HomeOld_PostsBid to enable SMEs to grow

Bid to enable SMEs to grow

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By Tatenda Gapa

THE National Economic Consultative Forum (NECF) in partnership with the Ministry of Small and Medium Enterprises and Cooperatives Development organised a policy dialogue on opportunities and challenges for Small and Medium Enterprises (SMEs) development in the country last week in Harare.
The main objective of the dialogue was to come up with strategies to enable the SMEs to contribute more significantly towards the country’s economic growth.
Vice-President Emmerson Mnangagwa officially opened the event which was also attended by various SMEs’ representatives, big companies seeking SMEs linkages, policymakers, financial services sector, development partners and business membership organisations.
In his presentation, Dr Nyasha Kaseke said, Specialised Export Processing Zones (SEPZs) must be established to facilitate international market access and penetration of SME products.
“SEPZs should be established to facilitate international market access and penetration of SME goods and services through their participation in Contact Promotion Programmes, Trade Fairs and Exhibitions, Trade Missions, Buyer-Seller meetings and Conferences and Group-Marketing Schemes for the SMEs,” said Kaseke.
Dr Kaseke said some of the challenges being faced by SMEs could be dealt with by adopting holistic strategies.
SMEs are fast becoming a more dominant form of business in Zimbabwe in terms of contribution to employment generation, output, exports, poverty alleviation, economic empowerment, entrepreneurship and wealth distribution.
The 2012 World Bank comprehensive scientific survey of the SMEs sector established that approximately 5,7 million people are working in the SMEs sector where only 15 percent of the SMEs were registered or licensed, with 85 percent being in regulatory default by failure to be registered.
On the other hand, the 2012 Finscope survey on financial inclusion estimated that the informal sector has as much as US$7,4 billion circulating outside the formal financial system.
As big companies continue to fold in the country, many people are resorting to small businesses as a way of living.
Despite this growth in the number of SMEs and their undoubted contribution to economic growth, SMEs in Zimbabwe remain faced with a number of challenges that affect their viability and hence their ability to graduate to big companies.
Notable challenges for SMEs in Zimbabwe include limited access to finance, infrastructure bottlenecks, poor access to market, inadequate business expertise (business management skills) and the punitive regulatory framework.
Generating solutions to overcome these challenges is key to maximising the contribution of SMEs.
As governments around the world strive to achieve growth that is sustainable and inclusive, there is a pressing need to find solutions that enable SMEs and entrepreneurs to fulfil their role in boosting investment, creating jobs and achieving social cohesion.
Dr Kaseke said in order for SMEs to be successful there must be a favourable environment for business as SMEs in other countries like China contribute significantly to the economy ever since they were availed favourable conditions to operate in.
“The institutional environment of China was originally unfavourable for the emergence and development of SMEs,” said Kaseke.
“Private enterprises (which are mostly SMEs), in China for example, were not permitted to exist until 1988, however, the increasingly significant contribution of SMEs to the economic growth of the country prompted the Chinese government to improve policies and measures concerning the development of SMEs.
“China’s registered SMEs exceeded 4,3 million in number and contribute more than 60 percent of China’s GDP, 50 percent of tax revenues, 68 percent of exports and 75 percent of new jobs every year.
“SMEs accounted for 99 percent of China’s registered enterprises.”

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