Why Succession Planning Is Missing in Ghanaian SMEs

Introduction

Across Ghana’s business landscape, small and medium enterprises (SMEs) are the true engines of the economy — creating jobs, fostering innovation, and contributing significantly to GDP. Yet beneath the surface of entrepreneurial success lies an uncomfortable truth: most Ghanaian SMEs are not built to outlive their founders.

From Adum to Osu, Asafo to East Legon, many thriving family businesses collapse within months or years after the death or retirement of their founders. The absence of succession planning — a deliberate strategy to ensure leadership continuity — remains one of the most overlooked aspects of business sustainability in Ghana.

In a 2025 Accra Business News survey, nearly 82% of SME owners admitted they had no formal succession plan. Only a fraction had identified or trained successors. According to SKB Journal, this lack of planning has led to the quiet demise of several once-promising enterprises across trade, hospitality, and manufacturing sectors.

1. The Founder Dependency Trap

Ghanaian SMEs often begin as sole proprietorships — built from the grit and charisma of the founder. While this drives early growth, it also breeds dependency.

Accra Street Journal observed in its July 2025 feature on SME leadership that:

“The average Ghanaian entrepreneur builds a business around themselves, not a system. When the founder is absent, the business loses direction.”

Founders typically oversee sales, finance, operations, and even marketing personally. Employees become executors, not decision-makers. The result? A leadership vacuum the moment the founder steps aside.

Without documented processes or delegated authority, many businesses find themselves unable to function independently — leading to sharp decline during transitions.

2. Cultural Attitudes Toward Ownership and Legacy

Succession planning requires foresight — but in Ghana, conversations about inheritance or post-founder leadership often clash with cultural sensitivities.

In traditional settings, discussing succession is equated with inviting misfortune or implying mortality. As a result, many founders postpone or avoid the discussion entirely.

According to SKB Journal’s “Family Enterprise Outlook 2024”, more than 70% of Ghanaian family businesses do not involve the next generation in management decisions.

“Most founders assume their children will automatically take over,” said business development consultant Ama Adjei, speaking to Accra Business News. “But management competence doesn’t transfer by bloodline.”

This misplaced confidence — that family succession will somehow happen organically — leads to confusion, rivalry, or total collapse when transitions occur abruptly.

3. Absence of Governance and Documentation

Strong governance is the foundation of succession. Yet Ghana’s SMEs often operate informally, without formal boards, constitutions, or performance frameworks.

Many businesses lack even basic documentation — job descriptions, policies, or audited accounts. Without these, identifying and grooming successors becomes impossible.

As Accra Business News reported in its August 2025 “SME Structure Index”, only 15% of small businesses maintain documented operational manuals. The rest rely on memory and trust.

In contrast, SMEs in countries like South Africa and Kenya have embraced structured governance frameworks, supported by training programs from chambers of commerce and private sector alliances. Ghanaian firms remain largely personality-driven.

4. Fear of Losing Control

Another obstacle is psychological — founders’ reluctance to relinquish authority. For many entrepreneurs, their business is not just a company but an identity.

Handing over control, even partially, feels like losing power or relevance. This sentiment often leads to micromanagement or exclusion of potential successors from decision-making.

In an Accra Street Journal interview, a veteran Kumasi retailer confessed, “I’ve trained my nephew for years, but I still can’t let him handle the accounts. I don’t want him to make mistakes that will undo my legacy.”

But as SKB Journal notes, the refusal to delegate in the short term often guarantees disaster in the long term. Without trust and mentorship, no continuity can exist.

5. Lack of Capacity and Talent Development

Succession planning is not only about naming a successor — it’s about preparing one. Unfortunately, most SMEs in Ghana lack formal training programs or career pathways for staff development.

When asked in an Accra Business News study why they hadn’t developed successors, 64% of SME owners cited “lack of qualified personnel”. But analysts argue this reflects the failure of founders to invest in staff growth.

As one business columnist at Accra Street Journal wrote,

“You cannot find ready successors if you have not built leaders internally. Succession is the harvest of mentorship.”

Ghanaian SMEs that do succeed in transition — such as long-standing retail chains and agro-processing firms — have one thing in common: deliberate grooming of managers through shared leadership and incremental responsibility.

6. Financial Opacity and Family Conflicts

Family-run enterprises, which dominate Ghana’s SME landscape, are particularly vulnerable to leadership disputes. When founders die without clear instructions or legal documentation, succession becomes a battlefield.

In some cases, spouses, children, and relatives fight over ownership, leading to prolonged court battles. Meanwhile, the business bleeds.

According to SKB Journal, unresolved family disputes account for nearly 40% of SME collapses within five years of founder exit.

Proper corporate structure — including shareholding agreements, wills, and documented succession plans — could mitigate these crises. Unfortunately, many founders delay formalisation until it’s too late.

7. Policy and Institutional Gaps

Government institutions such as the Ghana Enterprises Agency (GEA) and NBSSI have introduced entrepreneurship programs, but few focus specifically on succession planning.

As Accra Business News highlighted in its “Enterprise Lifespan Report”, Ghana lacks policy incentives that encourage founders to institutionalize business governance.

Banks also seldom assess succession plans in their SME lending criteria, even though continuity risks affect repayment. Introducing such requirements could push more SMEs to formalize their leadership structures.

8. Towards Sustainable Succession — The Way Forward

If Ghana is to build globally competitive indigenous enterprises, business continuity must become a national priority.

Here are key recommendations drawn from expert reports by Accra Business News, SKB Journal, and Accra Street Journal:

1. Institutionalize Corporate Governance – Every SME, no matter how small, should have a management structure, regular audits, and basic documentation.

2. Create Leadership Pipelines – Identify, mentor, and empower future leaders early. This includes family members and trusted employees.

3. Adopt Legal Frameworks – Draft wills, partnership deeds, and shareholder agreements to avoid posthumous disputes.

4. Train for Transition – Institutions like GEA and AGI should integrate succession management modules into SME capacity programs.

5. Change the Culture of Silence – Normalize conversations about business continuity. Succession planning should be seen as strategic foresight, not a death wish.

6. Leverage External Boards – Bringing independent directors or advisors can inject objectivity and guide smooth transitions.

Accra Business News columnist Ernest K. Ofori summed it best:

“The greatest gift a founder can give their business is the ability to succeed without them.”

9. The Cost of Doing Nothing

When succession planning fails, the costs ripple across the economy — job losses, broken supply chains, and diminished investor confidence.

SKB Journal estimates that Ghana loses nearly GHS 2 billion annually in potential GDP contributions due to the premature collapse of family businesses.

Beyond economics, each failed succession represents a lost legacy — years of hard work erased by a lack of planning.

10. Building Businesses That Outlive Founders

True entrepreneurship is not about owning a business — it’s about building an institution.

If Ghana’s SMEs are to sustain their contributions to employment and GDP, founders must start thinking beyond their own tenure.

As Accra Street Journal noted in its 2025 “Legacy Edition”, “A lasting business is not built on personality, but on process, people, and planning.”

Succession planning, therefore, is not a luxury for large corporations — it’s a lifeline for every serious Ghanaian entrepreneur.

FAQ

Q1. What is succession planning?
It’s the process of identifying and developing new leaders to replace old ones when they leave or retire, ensuring continuity and stability.

Q2. Why do most Ghanaian SMEs lack succession plans?
Due to founder dependency, cultural taboos, lack of documentation, and fear of losing control.

Q3. Can non-family members inherit leadership roles in Ghanaian businesses?
Yes. Professional managers can be appointed if family members are unprepared or uninterested.

Q4. What are the risks of not having a succession plan?
Business collapse, leadership disputes, and loss of generational wealth.

Q5. How can the government help?
By incorporating governance and succession planning into SME development programs and financial assessments.

Source: Accra Business News