SMEs could be engine of economic growth, if … Nghidipo Nangolo Thursday, July 31, 2014 - 08:00 Off the Desk Small and Medium Enterprises (SMEs) have long been recognised as the engine of successful economies worldwide that drives economic growth and employment. Since there’s basically no debate about the importance of SMEs, policies and programmes aimed at assisting micro-enterprises need to be re-defined and re-emphasised for everyone to grasp. What is being propagated as financial, material and organisational support to SMEs is not only ambiguous but highly suspect as it targets fly-by-night businesses, those connected to the elite and party hacks that behave like they are businessmen and women. It is perplexing when government is paying rental fees, donates equipment, and assists with the formulation business plans for people who have personal business loans and live a luxury life beyond the status of micro-enterprise owners. The fact that government has assisted only about 700 SMEs thus far in a country of more than 2 million people and almost a million unemployed, makes a mockery of these programmes at best. By nature Namibians are business-orientated, and therefore there’s no shortage of SMEs, registered or not, starting with the hordes of vendors and shebeen owners who are overwhelmingly occupying every open space at every corner of this country. Instead of chasing vendors and evicting them, give them a chance to grow in whatever economic sphere they excel. There should be a deliberate policy to upgrade successful vendors and shebeen kings and queens. These are small business people with potential and drive, and with a little push they could make a huge difference. There should also be a deliberate programme to avail information, not once or twice but indefinitely, to ensure that every Namibian is aware of the programmes intended to help small enterprises. The existing programmes are almost hidden and known only by the who’s who pretending to be business persons. The reality of the current SME assistance set-up, is that beneficiaries are deliberately declaring their businesses insolvent and pocket the capital and assets to start other private business ventures. The current programmes lack credibility due to the fact they are selective and border outright on corruption as they assist people who are already affluent, living in posh houses, driving expensive luxury cars, flying all over the world for fun and dining with the rich and famous. The government needs to have at least a target of 200 000 individuals or groups to assist as SMEs with finances and equipment, with the understanding that at least 50 000 or more will make it as genuine business people in 10 or 30 years. What we are witnessing today is a circus. In comparison to big companies, micro-enterprises are naturally poised to support the national economy by creating secure jobs because they use less capital to attain high productivity, expend less on production costs, they are specialised and therefore ensure quality products through innovation and a skilled workforce. They are more likely to survive the turbulences of the global economy than the big multinationals as they are flexible enough to adopt to new changes in local and international markets. In the wake of capital flight, small companies are more likely to activate local investments as opposed to big companies. The priceless investment into SME assistance programmes could be an effective tool to reduce poverty, create employment for skilled and unskilled workers and raise the standard of the living of the poor segments of society. Hence, the Ministry of Trade and Industry must not only have clearly-defined policies aimed at assisting small businesses with technology, growth and marketing strategies, but, most importantly, must have a target of beneficiaries, industry diversification and the number of how many businesses they want to see up and running in a particular timeframe.
Posted on: Thu, 31 Jul 2014 20:00:00 +0000
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