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Co-funded by the European Union

Creating healthy ecosystems for social entrepreneurs in Ghana and Ethiopia




We revisit two of our projects in Ghana and Ethiopia to see how our initial work carried out in 2021 has laid the foundations for positive outcomes and business reform.

 

In 2019, Sheila Elorm Enni was suddenly laid off from her job as a finance budget analyst in Ghana, a situation that left her devastated. However, less than four years later, Elorm Enni runs a thriving social enterprise, Whesoyy Company, selling nutritious breakfast cereals which help to combat malnutrition as they are affordable for poorer families. What’s more, the company is run with the aim of empowering local women – Elorm Enni buys from women smallholder farmers, and targets local women in need of jobs as employees.

 

Social enterprises – businesses that are for-profit but also address social issues – are growing rapidly in Ghana. Today, there are close to 120,000 social enterprises in the country, contributing more than US$3bn to Ghana’s GDP (4%) and employing approximately one million Ghanaian people. Just a few years ago, in 2016, the British Council estimated that there were only about 26,000, so their growth is phenomenal. 

 

Taking a lead in creating a healthy ecosystem, training social entrepreneurs and maximising their impact is Social Enterprise Ghana, an organisation with approximately 50 regional hubs and over 1,000 members. The membership has nearly doubled since 2021 and includes entrepreneurs such as Elorm Enni, who has benefited from training and mentorship. One of the organisation’s major goals is to catalyse $1bn of direct investment for social enterprises in Ghana by 2030.

Ghana's social enterprise eco-system

Like many countries around the world, there is no specific legal form or registration process for social enterprises in Ghana. Social Enterprise Ghana defines social enterprises as organisations that apply business strategies to achieve social and environmental goals. In effect, they define themselves according to their mission and vision. So, in the case of Whesoyy, the primary aim is to address malnutrition through selling affordable, nutritious cereals. At the same time, Whesoyy boosts Ghana’s food security by sourcing its products locally, and it aims to economically empower women, by purchasing from small scale women farmers and its employees are predominantly women, with the aim of lifting them out of poverty. Finally, the company invests in biodegradable packaging and production equipment that will last for a long time.

 

At the helm of Social Enterprise Ghana is Edwin Zu-Cudjoe, its executive director since 2019. 

“Across the landscape in Ghana we have seen a great deal of interest in the social enterprise ecosystem and, even much more so, businesses that are mainstreaming social and environmental economic issues, not just for profit but for impact,” he says. 

 

But social enterprises face obstacles. While the sector is emerging, there is still a lack of awareness about their role in the economy, even among government ministers. Additionally, it can be a struggle for these businesses to become sustainable, as they often find it hard to raise investment; banks, for example, charge high interest rates that are crippling. The lack of working capital makes it difficult to scale up, and social entrepreneurs are often overlooked in getting access to international markets and may not have the money to travel.

 

Against this backdrop, the pandemic added pressure to an already fragile ecosystem and many social enterprises failed. “They were hardest hit,” confirms Zu-Cudjoe from SE Ghana’s office in Accra. “Many are women-led entrepreneurs who are very young, or people with disabilities, and the communities that they serve with their products and services are the most vulnerable. Many of them don’t have the voice to engage various policymakers and stakeholders to support the work that they do.” According to SE Ghana’s latest research, roughly 46% of social enterprises are led by women while nearly 60% of the founders are under 35. 

Amplifying voices and mobilising capital

One of the purposes of SE Ghana is to advocate for members’ needs, an audience that is often excluded from government decision-making, but the organisation lacked the expertise to engage ministers effectively. Moreover, it needed more sustainable capital to be ambitious with some of its goals. These factors prompted director Zu-Cudjoe to ask the ICR Facility to provide technical assistance, time-limited support that has the aim of improving the business environment in ACP countries. 

 

“Membership-based organisations are set up to advocate for better business conditions for their members but if the evidence, tools and resources to enable them to do that are absent, they are not able to drive that advocacy for business reforms,” says Irene Danquah, the ICR specialist who led the technical assistance in Ghana in 2021. “The challenge is usually resources and when this isn’t tackled, the organisation dies out.”

 

The resources at SE Ghana when Zu-Cudjoe took over its leadership were minimal. He estimates that they only had capital of between $20-30k per annum from two external partners, a figure that didn’t allow them to undertake many projects or training, let alone realise more ambitious ideas. With the ICR Facility’s intervention, however, SE Ghana has developed a better income model, enabling it to mobilise $200,000 per annum and increase its partnerships by about 60%, including one project with the Mastercard Foundation. It has allowed the association to think further ahead. For example, it has plans to start an innovation fund that would attract more investment into the social enterprise ecosystem. 

 

But one of the biggest improvements is having a more influential voice in government and learning how to better advocate for change. SE Ghana has increased its regular engagement with the Ministry of Trade and Industry – with twice yearly formal meetings – and has a dialogue with several more departments. “I am proud that as a result of the support we have received from the ICR Facility, we have strengthened our public-private dialogue with other government agencies,” says Zu-Cudjoe.  

Taking a broad view

The executive director is hopeful that Ghana’s social enterprise policy, a paper to promote their growth and the potential of the sector, will be formally accepted by the government soon. It has undergone several revisions since the ICR Facility provided guidance for a new taskforce and worked on developing an action plan.

 

Zu-Cudjoe, however, says the process with the ICR Facility – which occurred in various stages and included research, workshops, training and consultations – has taught him to have a broader approach. “It’s not just about the social enterprise policy, but there are various other policies in the making where we could make our voices and the voices of social enterprises featured.” Some of these include having some input on a Ghana start-up bill, a corporate social responsibility bill and one for non-profit organisations.  

 

But it’s not just SE Ghana that’s benefited from this process. Social Enterprise Ethiopia (SEE), a sister organisation, also received technical assistance and was recently awarded several grants as a result of implementing a resource mobilisation strategy developed with the ICR Facility.      

 

Like SE Ghana, SEE had previously struggled to get government attention, but there is now a draft law in place to support the social enterprise sector, an outcome SEE has been campaigning for since 2018. CEO Adenew Mesfin calls it a “major accomplishment”. 

Supporting succesful entrepreneurs

Elorm Enni has diversified Whesoyy, adding eight new products and developing a five-year plan. Last year she raised $30,000 from a foreign investor, partly because of the training she received from SE Ghana. “I can now speak confidently,” she says. And this helps her to advocate for the women that her business aims to support. “I can speak about issues and can speak for women farmers seeking grant funding to be able to cultivate a bigger portion of their land,” the business owner says.   

 

She’s not the only one. Catherine Boafo founded Mawutwueni Ghana Ltd in 2019 when her daughter struggled to eat a balanced diet. She began her enterprise by adding nutritional value to cereals with raw materials originating in Africa and then selling these on for a small profit. Today she has four permanent staff members with a return of about 25% profit. Much of her business comes through regular trade shows and events that are organised through SE Ghana. She believes SE Ghana’s training has deepened her capacity and ambitions, and she’s since expanded the business from its initial focus on cereals to also supporting women-led and youth-led small businesses through training. By charging an affordable fee for this support, the enterprise is earning an income at the same time as fulfilling the social goals of supporting the economic empowerment of women and young people. 

 

“As a female entrepreneur, there’s a gap that hinges on inequality, lack of financial

access, lack of capacity building and special support programmes to enable women to match up to their male colleague entrepreneurs,” she explains. To address this imbalance, Mawutwueni has supported over 600 women-led and youth-led MSMEs by training them in business development skills, strategic management, entrepreneurship, and advocacy. 

Main findings of project


The ICR Facility advises other organisations supporting social enterprises and young entrepreneurs to think about five areas:
Address advocacy skills at all levels to amplify the voice of underrepresented groups; these skills can be used to effectively engage the government in reforms.
Connect with policymakers, relevant ministries and stakeholders.
Mobilise funding to become a more sustainable organisation that isn’t wholly reliant on small grants.
Use a research framework to assess the current state of the sector, and provide evidence to advocate for reforms or to implement certain policies.
Regularly monitor and evaluate activities to assess their impact.

Need more information? Find out all about our support for the Social Economy here. Find out whether you could qualify for the ICR Facility’s interventions for ACP countries. 

This publication is part of an intervention supported by the Investment Climate Reform (ICR) Facility. The ICR Facility is co-funded by the European Union (EU), the Organisation of African, Caribbean and Pacific States (OACPS) under the 11th European Development Fund (EDF), the German Federal Ministry for Economic Cooperation and Development (BMZ) and the British Council. The ICR Facility is implemented by GIZ, the British Council, Expertise France, and SNV. The contents of this publication are the sole responsibility of the author and do not necessarily reflect the views of the donors or the implementing partners.

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