Youth Entrepreneurship in Auto Spare Parts Sales and Repair Service in Accra, Ghana

Abstract

Unemployment is a major development challenge of Ghana and that of other countries in the global south. In Ghana, this situation has been worsened by rapid urbanization experienced by the country in recent decades but without substantial expansion of job opportunities despite the general success of the economic liberalization policies pursued by Ghana since the middle of the 1980s. The youth are the hardest hit by the unemployment challenge and yet the cities continue to be a major attraction for migrants, especially the youth in search of employment there. Most of the youth end up operating within the informal economy either working for others or setting up and operating their own enterprises. Much of the work of the youth is entrepreneurial in nature and entrepreneurship is seen, all over the world, as panacea for addressing youth unemployment and for economic development. The widely shared view is that encouraging and facilitating business start up by young  people provide them with the opportunity to enter the labour market through self-employment. Yet this has been downplayed in Africa partly due to the fact that specific research into the field of youth entrepreneurship in the African context is limited or non-existent. In Ghana, though the youth unemployment challenge has featured prominently in various government and non-governmental policies and programmes, their implementation has not had the desired impact. The formulation of policies and programmes to facilitate youth entrepreneurship has not been informed by   research findings in view of the limited knowledge generated by research about youth entrepreneurship. This study was meant to contribute to filling that knowledge gap regarding youth entrepreneurship in Ghana in order to aid in the formulation of appropriate policies and programmes for enhancing youth entrepreneurship in the country. It is also to contribute to the literature on youth entrepreneurship in Ghana through a case study approach. A feature of the urban informal economy in developing countries is the spontaneously developed industrial/business clusters of mostly micro, small and medium scale enterprises (MSMEs) in manufacturing, repair services and commercial activities, including sale of vehicle spare parts and accessories. The study reported in this paper was an exploratory one borne out of the need to explore the nature of youth entrepreneurship in the various subsectors of the urban informal economy, the type of businesses and how the youth run their businesses, how their businesses have fared, the challenges encountered, their business plans and how they perceive the future of their businesses. It was towards addressing these and other issues that the study was targeted at youth entrepreneurship in the auto-repair and the sale of spare parts. Field work was undertaken in three of the well known informal business clusters in the city of Accra, each specialized in specific aspect of the automobile industry- repairs, sale of spare parts and sale of scrap vehicle parts. Using a stratified random sampling technique, 427 respondents were covered in a questionnaire survey. Three focus group discussions (FGDs) were organised, one in each of the clusters, of master craftsmen and union leaders as well as key informant interviews and in-depth interviews of two apprentices were also undertaken. The results of the analysis of the data show that there are positive signs for youth entrepreneurship in the auto sector of the urban economy and these positive signs ought to be enhanced and translated into action for supporting youth entrepreneurship by addressing the challenges confronting operators in the sector. It is also recommended that further studies need to be carried out on each of the areas of key challenges identified in this paper for the formulation and implementation of appropriate policies and programmes to support youth entrepreneurship in the auto and related economic sectors of Ghana.

Keywords: youth, unemployment, entrepreneurship, informal economy, auto repair and spare parts