In a significant move to bolster small businesses, the Ghanaian government has unveiled a new set of classifications for Micro, Small, and Medium Enterprises (MSMEs). These classifications, under the Ghana Enterprises Agency (Classification of MSME) Regulations, 2023, aim to provide a standardized definition for research and data collection on MSMEs.
The classifications are as follows:
- Micro Enterprises: Defined as those with 1 to 5 permanent employees, a turnover of up to 150,000 Ghana cedis, or a fixed asset value of up to 150,000 Ghana cedis.
- Small Enterprises: Defined as those with 6 to 30 permanent employees, a turnover of more than 150,000 Ghana cedis and up to 6 million Ghana cedis, or a fixed asset value of more than 150,000 Ghana cedis and up to 6 million Ghana cedis.
- Medium Enterprises: Defined as those with 31 to 100 permanent employees, a turnover of more than 6 million Ghana cedis and up to 18 million Ghana cedis, or a fixed asset value of more than 6 million Ghana cedis and up to 18 million Ghana cedis.
- Large Enterprises: Defined as those where the employment size, turnover, or fixed asset value exceeds the criteria for a medium enterprise.
The Minister of Trade and Industry, Hon. K.T. Hammond, launched the new regulations during the 2024 MSME Day commemoration. He emphasized the importance of these classifications in enhancing the contributions and performance of the MSME sector.
“Through strategic initiatives and programmes, Ghana aims to enhance the contributions and performances of the MSMEs sector. While forging a path towards a future defined by a nation’s growth and opportunity, it is in this context that my ministry is looking at identifying such MSMEs with high potential and supporting their capacity building,” said Hon. K.T. Hammond. “MSMEs are the backbone of Ghana’s economy and growth…they constitute 80% of the workforce and 70% of the GDP.”
Kosi Yankey-Ayeh, the Chief Executive Officer of the Ghana Enterprises Agency, highlighted the significance of the new regulations. “Our programmes have also enabled MSMEs to access new markets, adopt digital technologies, and improve their competitiveness. The new Ghana Enterprises Agency Classification of Micro, Small and Medium Enterprises Regulation 2023, provides a clear and comprehensive framework for defining and categorising MSMEs in Ghana.”
This new classification system is designed to help the Ghana Enterprises Agency deliver on its mandate more effectively, improve coordination among government institutions, development partners, financial institutions, and the private sector, and enable MSMEs to access targeted support and resources.
“With this classification, Ghana Enterprises Agency can design targeted interventions that meet the specific needs of each category of MSMEs, track the progress of MSMEs in Ghana, and realize the impact of our programmes more effectively. It will facilitate coordination among various stakeholders in MSME development in Ghana,” Yankey-Ayeh added.
The new regulations will also allow the Ghana Enterprises Agency to understand the role of gender in MSME development, identifying whether there are more women or youth in specific classifications, and tailoring support efforts accordingly.
In conclusion, the introduction of these new classifications is a crucial step towards supporting and growing Ghana’s MSME sector, ensuring a robust and thriving economic future.
Know the Classification of Your Business, ACAD-GH.
