Support to Private Sector Development programme 2010-2014 (SPSD II)

Support to Private Sector Development programme 2010-2014 (SPSD II) is promoting and contributing to an all-inclusive private sector development, aligning closely to government priorities by supporting creation of sustainable and decent jobs; and facilitating access to credit to the benefit of micro, small and medium sized enterprises, with special attention to agriculture and rural areas.

The SPSD II is a five year programme that is being implemented from 2010 to 2014, and it seeks to improve the Ghanaian private sector through improved conditions for business operation including enhanced local and foreign investor confidence, and increased productivity and employment through broad-based enterprise growth. The figure below illustrates the programme. 

Key challenges addressed by the programme

Many enterprises prefer to operate informally, because they perceive the costs and complications of joining the formal private sector to high compared to the benefits, so improving the motivation to formalise will require a combination of reducing the cost and burden of being formalised while increasing the benefits. A second major challenge is the productivity among Ghana’s MSMEs and farmers, which are low compared to other countries in Sub-Saharan Africa. This is largely due to relatively low levels of invested capital per job, so increasing productivity will require a facilitation of investments in Ghana. Thirdly is the access to credit. Banks are unwilling to lend to the agricultural sector due to the perceived risk in lending to farmers, and therefore is the financial institutions knowledge about agriculture, as well as the business approach of farmers, addressed through the programme.