Ghanaian businessmen and women are among the best brilliant brains on the continent of Africa. They are innovative and entrepreneurial as well as creative in coming with products for market, and yet, after nearly 60 years after independence, Ghanaian companies are not transforming into large multinational corporations as one would like to see. Not many have listed on the stock exchange, employed thousands of people, or extended their dominion across our borders.
Globalization has made the world a global village with companies expanding and entering into other markets to do business. Data from the Ghana Investment Promotion Centre (GIPC) shows that between 1994 and June 2011, there were 17 registered Nigerian firms operating in Ghana. Among these firms are the global giants, DANGOTE, GLO and UBA which have spread all over the continent. Right here in this country, they dominate some of our industries and have even become household names. An example is Dangote employing over 1,000 Ghanaians and still counting.
Most recently, there has been a clarion call on Ghanaian businessmen and women to go global, and some have even called on the state to propel small firms in the country into global significance.
In March this year and during our 59th independence anniversary celebration, the President of Kenya, Uhuru Kenyatta also added his voice when he called and extended an invitation to Ghanaian businesses to come to Kenya and do business. But would they respond and rise up to their fullest potential and become global giants?
The Ghanaian Business Environment
Most of Ghanaian businesses are small firms which do not have the financial capacity to expand abroad. They do not have the necessary funds to develop, and this is impacting their ability to grow.
According to US Small Business Administration, a small business is defined as one that has fewer than 500 employees and makes less than $7 million in annual revenue. Using this measure, data from the Bank of Ghana (BoG) reveals that this constitutes about 90 percent of the country’s business community.
Access to credit and its high cost continue to dominate the list of frustrations facing businesses in the country. Small firms cannot easily access funding from banks and the cost of borrowing is equally expensive. This has made many companies struggle to break onto the international scene. However, small firms need credit to grow if they are to reach multinational status, and the lack of capital affects virtually every cost that a business takes on.
Ghanaian businesses are operating in a harsh environment with high monetary policy rates coupled with exorbitant interest rate charges by the banks. Inflation in the country still remains beyond single digit coupled with steep depreciation of the currency and volatile exchange rates.
Majority of the small firms in the country lack education and knowledge on how they can expand and grow their businesses. They lack formal structures such as board of directors and competent management teams. Others do not even know how to prepare and keep credible and audited financial accounts for financial institutions to find it easier dealing with them or to make them attractive enough for investors. Most of boards (if they even exist) are made up of family members and cronies of the CEO who are mostly not competent enough to grow them into multinationals.
These and many more are factors which Ghanaian firms have to overcome to enlarge and expand.
Small Thinking
Perhaps one other reason why Ghanaian firms are not transforming onto the global scene is because the average Ghanaian businessman or woman is just not ambitious or thinking big and thinking global. He has no big aims and dreams for himself and business beyond the shores of the land. His thinking and strategies are only confined to the four corners of the country. He wants to expand but only to the various parts of the country and does not see the bigger picture. He desires to have branches all over the country but not across Africa. He wants to play it safe and operate in an environment he is familiar with rather than venturing into an unfamiliar and uncertain business terrain.
The average Ghanaian business person seems too satisfied on the local scene and not motivated enough to achieve on the bigger stage. He is happy with his small acts and reaching the half-way point of his fullest potential.
His business goals are just too small and this is preventing him from pushing onto the global stage. He has become comfortable with the very little he has which only limits his ability to think big and beyond his own lifetime.
Solution
Ghanaian businesses must begin to consider pooling their resources together towards building stronger businesses which will grow into viable global brands.
Mergers and acquisitions will lead to increased company performance and this will make the new merged company access more markets than they would as individual entities. In addition, they will be able to offer a greater range of products and services which will enhance their revenue and make them financially stronger.
The merged company can also make use of the very best minds from both companies and make up for the shortfalls in an individual company’s skill-set. The value of the company will increase as a net result.
Until recently, this concept of mergers was something alien to Ghanaian businessman or women as they were unwilling to go down this path. The Ghanaian business people must understand that most conglomerates that have grown to become multinationals are not 100 percent owned by the founders.
In this globally competitive business arena where multinational corporations are overshadowing the nationals, this must be the best step forward for Ghanaian businesses to create global giants and attain international significance.
Small firms will also have to formalize their business activities so that financial institutions will find it easier dealing with them. They need to put in place formal structures such as board of directors, competent management teams, prepare and keep credible and audited financial accounts for financial institutions to lend to them, and grow them into the bigger businesses that we all want them to become.
To take advantage of potential investors, Ghanaian businesses must begin to float shares on the stock exchange to raise the necessary capital for expansion. The government must also do more to create the enabling environment for businesses to thrive, expand and be able to go beyond the borders of the country. Government must build the infrastructure, bring down inflation, maintain a strong currency which will not be prone to frequent depreciation, and bring down the monetary policy rate for banks to reduce their interest rates for businesses to access vital funds for growth.
Government must also deliberately and aggressively propel businesses that have the potential to be global giants. There are some Ghanaian businesses which are already doing well in the country and have established their brands across the length and breadth of the country which can do with government support. It is said that in Nigeria, the Nigerian government under President Obasanjo deliberately propelled DANGOTE, GLO and UBA among others to be what they are today as 20 years ago they were just domiciled in Nigeria. The government can also do the same for Ghanaian businesses.
Ghanaian businessmen and women must begin to think big and think global to expand their businesses to exploit the benefits of globalization. This includes having access to a much larger base of customers, increased revenue, and greater prestige.
Going global begins from the mind as we are who we are and where we are because of the way we think. Business people must change the way they think and begin to stretch their imagination and see themselves first on the global scene in their mind before they can ever be there. They must develop big ambitions and see possibilities and no limitations in thought even amidst turmoil. The Ghanaian business people must develop the habit of thinking big, acting big and doing bigger things than they ever thought were possible.
Despite the prevailing challenges, the future looks bright for Ghanaian businesses as there is a new generation of Ghanaian entrepreneurs hungry to achieve on the global stage. It makes us hopeful that in the future, we will see Ghanaians owning businesses all over the continent, employing thousands and blazing new trails. These will be multinational companies from Ghana that will dominate industries in other African countries and determine the destiny of many economies on the continent, if not the world at large.
When that future arrives, the status quo and the barriers that limit Ghanaian businesses will be forever broken and Ghanaian business people will take their rightful place on the global scene. We are confident that day will soon dawn.