Maravi

(HERALD) Committee seeks legal framework for SMEs

Committee seeks legal framework for SMEs
Thursday, 03 March 2011 19:23
Business Reporter

PARLIAMENTARIANS have called for the creation of a legal framework that supports the growth of the small to medium enterprises sector. The Parliamentary Portfolio Committee on SMEs said laws relating to the sector were "too fragmented".

They said there was need to have them harmonised for the sector to obtain substantial benefits. Committee chairperson, Luveve Member of House of Assembly, Mr Reggie Moyo, said this when he presented its report on the status of the SMEs in Parliament last week.

He said stakeholders had told them during meetings that the sector had been affected by laws such as the Regional and Town Planning Act, Land Use Act and Environmental Management Act.

"In one instance, small-scale miners were being hampered in their operations by stringent regulations imposed by EMA," he said in his report.

"The committee was told by the permanent secretary that the legal and regulatory environment can only improve with the support of other line ministries.

"Secondly, the committee noted with concern that the SME sector was operating in an environment without any supporting policy or Act peculiar to it."

The committee recommended that local authorities should consult traders on issues pertaining to rates and lease agreements so as to improve relations between council and traders.

The committee also urged the parent ministry to conduct a study on the linkages of SMEs and put them into clusters.

"This will enable the ministry to develop strategies aimed at promoting the growth of SMEs.

"There is need to create institutions that relate to the operation of each sector of the SMEs," he said.

The committee noted that creating clusters for SMEs would help key stakeholders to channel resources or ‘trouble shoot' challenges affecting a sector," he said.
The committee also urged Zesa to charge SMEs

tariffs commensurate with the size of growth of business.

Municipalities were also urged to establish departments specifically dealing with SMEs.

It was recommended that a financial institution be established which would focus solely on the funding of SMEs.

"There is need to restructure the country's financing and banking structures to explicitly acknowledge the structural shift in the economy where SMEs play a pivotal role in the economic growth," he said.

Labels: SMEs

posted by MrK @ 6:15 PM