Indigenous risk management practices and their effects on small agribusiness firm growth amid economic crisis in Ghana

This paper estimates the effect of indigenous risk management practices (used by entrepreneurs) on small firm growth amid the current economic crisis in Ghana. The paper hypothesizes that indigenous risk management practices positively affect the growth of informal micro and small agri-food processing firms during the current economic crisis in Ghana. Cross–sectional and limited panel data (covering four years – from the end of 2019 to the end of 2022) have been used in the analysis. Firm Growth has been estimated using sales volume and the number of employees. Findings indicate that apart from savings for business purposes as an indigenous risk management strategy, diversification of economic activities, subscription to formal insurance, forward contracting, cooperative marketing, borrowing, sale of assets, and temporary wage employment outside the business exert a positive influence on small firm growth in terms of sales. Subscription to formal insurance and temporary wages outside the entrepreneur's business positively influence firm growth as related to growth in employee size. We recommend that policymakers design and implement policies that initiate and facilitate the development of marketing cooperatives to negotiate fair prices. This essential tool can help mitigate marketing risks to the agri-food processing entrepreneur. The police should facilitate rolling out skills development programs to increase entrepreneurs' capacities in forward contracting arrangements. Again, entrepreneurs of agri-food processing firms in the wider Ghanaian population should be educated on the need to subscribe to formal insurance to insulate them in times of property loss or personal accidents.