Promotion of Local and Regional Economic Development through Business Climate Surveys

1. Promotion of Local and Regional Economic DevelopmentthroughBusiness Climate Surveys Experiences of the „Rural Trade and Industry Promotion Project“ in Ghana (future LRED component of the programme on sustainable economic development) By Anya Schmidt (DED) and Gertraud Faltermeier (GTZ)

2. Structure: • Public - private dialogue in Ghana • Local and Regional Economic Development supported by RUTIPP • RUTIPP’s objectives of Local and Regional Business Climate Surveys • Experiences in practical implementation • Lessons learnt • Way forward

3. Public - private dialogue in Ghana • Existing forum on private – public dialogue concentrate on national level and mainly consider medium and large scale enterprises operating in the metropolitans • Constraints and potentials of micro and small – scale entrepreneurs operating at local and regional level are hardly reflected, although Government of Ghana (GoG) stresses the importance of rural entrepreneurs and regional investment for economic development

4. 2. Local and Regional Economic Development supported by RUTIPP • Decentralized administrative structures of the GoG lack capacities for LRED and an operational forum for private – public dialogue is not in existence in most districts • RUTIPP introduces participatory approaches for LRED, kicking off public - private dialogue at local level

5. 3. RUTIPP’s objectives of Local and Regional Business Climate Surveys: • Strengthen local private sector and its associations • Strengthen communication and cooperation in the newly set –up public - private forums at district level • Assist district assemblies in the strategic planning for LRED • Promote local and regional investment • Feed back local experiences to national level (implementation of Private Sector Development Strategy)

6. 4. Experiences in practical implementation • Sensitization of private sector associations is an important pre-condition for the success of climate surveys at local level • Understanding of the necessity for the dialogue is not sufficient; private and public sector must show real commitment and take over responsibility • There must be a clear objective on how to use the results of the survey before start of the exercise (e.g. climate versus investment survey) • Time to elaborate a significant questionnaire (it is not advisable to use standardized models) and implement the survey should not be underestimated • Private sector representatives of the district/ region should be involved in the development of the questionnaire • Local/ regional expertise is required for the analysis and interpretation of the results • Private sector has to be involved in all steps of the survey otherwise ownership of private sector may be lost • Risk of negative impact should be taken into account!

7. 5. Lessons learnt Local associations are too weak to sustainably manage (and own) local business climate surveys. National umbrella organizations of the private sector have to take over part of the ownership of regional and local surveys. This facilitates the link between local, regional and national level of private sector associations.

8. 5. Lessons learnt Business Climate Surveys could be an important instrument for the promotion of regional investments; their effectiveness and usefulness for the promotion of local investment and local economic development is limited due to the marginalization and economic potential of most local/ rural districts in Ghana

9. 5. Lessons learnt Business Climate Surveys have to be adjusted to the locality and scale of entrepreneurs; otherwise results may be too general and not useful for regional and local economic development

10. 6. Way forward • Test Business Climate Survey as instrument on regional level and for micro entrepreneurs • Strengthen ownership of private sector, but ensure cooperation of public sector • Strengthen link between national, regional and local level of private sector associations

11. Thank you very much for your attention!