Complex, overlapping regulations stifle MSMEs growth, fuel youth exodus

By Kingsley Webora TANKEH

Executive Director-Institute for Liberty and Policy Innovation (ILAPI), Peter Bismarck Kwofie, has revealed that the complex and overlapping regulatory environment is crippling micro-, small- and medium enterprises (MSMEs), maintaining that it contributes to the desperation of young Ghanaians to emigrate for greener pastures.

He contended that they would rather risk the perilous journey of getting to Europe or America than invest and grow businesses at home to support national development.

He made these comments at a High-Level Business Regulatory Dialogue organised by the Institute for Liberty and Policy Innovation (ILAPI) in collaboration with Enterprise Bureau. The event gathered government officials, regulators and private sector players to discuss ways of addressing the country’s regulatory bottlenecks and making the regime SME-friendly.

Speaking at the event, Mr. Kwofie, presented research data that show it can take an average of seven to 10 years for a  micro-enterprise in sectors like ICT, manufacturing, and tourism to transition into a small business – attributing this snail-paced growth to the country’s slow and costly regulatory regime.

He noted that overlapping regulatory institutional mandates further compound the situation.

In view of this, he said, the youth are willing to save for years or borrow close to                US$10,000 just to travel overseas.

“They prefer to travel overseas through connections and the dangerous Mediterranean Sea than invest in a business in Ghana. Why? Because they are afraid of losing close to 30 percent of their capital to regulatory requirements,” he explained.

The 10-month ILAPI study, conducted between 2024 and 2025, identified a host of systemic issues that plague the MSMEs sector. These include high compliance costs, overlapping mandates among government agencies, delays in licencing and granting permits and digital systems that fail to communicate with one another.

“These challenges weaken productivity, slow down investment inflows and could undermine Ghana’s ability to build a 24-hour economy or drive industrial transformation,” Mr. Kwofie warned.

While government touts the 24-hour economy as a trump-card for job creation, he argued that the regulatory environment remains hostile to business growth – questioning the viability of such a policy in a country that can exact “13 business operating certificates from a small manufacturing startup”.

The civil society leader therefore called for urgent reform, urging government to institutionalise regulatory impact assessments to help reduce adverse impacts on businesses.

He also urged government to strengthen coordination between agencies and ministries to create harmonised systems and move away from standalone digital platforms to integrated, interoperable systems that reduce rather than replicate bureaucracy.

Executive Director-Enterprise Bureau Anne Ethel Komlaga struck a similar chord, calling for deeper collaboration to improve the country’s business environment. “This is not just a conversation but also a chance to catalyse change within the business regulatory landscape,” she said, urging participants to engage fully in “promoting best practices that will maximise the chances of success for all businesses”.

Mr. Kwofie noted that the issue is a matter of national collective responsibility. “Business regulatory reform is not always the responsibility of only government. The private sector must speak, civil society must analyse, policymakers must listen and government must try to implement,” he urged, stating that “no nation becomes competitive by accident”.

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