The effect of the cedi depreciation on small and medium scale enterprise in Ghana (a case study of small-scale importers in Kumasi)

Abstract

The research study seeks to examine the effects of cedi depreciation on the activities of small scale businesses in the country. The aim of the research is to examine the impact of cedi depreciation on imports, income, size and the growth and performance of the small scale industries. In addition the research work aims at finding out the extent to which small scale businesses depend on imports. SMEs found in some selected localities in Kumasi Metropolis are used. Literatures were reviewed theoretically and empirically. Data collected were analyzed with the help of Statistical Package for Social Scientists (SPSS). The survey conducted on a total of 150 respondents out of which 145 responses were received representing 97.67% response rate. The results have proved that there is a negative relationship between values of depreciation and the volumes of goods imports, the income of the businesses and the size. It was found out that SMEs in Ghana presents almost 100% dependency on imports. The study will inform the operators of the industries on the dangers of huge values of depreciation. This will help the managers to take better decisions on the quantity of goods imported, the number of workers and the income of the businesses. I will also recommend to other researchers that a further study can be conducted about the impacts of the cedi depreciation on job creation in the country. Also, a similar study can be conducted about the effects of cedi depreciation on the medium and large scale businesses and their performances in Ghana.