Doing good and making money (PART 2)

By Prof. Ernest Ofori Asamoah

Social Enterprise in Ghana

Social enterprise is an organization that applies business strategy and practices to achieve social and environmental goals (The Draft Social Enterprise Policy in Ghana). The organization should be able to produce measurable social and environmental impact first before profit considerations.

It may have the following features as depicted.

SOCIAL IMPACT

There is no special legal form for social enterprises in Ghana. You can find social enterprises that are registered as company limited by shares, company limited by guarantee, partnerships, cooperatives, voluntary associations, and trusts. Thus, it is not advisable to identify a social enterprise in Ghana just by its legal form.

 Contribution of Social Enterprise in Ghana According to State of Agribusiness Social in Ghana Report in 2023, it is estimated that there are 115,500 Social Enterprises in Ghana as which constitutes a Social Enterprise prevalence rate of 5.5% of the Ghanaian MSME sector.

This research by Social Enterprise Ghana estimate that social enterprises in Ghana employ c808, 500 people directly, which constitutes 3.4% of total employment in the country based on an estimated 13.4 million workforce in the country.

It is instructive to note that on average, each social enterprise creates employment opportunities for four (4) to six (6) people with 80% of them being youth. The SE sector contributes approximately GHS 23.1 billion (USD$ 2.6 billion) to the Ghanaian economy representing 3.35% of the Gross Domestic Product (GDP) of the country.

Based on previous studies, it means the social enterprise sector grew by an average of 8.4% annually and creates an average of 80,000 jobs annually of which more than 80% of the people social enterprise employ are youth.

The focus of social enterprises are as follows;

Conclusion

There are three key attributes that generally define a social enterprise. These are the objectives, entrepreneurship and governance of the business.

There is no distinct legal form or registration process for social enterprises under Ghanaian Law.

There is an urgent need for the Social Enterprise Policy in Ghana. This has the potential to increase investment in the sector and enhance its contribution from the current USD 2.6 billion (3.35%) of   GDP to USD 5 billion annually based on available research.

The Social enterprises have a challenge of funding which could partly be solved through the establishment of a Social Enterprise and Innovation Fund that could serve as an incentive for innovation and social entrepreneurship.

The numerous social and environmental challenges such as climate change, youth unemployment, waste management and food security could better be tackled with support from the Fund.

– Writer’s email: eoforiasamoah@gmail.com