Strategies for strengthening spatial linkages of small scale industries for district development

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One of the post-independence development strategies adopted by most African countries like Ghana was the import substitute industrialization strategy. Under this strategy, large scale manufacturing industries were established, while the promotion of small scale industries was neglected. As a result of this, the spatial distribution of these industries tends to be skewed in favour of urban centres. This can be seen by the dominance of the so called “golden triangle” (The Greater Accra-Tema/Takoradi- Kumasi) in the industrial sector of the economy. This has led to the concentration of many entrepreneurs (who should have helped in establishing industries in the rural areas) in the urban centres, where they are assured of foreign exchange, more competitive market and government support Thus, the rural areas remain isolated not only in terms of industrial establishment but also infrastructural development as well. The industries present in rural areas are scattered all over, with little or no coordination. The study has attempted to identify the spatial linkages existing in small scale industries in the Krachi District, their problems, constraints and potentials. Information for the study was collected by administering questionnaire in a field survey, and informal discussions with some entrepreneurs. The survey covered 10 per cent of a total of 804 small scale industries identified in the nine settlements selected for the study. The study in general found out that the spatial linkages were stronger internally (within the district) than externally (outside the district). However, the strength of the linkages varied from one variable tested to another. For example, in connection with the source of capital, labour and raw materials, there were stronger internal linkages. Only a few industries like carpentry, dressmaking had strong external linkages in connection with the supply of raw materials. Secondly, except for the products of the gari processing, and fish smoking industries, the finished products of small scale industries in the district were disposed internally This meant that the market for these products was restricted and therefore offered little scope for competitive production. . However, in connection with the supply of tools and equipment, the linkages were stronger externally (outside district) This meant an outflow of working capital Social and economic linkages in terms of the acquisition of initial and working capitals were mainly internal, especially among family members and customers. Information linkages were stronger among entrepreneurs and with relative living outside the district Enterpreneurs reported having lots of problems especially those problems connected with spatial linkages namely: had roads, high cost of transportation, unavailability of financial Institutions In the district. Some potential, which if well utilized and or developed would enhance the strengthening of spatial linkages, were identified. These included the presence of many small scale industries in the district, the presence of many periodic markets, the presence of the lake as a source of fish for the fish smoking industry, the presence of large labour pool, the presence of clay deposits and vast uncultivated land. Among the constraints identified were: the formation of the Volta Lake that has virtually cut off the district from the major southern urban centres the low level of professionally qualified entrepreneurs, the one-man nature of the industries and the long distance to the source of raw material. The strategies suggested strengthening the spatial linkages of small scale industries in the district included: the establishment by the district assembly of two important organs namely: the District Planning Coordinating Unit (DPCU) and the Industry and Trade Department. This two form the base for strengthening the spatial linkages by providing the technical know-how to the entrepreneurs. provide frequent training facilities; support the three vocational and technical schools in the district. These will improve the standards of the entrepreneurs and can therefore be in position to inject innovations into their industries. To strengthen the physical linkages, it was suggested that the district assembly, gives more logistical support to the Department of Feeder Roads, so that roads could be improved. In connection with the improvement of the lake transport system, it was suggested that concerted efforts be put together by the three districts namely: Krachi, Gonja East and Sene . The rehabilitation of the Rural Agricultural Bank at Kete-Krachi and the construction of one at either Dambai or Chinderi were suggested as a strategy for strengthening financial institutions in the district. Co-ordination of the many periodic markets in the district so that entrepreneurs can have wider markets for their products.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the award of the Degree of Master of Science in Development Planning and Management, 1995