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Sifelani Tsiko Agric & Environment Editor
The recent launch of the National Research and Development (R&D) Survey on SMEs and Co-operatives by the Research Council of Zimbabwe offers a comprehensive assessment of the state of SMEs in the country with a focus on the key challenges, opportunities, risks and useful recommendations for growth.

The small business sector in Zimbabwe is a critical part of the national economy which forms an important driver of the national development agenda — Vision 2030, which seeks to attain an upper middle income economy status by 2030 and enhance the quality of life, productivity and prosperity for the people in Zimbabwe.

Zimbabwe recognises SMEs to be major sources of employment and drivers of growth in the economy.

Research into the SMEs sector, is therefore, critical in providing useful insights into how the Government and players in this sector can fully address issues pertaining to regularisation, formalisation, enhanced access to financing and global markets.

The findings of the report show that the SME landscape is quite diverse — made up of relatively young businesses and many others which have been in operation for more than three years.

SMEs in Zimbabwe contributed 50 percent of the country’s GDP and employ more than 60 percent of the country’s workforce.

They constitute about 70 percent of all businesses in the country.

According to the report, this is reflected in the revenue generated and number of employees they have.

The survey sought to increase the stock of knowledge and to find meaningful ways of applying research findings to improve productivity in the SMEs sector.

This survey, which was undertaken between July and August 2019, sought to provide awareness on the importance of R&D, among SMEs and cooperatives, as well as measure the R&D effort among the players in this sector.

The compilation of the report was made possible with support of the Zimbabwe National Statistics Agency (ZIMSTAT), Government and the Science Granting Councils Initiative (SGCI) — jointly funded by the UK Department of International Development (DFID), Canada International Development Research Centre (IDRC) and the National Research Foundation (NRF) of South Africa.

Overall results of the survey indicate that SMEs and Co-operatives’ expenditure on R&D constitutes mainly labour costs, representing 38 percent of the total expenditure.

About 43 percent of the financial resources spent on R&D in 2018 were own funds. The RCZ says all this could be a reflection of the extent to which SMEs and cooperatives are ready to embrace R&D.

All this emphasise that SMEs have an important role in helping to create jobs, and demonstrates the importance of ensuring that SMEs receive the necessary support.

Research into this critical and often downplayed sector contributes to a greater understanding of the SME landscape.

It helps to identify the factors impacting this important sector of the country’s economy and helps policy makers to plot opportunities and best practice to guide the industry forward.

The SMEs and cooperative sector faces many challenges and opportunities that need to be explored further and shared with the entire SME ecosystem.

SME owners start their businesses for various reasons and support mechanisms that exist should encourage this drive of SMEs to positively impact on the country’s GDP growth.

SMEs owners want to have a positive impact — they want to add value and make a difference. This is an amazing quality that needs to be nurtured and utilised in the growth of Zimbabwe’s economy.

More support needs to be given to early-stage businesses and entrepreneurs to help them realise their potential and achieve that positive impact that they are striving for.

“This report is not an end in its self, but an anchor for future RCZ engagement across the whole SMEs chain,” said Susan Muzite, the executive director of the RCZ.

“We want research to guide our SMEs sector and transform it into a globally competitive sector as we strive to build Zimbabwe into a knowledge driven economy.”

Douglas Hoto, group chief executive officer of First Mutual Holdings said the SMEs sector must be supported to create ‘economic dignity’ for players in the SMEs and co-operative sector.

“The SMEs sector has been hit hardest by Covid-19 and we must empower this sector with information on research results of the survey,” he said. “We need to conscientise all players in this sector about the importance of R&D in their production and service processes.

“We also need to provide information on where they can access expert advice and guidance on how to grow their business. From this research, I hope strategies can be developed to help them access finance.

“Broadly, the survey should ignite an appreciation of wealth management principles with a view of promoting sustainable business enterprises in Zimbabwe.”

SMEs and co-operatives should be at the core of the drive to realise the Vision 2030 agenda to become an upper middle income economy. Women Affairs, Community, Small and Medium Enterprises Development Minister Sithembiso Nyoni, said SMEs and co-operatives had an indispensable role to the country’s social and economic development.

“We cannot achieve social and economic development with big companies alone,” she said. “This ground-breaking research work on SMEs and cooperatives should help guide our policies and action plans to grow our SMEs and help them to make meaningful contribution to our country’s development.

“It should inform our strategies on how best we can grow the sector and how we can facilitate and support the empowerment of the majority of our people in this sector.”

Minister Nyoni said there was need to fully utilise R&D research findings, to establish a one-stop-shop for SMEs — with expert information on development of standards, insurance, trade and export markets and an array of other issues that can help them to become competitive.

For years, SME owners have bemoaned the impact of red tape and the Government regulations, arguing the Government regulations were restrictive.

These SME owners pointed to the difficulty of obtaining licences, permits and payment of tax and tariffs.

Some SMEs owners still feel that Zimbabwe’s labour laws inhibit SME growth, while others say it does not.

Many SME owners are not aware of the possible impact of the labour law on their businesses.

Other contributing challenges they face include access to markets, something they say needs a lot of assistance in this area.

Hopefully, this survey will provide useful information to help SME owners to access funding and markets, followed by the need to gain a better understanding of laws, regulations and growth strategies.