Chain Development Program, which seems to have worked well in Ghana.


30 June 2022
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This U4 Brief is based on research conducted for U4 in 2017 by Professor Godfred A. Bokpin of the University of Ghana Business School.

Main points

  • In Ghana, small and medium enterprises (SMEs) account for 99% of all businesses, and micro-businesses are nearly 80% of the total. The number of SMEs is growing rapidly, especially in the service sector and in wholesale and retail trade.
  • Ghana has a comparatively strong legal and institutional framework against corruption, but there are still corruption pressures on enterprises in Ghana and reported weaknesses in the legal and institutional business environment.
  • An opinion survey among owners and managers of SMEs in Ghana indicated that many used bribes to avoid taxes and undervalued revenues in order to reduce tax. Access to public utilities such as water and electricity posed the greatest corruption risk.
  • Small and vulnerable SMEs in the private consumer market felt the most pressure to use corruption as a survival strategy. SMEs working with multinationals in the export market and SMEs seeking government contracts were generally bigger and stronger, and more often sought to avoid corruption and work together.
  • An approach that has sought to change behavioural incentives and create virtuous market incentives for SMEs is the Ghana Supply Chain Development Program, which offers anti-corruption training and certification.
  • Most SMEs in Ghana that have enrolled in this programme have reaped benefits and found no drawbacks. However, some reported that other businesses were reluctant to work with SMEs that have anti-corruption certification. Others noted that costs were high in terms of long and cumbersome certification procedures.

Cite this publication


Amundsen, I.; (2022) Coping with corruption: Small and medium enterprises in Ghana. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Brief 2022:2)

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About the author

Dr. Inge Amundsen is a political scientist at the Chr. Michelsen Institute focusing on democratic institutionalisation, parliaments, political parties, political corruption, and natural resources (petroleum resources management and revenue management). His geographic expertise includes Malawi, Bangladesh, Angola, Ghana, Nigeria, and francophone West Africa. He completed his PhD in comparative African studies at the University of Tromsø, Norway, in 1997.

Disclaimer


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


private sector, small and medium sized enterprise, Ghana, Western Africa