The Top Five Issues Facing SMEs And Startups In Ghana’s Tech Sector

The future of our economy is in tech startups and small and medium-sized enterprises (SMEs). They have the ability to boost employment, strengthen Ghana's international reputation, and fundamentally alter our entire economy. According to Disrupt Africa, Ghanaian entrepreneurs raised $60,800,000 in 45 agreements between 2019 and 2021 from companies in the finance, agritech, healthcare, logistics, etc. industries. For Ghanaian startups, that is a step in the right direction. But if we want the tech sector to develop and prosper, we must solve critical problems it faces.

Inability to access funding

This is a situation where one market segment (customers, small businesses, traders, etc) lacks adequate access to capital at reasonable rates in order to either finance their core business activities or expand their business. Startups and SMEs form part of the significant boosters of growth in our part of the world. Yet, one main challenge that plagues them is their inability to access funding which represents a real hindrance to market growth. Most startups and SME businesses are bootstrapped and once that budget is exhausted, other funding sources become limited. At some point, a bank loan may be the next option but startups fail to secure a loan at that level because they do not have any substantial assets to use as collateral. Another underlying factor is that these banks perceive the startups as high risks businesses since they lack the guarantee that they could repay the loan.

Hi-tech infrastructure

Hi-tech infrastructure is the backbone of any digital startup. It's crucial that businesses have access to fast and reliable internet connections in order to run their operations smoothly and effectively. However, the lack of hi-tech infrastructure can hamper a tech startup's growth by limiting its ability to reach customers, partners, suppliers, and other stakeholders.

The main challenges faced by Ghanaian businesses when it comes to hi-tech infrastructure include:

• Poor quality data connectivity
• Low bandwidth rates for mobile devices
• Low smartphone penetration in certain areas
• Expensive digital or hi-tech infrastructure

Difficulty in accessing international markets

There are a number of challenges that affect the ability of Ghanaian tech startups and SMEs to access international markets. These include:

• Lack of a plan and strategy
• Lack of good team members, including developers, business development executives, product managers, and so on
• Lack of good products or services
• Lack of good marketing strategies

Additionally, tech companies have to contend with distribution challenges as well. According to TechCrunch Africa: "If you don't know how your products are going to be distributed when you launch them on foreign soil…your chances of success will be severely limited."