The Ghana Enterprises Agency (GEA) has passed a new legislative instrument aimed at standardizing the classification of micro, small, and medium enterprises (MSMEs) in the country.
Why the need for MSME classification?
The classification serves a dual purpose: firstly, it standardizes the definition of micro, small, and medium enterprises in Ghana. This creates a clear and consistent framework for identifying and categorizing businesses based on factors like employee count, turnover, and assets. Secondly, the classification system will facilitate the creation of a national register of SMEs. This data collection is crucial for research purposes and allows policymakers and stakeholders to gain valuable insights into the size, composition, and needs of the country’s entrepreneurial ecosystem. By understanding the SME landscape, government and other entrepreneurship ecosystem enablers can design targeted programs and support initiatives that foster growth and contribute to the overall economic development.
New Classification Thresholds
The new system outlines specific criteria for each MSME category:
- Micro Enterprise: Up to 5 employees, with a turnover or fixed asset value less than or equal to GHS 150,000.
- Small Enterprise: 6-30 employees, with a turnover between GHS 150,000 and GHS 6 million, or a fixed asset value within the same range.
- Medium Enterprise: 31-100 employees, with a turnover exceeding GHS 6 million but not exceeding GHS 18 million, or a fixed asset value within the same range.
- Large Enterprise: Any enterprise exceeding the criteria for a medium enterprise.
Overall, the GEA’s new regulations for MSME classification represent a positive step towards a more robust and data-driven support system for Ghana’s entrepreneurial sector.
Source: GEA
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Staff Reporter
Staff writer at Ghana Innovation Journal covering innovation, technology and entrepreneurship across Ghana and Africa.