Abstract:
Trade liberalization policy was analyzed to examine its effects on performance of Small and Medium Scale (SMS) food processing enterprises located in the Greater Accra Region of Ghana from 1970- 2003. Thirty-three SMS food processing companies were purposively sampled, and the results show a U-shaped trend in the number of registered firms, overall growth rate of 4.3% in the number of food processors, a negative growth rate of 1.8% between 1970 and 1982 and a positive growth rate of 15.3% between 1983 and 2003. Processing of fruits and vegetables was the most common venture, with 49% being limited liability companies producing mainly for the domestic market. The majority of food processors (94%) were established after the introduction of trade liberalization policy in 1983, and about 67% sourced raw materials locally and 55% financed businesses from own savings and profits. The trade liberalization policy had a positive effect on the output growth of SMS food processing companies. Capital was identified as the major constraint affecting growth of food processors, but the provision of tax relief; lower import tariff and financial support would enhance competitiveness of the processors.