SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN THEDEVELOPMENT OF TOURISM IN THE GLOBAL SOUTH : THEIR ROLE AND CHALLENGES

Abstract: The tourism industry in many parts of the world is highly developed and this is attributed to the influx and fast growing of Small and Medium Enterprises (SMEs) operations in the sector. However, there seems to be paucity of studies on Small and Medium Scale Enterprises in the development of tourism in Africa in general and Ghana in particular. This research seeks to bridge this knowledge gap by examining the role and challenges of Small and Medium Scale Enterprises (SMEs) operation in the tourism sector of the Central Region of Ghana (Cape Coast). The research gathered data from both secondary and primary sources and used the qualitative research method approach. The key instruments used for the data collection were interview guides, focus group discussion guide and observation checklist. A total of thirty (30) participants who are Small and Medium Scale Enterprises (SMEs) owners operating in the tourism industry in the Central Region of Ghana (Cape Coast) took part in the study. The sampling technique employed in the selection of the participants of the study was purposive sampling technique. It emerged from the study that the main challenges that Small and Medium Scale Enterprises (SMEs) operators face in the tourism sector of the Central Region of Ghana (Cape Coast) were low patronage, financial constraints, high competition for limited customers, low prices provide to customers, high government tax and high interest rate charges from financial institutions that provide loans for Small and Medium Scale Enterprises (SMEs) to operate. The study also found that Small and Medium Scale Enterprises operators surviveby adopting livelihood strategies such as being innovative, practicing international standards, and relying on saving and loan culture. The study recommends that the government of Ghana through the Ministry of Tourism, Arts and Culture and Ministry of Local Government and Rural Development, Non-Governmental Organizations, financial institutions and civil society groups should provide financial support and an enabling environment for Small and Medium Scale Enterprises owners to operate effectively and efficiently in the tourism industry thereby ensuring sustainable tourism development towards the socio-economic development of Ghana.