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SMEs and Young CEOs Summit 18: Entrepreneurs urged to adopt digitization and develop integrity

The 2nd edition of the Ghana Small and Medium-sized Enterprises and Young CEOs summit has been held under the theme “Corporate Leadership Governance and Technology: Strong Pillars for Business Economic Growth.”

The purpose of the summit is to enable global and local innovative business owners to integrate and interact on issues regarding corporate governance, the future of the economy and viable ways to equip young entrepreneurs in advancing their startup businesses.

In his welcome address, the CEO of Network Ghana, Mr Ernest De-Graft Egyir, called for the need for effective corporate leadership and the adaptation of digital technologies in Ghanaian businesses to redefine the economy and also ensure that minimum standards are met by companies.

He disclosed that there has been low compliance to rules established by the Corporate Governance Code and stressed on the relevance of business owners in adhering to governance practices set in accordance with widely recognized international standards.

According to Mr. De-Graft Egyir, failure of individual shareholders to adapt policies that protect wider stakeholder interest is largely caused by the laissez-faire attitudes and a lack of proper engagement.

In addition to calling for an increased involvement of institutional investors towards shaping governance culture of local economies, the founder of Ghana CEO Summit suggested a 10-year SME Master Plan to “trigger major paradigm and structural shift towards an entrepreneurial economy.”

The major objectives of the plan include tackling key areas of sustainable SME development (e.g. infrastructure, regulation, improving SME competitiveness and growth, foster high growth potential as well as upgrade skills and job opportunities. The plan will also aim at improving design and value addition by supporting research.

“The Master Plan will be a gam echanger as it will enable the SME sector to make a quantum leap an dbecome a backbone to the economy. We seek through this platform to initiate and enhance existing transformation to grow our economy in a space of dialogue.”

Banking reforms leading to positive outcomes – BOG

Speaking on the growth of the economy at the summit, head of researcher at the Bank of Ghana, Mr Philip Abradu-Otoo emphasized the role of banks in national economic development, stating their primary function of mobilizing savings for investment purposes is critical and subsequently leads to growth and employment.

He said these roles are fundamental in ensuring a sound banking system through practice reforms. He added that the central bank occupies an inclusive supervisory role to tackle the complexities of financial transactions in the country.

In explaining the factors leading to the recent reforms in the banking sector, Mr. Abradu-Otoo said that the reforms are to meet the pace of expansion of the economy to provide for new opportunities.

“The reforms have been necessitated to strengthen the banking sector and place them in a position to support economic activity with the ultimate goal of competing with global players in fostering international trade activities.

He added that the recent state of some weak banks and their dissolution underscores the need for regular reforms in the sector.

“The reforms have also been necessitated to restore confidence and inject more sanity in the banking sector.”

According to Mr. Abradu-Otoo, the review of the gaps that led to the shutting down of the seven banks highlighted issues of weak corporate governance structures in banks, insufficient disclosure and transparency, the existence of critical gaps in the regulatory framework, outmoded regulations and poor supervision, as well as weak enforcement.

He disclosed that the Bank of Ghana is developing new directives to ensure that transparency and public disclosure requirements of transactions are advanced.

Speaking on the impact of the banking reforms, he announced that the banks in the country are bracing themselves to adapt best practices of corporate governance and risk management.

He urged banks and other financial institutions to embrace the digitization revolution to affect their business models.

“Digitization offers an opportunity for both banks and SMEs to exploit to the fullest maximum for economic gains. As digitization takes hold, the traditional ways of doing business is slowly giving way to digital trading and this is shifting the conduct of businesses into new territories.”