External Environment and SMEs Investment in The Ghanaian Oil and Gas Sector

Abstract

There is the need to integrate SMEs into the high-value Oil and Gas Sector to enhance socio-economic development of Ghana particularly Job creation and Gross Domestic Product (GDP) growth.This study examined the impact of external business environment on SMEs willingness to invest in the Ghanaian oil and Gas Sector.Using binomial logistic regression analysis we analyzed primary data from 245 SMEs from Ghana during the periods between 2015-2016.The study found that SMEs that had ready access to finance, reliable electrical supply, required technical qualification, no competition from foreign companies, well informed on Oil and Gas investment opportunity were more likely to invest in Ghanaian oil and gas sector.We also find that corruption perception, political stability and training support in the capacity building had no significant influence on SMEs willingness to invest.We suggest that future studies should cover internal firm factors, perceived barriers as well as macro-level factors.Also, the study was limited to Ghanaian SMEs, future researchers may replicate this study in other oil-producing countries in Africa including; Nigeria, Uganda, Angola and South Africa.

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