Maravi

(HERALD) SMEs key to economic growth

COMMENT - Not only are SMEs the future of any stable economy, but they are far less vulnerable to foreign manipulation.

SMEs key to economic growth

OVER the past 10 years, Small and Medium-Scale Enterprises emerged to fill the gap left by big businesses that threw their hats into the political arena in the wake of the stand-off between Zimbabwe and the West. The economy, then as now, was dominated by 400 British companies that straddled every sector, from raw material production to marketing.

Some of these companies bought into the regime change matrix of economic sabotage by either closing shop, cutting production or exporting their capital to other countries in the region.

Thousands of people who relied on these companies for livelihoods were left in limbo, and many turned to self-help projects that morphed into SMEs that worked to fill the void left by big business. Apart from providing goods and services, SMEs became a major source of employment.

And Government, which had realised the folly of basing a revolution on a British economy, worked to capacitate the SMEs through various interventions as part of its empowerment initiatives.

Chief among them was the construction of factory shells, the setting up of a support vehicle — the Small Enterprises Development Corporation — and a ministry dedicated to the sector, the Ministry of Small and Medium Enterprises Development.

Among the challenges the SMEs faced was lack of adequate equipment, which is why Government, through its co-operating partners and friends in the East came in with initiatives like the Indo-Zim small and medium enterprises project that, last year provided multi-million-dollar equipment to the SME sector.

President Mugabe commissioned the US$4 million project at the Harare Institute of Technology, culminating in Government and its Indian counterparts setting up state-of-the-art equipment for SMEs in Harare, Bulawayo and Chitungwiza.

As part of the project, some technical experts came to Zimbabwe to impart technical skills to local technicians to train entrepreneurs on how to operate the equipment.

Reports that the equipment is lying disused in Harare make sad reading, particularly as SMEs have been identified as one of the pillars of the ongoing economic revival programme.

We shudder to think that is the situation obtaining in other cities and towns. Though Small and Medium Enterprises Development Minister Sithembiso Nyoni blamed the situation on the economic downturn that affected the country over the past years, we feel that discovery is a call to action.

The equipment has no business lying idle at a time we are busy talking about economic revival.

The ministry should take this as a challenge and ensure that the equipment is put to maximum use to help drive the economic revival programme.

We are, however, encouraged by reports of the recapitalisation of Sedco, and feel the minister should go a step further and engage financial institutions to help bankroll the sector with loans, with Government guaranteeing the loans for serious SME entrepreneurs.

Part of the reason why returns from the four phases of the Farm Mechanisation Programme have been long in coming is that some of the equipment is lying unused.

This is a luxury we cannot afford, particularly at a time we are busy trying to bust the illegal economic sanctions the West imposed on us, and is apparently keen to maintain.

Labels: ECONOMY, SMEs

posted by MrK @ 5:11 PM