mhlomuli.jpgBy Mhlomuli
SMEs Key to Zimbabwe’s Economic Revival!

The quest to reignite Zimbabwe’s economic flame has gathered momentum and those that have this country’s interests at heart have unanimously agreed that we need to tackle our issues together, regardless of any differences that we may have.

 

There has been much emphasis that we need to rebuild our business sector and provide all forms of support that we can render if we are to rebuild Zimbabwe.

 

I have been following events concerning our Small and Medium Scale Enterprises (SMEs). The recent announcement of an additional tranche of US$250 000 to that sector by the National Social Security Authority (NSSA) for the capacitating of SMEs is a timely boost.

 

Reports say to date, US$500 000 has been disbursed to this important sector of the economy through that facility. I want to reiterate that any nation that ignores the programme of pushing SMEs performance through resource provision is out of line with reality.

 

In my assessment of Minister Sithembiso Nyoni’s ministry, a lot of work has been done and that ministry is certainly on track as it continues playing the role of SME promotion in the manner in which it has been doing. As long as we understand that SMEs are the drivers of the economy in the new order, we are certain to grow our economy and sure to spread the national cake to reach out to all previously disadvantaged Zimbabweans.

 

We also need to take a leaf from other nations around the world to see how their SMEs have driven economic turnaround programmes. A 1995 study on SMEs in the Republic of Korea noted that “The economy in the Republic of Korea has achieved unprecedented growth in the last three decades. Between 1965 and 1995 per capita GNP increased from $105 to over $10,000…

Exports recorded a substantial increase from $0.2 billion to $125 billion…”

 

 

SMEs were fingered as having been the largest contributor to that growth and hence my insisting that this industrial sector’s importance should not be underestimated.
 
SMEs are taking a bigger and more significant role and becoming as important as large firms in the creation of gross and net new jobs in the new economic order. Analysts who subscribe to the theory of promoting SMEs also argue that in terms of innovation, SMEs have a greater tolerance for higher-risk initiatives and the capacity to reap substantial market rewards in niche markets. As small business entities, they are very flexible and move fast to adapt to any environment.

 

A fact to note is the period when Zimbabwe went through difficult times and large corporations were suffering in terms of under-performance. With some almost at zero output, it was the SMEs in the informal sector that carried the day for the nation. We could not have survived beyond that era had it not been for this sector which kept adjusting and remaking itself. It is very correct to champion the SMEs cause. They are the key even today, for Zimbabwe’s economic revival.

 

Not taking anything away from large scale businesses or downplaying their importance in our nation, if we are to realise our indigenisation and empowerment goals as a nation, the beginning point is with the SMEs. We are certainly going to face quite some resistance from those who utter anti-indigenisation sentiments. We want to be able to come up with a programme of turning our SMEs in the long run into listed blue chips.

 

In the crisis where we came from, SMEs played a very significant role when these large businesses were retrenching, downsizing and employing all sorts of cost reduction measures.

 

It is time to reward this sector with the much needed crucial loans that will set them on track. A majority of Zimbabweans who are crying out for empowerment fall in this category and it is up to us to nurture that dream by giving them resources. Resources are not only in financial terms, but even through technical support and training.

 

Another significant issue to note in the Korean example is that from the 1980s, manufacturing SMEs outperformed the large manufacturing enterprises in all growth indicators as a result of the government’s active SME promotion policy that also sought to rectify the structural imbalance stemming from the heavy industry promotion policy.

 

With all Zimbabwean business people agreeing that there is need to assist our manufacturing sector to rise up, I feel concentrating on the SMEs will be a defining moment as to how we want to usher direction to our intended economic revival. We need to take this crucial issue of developing Zimbabwe’s industry even beyond urban areas right to the rural countryside. Those aspiring cattle ranchers, cotton growers, basket weavers, millers and fishermen should be assisted to run their own businesses successfully. A monitoring mechanism should be in place to assist in checking the performance of these SMEs.

 

We also need to take a step further by ensuring partnerships between all small businesses and the large corporations. Thank God, our indigenisation legislation intends to address this important issue. Now government and the private sector should allow SMEs access to all business that requires a supply of any products or services. Some form of incentives could actually be extended to those large businesses that grant business to our SMEs sector. The minister could keep a database of such businesses to ensure transparency and prevent any corrupt tendencies.

 

Lifting SMEs to a position of being players that drive Zimbabwe’s economy is a sure advantage that we could promote as we create employment and ownership among our own indigenous citizens. Now is the time to lift Zimbabwean people to a new level of engagement and empowerment in Zimbabwe. We can only ignore SMEs at our own peril. They remain the key to the nations’ economic revival.

 

If statistics from other nations like China, Korea and other Asian nations testify to this fact, then what could stop us from emulating such examples? We are on track as long as we keep learning from such examples.