The role of the banking sector in promoting small scale timber firms: a case study of Kumasi

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
1. General Overview of the Timber Industry in Ghana: Ghana like other developing countries is characterised by low level of technology, high population growth rate, lack of expertise and so on. Ghana depends largely on her primary products such as minerals, timber, crops and livestock for generating income through their exploitation for exports as well as for meeting local demand. The importance of forest products such as timber cannot be over emphasized. For example wood is used as a framework for construction or for building houses, ships, cars and for making paper and furniture as well as for fuel. The market structure of the timber industry is relatively a perfect competitive one in terms of the numerous small firms which are nearly of equal sizes and a few large firms that provide about one-third of total supply. Exit and entry into the industry are also free. Almost all firms in the industry are export oriented. However, producer prices are administered by the Timber Export Development Board (TEDB). Thus, the highest and the lowest prices of all species of timber are fixed or quoted by the board. However, firms can sell above the highest price but cannot sell below the lowest price, Increasing sales depends on the number of contracts a firm wins, and this entails a lot of canvassing in the international market. Only the few large firms in the industry with the means are able to sponsor their personnel to the external market to undertake aggressive sales promotion in a bid to get more contracts. The small firms unlike their larger counterparts are not able to avail themselves of this opportunity because of financial constraints. They therefore face acute marketing problems. This has hindered most of them from expanding and taking advantage of economies of scale. This has also necessitated the demand for financial support to enable them penetrate the international market.
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 Postgraduate Diploma in Industrial Management, 1996