Promotion of Small Scale Industries for District Development: the Case of Atwima District

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Atwima district is one of the 110 districts of Ghana established to implement the national decentralized development strategy. It is characterized by the presence of unemployed and/or under-employed labor force, low level of income and a spatial economy dominated by agriculture. One way of solving such imbalances is through the development of small scale industries. However, the level of development of such industries is particularly low. In 1996, industries contributed only two percent of the district’s employment. Several factors, such as availability of raw materials, finance, adequacy of product market, competition from other industries, level of managerial and technical skills, government policy, etc., impact on the development of such industries. Having this in mind, this study aimed to assess such factors in the target district with the ultimate intention of identifying potentials for development of the industries, bottlenecks preventing their development and coming up with recommendations for successful promotion of the industries. To realize these objectives, assessment was made with respect to strengths and weaknesses of the industries, which are internal factors and opportunities for and threats to expansion of these industries, which are external factors. The assessment was done in line with the factors influencing the development of the industries. Data regarding these factors were collected from primary and secondary sources to know the extent of the problems and the potentials. Multi-stage sampling was used to identify industries for interview. The study has enabled the identification of the following major problems: unavailability of inputs all the time, inadequate supply sources and increased price of inputs; limited market area and low demand for products; limited channels for marketing of products; absence of established producer-consumer network in marketing of products; high level of competition among industries in the district; limited access to credit due to lack of collateral, high interest rate and unfavorable bank regulations; inadequate physical and social infrastructure which characterizes the district; weak collaboration and coordination between institutions involved in the development of the industries; inability to utilize the capacity of the district due to raw material shortage and low demand for products; lack of adequate work space; lack of experience in business. The following potentials were also identified: relatively young age of entrepreneurs, which makes the task of promotion easier since the youth are more receptive to new ideas; the existence of supplier-producer network; the rapidly increasing population of the district; the existence of institutions involved in the development of small scale industries; the nearness of the district to Kumasi, which act as a place where the entrepreneurs can purchase raw materials. Provided that the industries are competitive, it can also be a potential market for the products of the industries. To solve the above problems and ensure the development of the industries, the study has came up with the following recommendation: • creation of an enabling, environment by strengthening the institutional setting, through, among other things the establishment of a committee at district level; • action aimed at improving accessibility to finance through, among other things. the use of group lending method; • improvement in input delivery system through such mechanisms as: organization of enterprises into groups, ensuring credit availability and provision of storage facilities; • improvement of the level of development of infrastructure • improvement of the level of technology in use by putting in place such mechanisms as popularization of existing technologies through increased extension work and development of cooperatives; • improvement in marketing network through such mechanisms as the improvement of transportation network and organization of industries into marketing cooperatives; • improvement in the level of demand through actions aimed at raising the level of income of the potential consumers: • development of cooperatives • strengthening technical and managerial capabilities through training; • enhancement of information dissemination. It is believed that the implementation of the above mentioned proposals will bring about the development of small scale industries in the district.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of the Degree of Master of Science in Development Planning and Management, 1998