Towards people-centred support for SMEs

Research by Finscope in 2012 shows that Zimbabwe has 2,8 million SMEs and still growing

Research by Finscope in 2012 shows that Zimbabwe has 2,8 million SMEs and still growing

Hon. Sithembiso G. G. Nyoni Special Correspondent

The ministry firmly believes in the capacity of the people of this country in achieving greater things with Government providing the enabling environment. We believe in action hence our desire to talk to players and develop policies that address their needs.

MANY times when we talk of economic development in Zimbabwe, the discussion veers off towards visions and contemplation of huge factories, billion dollar mining investments, hyper shops and towering buildings in our town centres. Yet what we need to learn and appreciate is that the big and billion dollar investors in mining, property and technology sector started as informal, small and medium enterprises.

They now come to Zimbabwe to make money and expand the small companies they would have started. For example, Facebook and Apple started as informal and small enterprises that received support in various ways to grow into international giants.

In essence an acknowledgement of the role of the informal, small to medium enterprises sector is the starting point towards inclusive economic development and growth. Without this acknowledgement we will continue to wish for outside help while ignoring the potential that we have, and our strengths. It is what we have as a people that will form the basis or our future development as we can control and leverage on that.

With this in mind the Ministry of Small and Medium Enterprises and Co-operative Development (MSMECD) has embarked on a people-centred research and policy development process that will lead to increased pace of formalisation of the informal, small and medium enterprises aimed at enhancing competitiveness, efficiency and effectiveness of the sector.

The objectives of the consultations and research are to:

Enhance the competitiveness, efficiency and effectiveness of the sector.

To build the sector from an understanding of the players hence come up with relevant policies.

Appreciate the status and challenges of the sector hence review and tailor make policies to work for the SMEs sector.

The starting point to work and partner SMEs is to understand who they are, what they do, their interest, challenges they are facing, and which areas they need Government and other stakeholder intervention. Instead of imposing policies, make judgments and take unilateral positions, the MSMECD has opted to reach out to the people on the ground in their various formations and descriptions. This process will involve consultative meetings in major towns such as Mutare, Masvingo, Bulawayo and Harare.

The ministry will engage the SMEs chambers SME business associations to mobilise members and non-members to participate in sharing their views. In this regard the ministry is putting emphasis on the quality of the work to be done hence the engagement of a professional research firm to carry out this task with the guidance of parent ministry.

Many people may ask, why now and what is the purpose of this research. The view of the ministry and as always as led by the visionary leadership of His Excellency the President R. G. Mugabe, is to develop a people-centred policy framework. The ministry recognises that SMEs are the economy of Zimbabwe and that the majority of our people are living and employed in the SMEs sector. It is the SMEs sector that cushioned us in the difficult 2004-2009 period and it is the same sector that continues to cushion many millions.

Research by Finscope in 2012 shows that Zimbabwe has 2,8 million SMEs and still growing. In essence, if an SME establishment employs two people, then the SME sector is employing a minimum of 5,6 million people and with a potential of sustaining as many households.

The ministry wants to get to the bottom of the capacity of the status of the sector, establish needs and develop programmes to support the sector. The SMEs Ministry wants to take a lead in redefining our own economy based on the reality on the ground, and in that giving hope to as many young people who can sow the seeds of Zimbabwe’s own versions of the Googles and Facebooks of this world.

For this reason we are defining formalisation of the SMEs NOT as an imposition of any rules or regulatory measures but as recognition of the economic role that this sector is playing, with a view of boosting capacity, growth and contribution to the economy. The benefits of formalisation are as follows:

Infrastructure development for the SMEs, looking at working spaces, access to energy, water and other industrial or workplace needs.

Sustainable decent jobs that is looking at how the sector can maintain a demand for its work as well as quality of the products while working is safe environments.

Access to Government tenders ,that is, can the SMEs sector also bid and successfully do contracts with Government. For this to be achieved, such SMEs need to be registered and need to demonstrate capacity to handle bid jobs.

Backward and forward linkages with big industries either for supply of raw materials to industry and vice versa, skills transfer and investment in SMEs for growth and expansion.

Visibility that is how can SMEs improve on their marketing and publicity skills, can a good product produced in Gwanda be known and sold in Harare and can a Bindura SME open a market for its products in Bulawayo and Mutare?

The formalisation process will explore which technology is appropriate for the SMEs sector and who can we partner to develop such technical knowhow.

Taxation, company registration, labour laws and by-laws among others will be looked at with a view of making policies work for the SMEs. Where there is need for review and streamlining the ministry will engage relevant ministries and departments towards making policy advance the cause of SMEs

Formalisation will focus on infrastructure, labour by-laws, taxation, technology, working space, financing, and networking, all necessary to propel the SMEs in Zimbabwe. Key questions to be asked are what informal issues are impeding growth, which policies to be factored into taxation, labour and access to financing.

The SMEs Ministry wants to see rules working for the sector. In consideration of the above, there is engagement of other line ministries, Government departments such as the Registrar of Companies, tax authorities, local authorities, traditional leaders and the banking sector, among others. The vision of the ministry is a streamlined approach to doing business for the informal, small and medium enterprises aimed at supporting growth, professionalism, access to financing, management capacity, improvement in quality of goods and access to markets.

The ministry is focused on the simplification of laws so that the informal, small and medium enterprises can realise sustainable growth. We don’t want to see stagnation of small enterprises over a long period but that there be either growth in production or growth in quality and management. Small and medium business sectors have to graduate into competitive established companies taking over regional and international players. This process of research and policy formulation is part of a vision to support and incubate businesses that develop into big players.

The ministry firmly believes in the capacity of the people of this country in achieving greater things with Government providing the enabling environment. We believe in action hence our desire to talk to players and develop policies that address their needs.

It is this support that will enable our small and medium businesses to access regional and international markets and benefit from Preferential Trade Agreements that we are signatory to. For this to happen there is need for registration processes as well as quality validation of products.

Key steps that the ministry has taken to initiate the formalisation process include a validation workshop with key SMEs players that include representatives of SMEs and ministries, captains of industry and agencies. This is with a view that we all start from the same page and have a shared vision on supporting the informal, small and medium enterprises.

The informal sector can be micro, small, medium or larger and the aim in all this is to reduce informality. It is in the interests of all that the sector grows and maintains its position as economic drivers. The ongoing stage is fieldwork focused on consultations. The next stage is collation of views and from that, policy formulation and implementation. The ministry will put itself on a strict monitoring exercise to ensure that we keep players informed on the process as well as set deadlines for policy documents and action.

The examples of the successes of the support to SMEs in India, Italy and Brazil are an inspiration to all of us. Next time you buy a “Made in Italy” leather jacket, shoe or bag, chances are high that it was made by a small sector that started as informal yet has become a global brand. As you search the net remember Google was started by students in a dormitory room and that Apple gadget you have or aspire to buy was started in a garage.

For this reason we believe and have hope. All the people of Zimbabwe are invited to approach our offices and make an input into this formalisation process.

 Hon Sithembiso Nyoni is the Minister of Small and Medium Enterprises and Co-operative Development.

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