The growth of SMEs amid the COVID-19 pandemic in Ghana

Published: Jul 25, 2023

Abstract:

Purpose: This study aimed to determine how Ghana's small and medium-sized businesses (SMEs) performed in terms of growth during the COVID-19 pandemic.

Research Methodology: This study adopted a quantitative research method, alongside descriptive and explanatory research designs. Primary data were gathered from 400 SMEs in the general trading and manufacturing industries. Descriptive statistical analyses and Pearson multiple regression analyses were performed using the Statistical Package for Social Sciences (SPSvs.26) and XL Stats.

Results: The most critical challenges faced by SMEs during the COVID-19 pandemic include a decrease in sales revenue, followed by the inability of SMEs to pay staff, retrenchment of workers, shortages of raw materials, halted operations, difficulty in supplying goods and services, inability to repay loans, insufficient capital, cash flow shortages, accounting deficiencies, and the least critical challenge associated with a lack of advanced technology. The next major finding was that lockdowns, movement restrictions, social distancing, and market closures had significant negative effects on SMEs’ growth.

Limitations: Varied responses from SMEs in other regions and industries in the country were not gathered. Furthermore, the research instrument ignored the direct views of SME owners and managers regarding the challenges they encountered.

Contributions: The findings are important for entrepreneurs and managers of SMEs, financial institutions, government, and other stakeholders for decision-making purposes.

Novelty: The effect of the pandemic has mostly been linked to financial performance. No study in the Ghanaian context has investigated the effect of the COVID-19 pandemic on the growth of trading and manufacturing SMEs.

Keywords:
1. Covid-19 pandemic
2. Entrepreneurship
3. SMEs
4. SMEs’ Growth
Authors:
Samuel Aidoo
How to Cite
Aidoo, S. (2023). The growth of SMEs amid the COVID-19 pandemic in Ghana. Journal of Sustainable Tourism and Entrepreneurship, 3(3), 159–176. https://doi.org/10.35912/joste.v3i3.1507

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References

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    Al-Fadly, A. (2020). Impact of COVID-19 on SMEs and employment. Entrepreneurship and sustainability issues, 8(2), 629.

    Aladejebi, O. (2020). Managing small businesses in Nigeria during covid-19 crisis: impact and survival strategies. IOSR Journal of Business and Management, 22(8), 24-34.

    Alston, A. J., & Miller, W. W. (2001). Instructional Technology Utilization and Availability in North Carolina and Virginia Secondary Agricultural Education Programs. Journal of Southern Agricultural Education Research, 51(1).

    Alvarez, S. A., & Busenitz, L. W. (2001). The entrepreneurship of resource-based theory. Journal of management, 27(6), 755-775.

    Amoah, C., Bamfo-Agyei, E., & Simpeh, F. (2022). The COVID-19 pandemic: the woes of small construction firms in Ghana. Smart and Sustainable Built Environment, 11(4), 1099-1115.

    Amponsah, R., & Frimpong, I. A. (2020). Ghana in the face of COVID-19: economic impact of coronavirus (2019-NCOV) outbreak on Ghana. Open Journal of Business and Management, 8(04), 1404.

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    Atayah, O. F., Dhiaf, M. M., Najaf, K., & Frederico, G. F. (2022). Impact of COVID-19 on financial performance of logistics firms: evidence from G-20 countries. Journal of global operations and strategic sourcing, 15(2), 172-196.

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    Fairlie, R., & Fossen, F. M. (2021). The early impacts of the COVID-19 pandemic on business sales. Small business economics, 1-12.

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    Kusi, A., Opata, C. N., & Narh, T.-W. J. (2015). Exploring the factors that hinder the growth and survival of small businesses in Ghana (a case study of small businesses within Kumasi metropolitan area). American Journal of Industrial and Business Management, 5(11), 705.

    Kwaah, C. Y., Adu-Yeboah, C., Amuah, E., Essilfie, G., & Somuah, B. A. (2022). Exploring preservice teachers’ digital skills, stress, and coping strategies during online lessons amid covid-19 pandemic in Ghana. Cogent Education, 9(1), 2107292.

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    Narula, R. (2020). Policy opportunities and challenges from the COVID-19 pandemic for economies with large informal sectors. Journal of international business policy, 3, 302-310.

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    Nathan, M., & Overman, H. (2020). Will coronavirus cause a big city exodus? Environment and Planning B: Urban Analytics and City Science, 47(9), 1537-1542.

    Ohanyere, C. (2022). Effects of COVID19 on the Performance of Small and Medium Scale Enterprise in Anambra State. International Journal of Business Systems and Economics, 13(5), 169 - 182.

    Omar, A. R. C., Ishak, S., & Jusoh, M. A. (2020). The impact of Covid-19 Movement Control Order on SMEs’ businesses and survival strategies. Geografia-Malaysian Journal of Society and Space, 16(2), 90-103.

    Opoku, E. E. O., Adams, S., & Aluko, O. A. (2021). The foreign direct investment-environment nexus: does emission disaggregation matter? Energy Reports, 7, 778-787.

    Quaye, I., Abrokwah, E., Sarbah, A., & Osei, J. Y. (2014). Bridging the SME financing gap in Ghana: The role of microfinance institutions. Open Journal of Business and Management, 2(04), 339.

    Rababah, A., Al?Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID?19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4), e2440.

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    Ucbasaran, D., Westhead, P., & Wright, M. (2008). Opportunity identification and pursuit: does an entrepreneur’s human capital matter? Small business economics, 30, 153-173.

    Welter, F. (2011). Contextualizing entrepreneurship—conceptual challenges and ways forward. Entrepreneurship theory and Practice, 35(1), 165-184.

    WHO. (2020). Preparedness, prevention and control of COVID-19 in prisons and other places of detention: Interim guidance. Retrieved from

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  2. Al-Fadly, A. (2020). Impact of COVID-19 on SMEs and employment. Entrepreneurship and sustainability issues, 8(2), 629.
  3. Aladejebi, O. (2020). Managing small businesses in Nigeria during covid-19 crisis: impact and survival strategies. IOSR Journal of Business and Management, 22(8), 24-34.
  4. Alston, A. J., & Miller, W. W. (2001). Instructional Technology Utilization and Availability in North Carolina and Virginia Secondary Agricultural Education Programs. Journal of Southern Agricultural Education Research, 51(1).
  5. Alvarez, S. A., & Busenitz, L. W. (2001). The entrepreneurship of resource-based theory. Journal of management, 27(6), 755-775.
  6. Amoah, C., Bamfo-Agyei, E., & Simpeh, F. (2022). The COVID-19 pandemic: the woes of small construction firms in Ghana. Smart and Sustainable Built Environment, 11(4), 1099-1115.
  7. Amponsah, R., & Frimpong, I. A. (2020). Ghana in the face of COVID-19: economic impact of coronavirus (2019-NCOV) outbreak on Ghana. Open Journal of Business and Management, 8(04), 1404.
  8. Anoke, F., Ngozi, N. H., Uchechukwu, E. S., & Joyce, I. (2022). Entrepreneurial Marketing And SMEs Growth In Post Covid-19 Era In Awka, Anambra State, Nigeria. International Journal of Financial, Accounting, and Management, 4(2), 115-127.
  9. Atayah, O. F., Dhiaf, M. M., Najaf, K., & Frederico, G. F. (2022). Impact of COVID-19 on financial performance of logistics firms: evidence from G-20 countries. Journal of global operations and strategic sourcing, 15(2), 172-196.
  10. Bularafa, B. A., & Adamu, U. G. (2021). Effect of COVID-19 pandemic on SME Performance in Nigeria. Advanced International Journal of Business, Entrepreneurship and SMEs, 3(7), 75-92.
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  15. Fairlie, R., & Fossen, F. M. (2021). The early impacts of the COVID-19 pandemic on business sales. Small business economics, 1-12.
  16. Fening, P., Agyei, I., & Bruce, T. (2022). The Impact of Covid-19 Pandemic on the Traditional Gold Jewellery Industry in Ghana: The Gold Price Factor. Neuroquantology, 20(17), 131-141.
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  25. Kissi, E., Agyekum, K., Baiden, B. K., Reuben Agyei, T., Badu Eshun, B. T., & Badu, E. (2022). Factors influencing tender pricing strategies of construction SMEs in Ghana. International Journal of Construction Management, 22(3), 387-399.
  26. Kuma, R. (2011). Research methodology: A step-by-step guide for beginners: Sage publications ltd.
  27. Kusi, A., Opata, C. N., & Narh, T.-W. J. (2015). Exploring the factors that hinder the growth and survival of small businesses in Ghana (a case study of small businesses within Kumasi metropolitan area). American Journal of Industrial and Business Management, 5(11), 705.
  28. Kwaah, C. Y., Adu-Yeboah, C., Amuah, E., Essilfie, G., & Somuah, B. A. (2022). Exploring preservice teachers’ digital skills, stress, and coping strategies during online lessons amid covid-19 pandemic in Ghana. Cogent Education, 9(1), 2107292.
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  34. Ohanyere, C. (2022). Effects of COVID19 on the Performance of Small and Medium Scale Enterprise in Anambra State. International Journal of Business Systems and Economics, 13(5), 169 - 182.
  35. Omar, A. R. C., Ishak, S., & Jusoh, M. A. (2020). The impact of Covid-19 Movement Control Order on SMEs’ businesses and survival strategies. Geografia-Malaysian Journal of Society and Space, 16(2), 90-103.
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  38. Rababah, A., Al?Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID?19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4), e2440.
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  41. Ucbasaran, D., Westhead, P., & Wright, M. (2008). Opportunity identification and pursuit: does an entrepreneur’s human capital matter? Small business economics, 30, 153-173.
  42. Welter, F. (2011). Contextualizing entrepreneurship—conceptual challenges and ways forward. Entrepreneurship theory and Practice, 35(1), 165-184.
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