SME sector is new source of sustainable jobs due to economic downturn – Mutati

SME sector is new source of sustainable jobs due to economic downturn – Mutati
Written by Mutuna Chanda in Kitwe
Tuesday, June 02, 2009 3:40:40 PM

COMMERCE minister Felix Mutati has said the Small and Medium Enterprises (SME) sector is a new source for sustainable jobs owing to the economic downturn.
And Mutati has said the banking system in the country is willing to prop the growth of the SME sector provided lending risk is reduced.

In an interview at the just-ended Copperbelt Mining, Agriculture and Commercial Show in Kitwe, Mutati said the SME sector was labour oriented and would employ a higher number of workers compared with highly industrialised investments.

“SMEs are responsible for 75 per cent of employment,î Mutati said. ìThe more we grow the SMEs, the more we create jobs. The new source of new jobs will come from SMEs because they are labour oriented.”

He further hailed the innovation coming from the SME sector.

“What we are seeing are increased levels of innovation,” he said. ìLook at Sylva Catering; they now have canned village chicken and canned goat meat. So the level of innovation is quite high and there are new entrants and with them we are seeing diversity.”

He said while the Copperbelt was reeling in job losses from the mining industry, there was hope for employment creation with the establishment of Multi Facility Economic Zones (MFEZ).

“From early last year going forward, the conditions have changed,” Mutati said.

“The projection of us creating 100,000 jobs was premised on growth being propelled by global growth but towards the end, we saw a decline in the mining industry and the immediate shock caused panic. In reacting to the shock one of the things was to cut on labour, capacity of supply to the mines also went down. So the strategy is to slowdown the force of job losses if not completely halt it. The main thrust on the Copperbelt is the MFEZ; we have the Chambishi MFEZ which we are bringing forward to this year and the establishment of the industrial park in Ndola with an estimated investment of US $100 million.”

And Mutati said the government would introduce a credit guarantee scheme through the Development Bank of Zambia (DBZ) that would cover part of the risk in lending to small and medium enterprises.

“The money in the Citizens economic Empowerment Fund is not enough,” conceded Mutati.