Small business ministry brings hope
IT is universally accepted that the small business sector is very pivotal in developing national, local and regional economies. Studies in both developed and developing countries have proved that notion. Lesotho, as a least developed country (LDC) in its transition efforts towards a developing county has, for many years initiated policies and programmes aimed at developing the small business sector (small, micro and medium enterprises - SMMES). These started with the establishment of Basotho Enterprises Development Corporation (BEDCO) in 1984, to the recent establishment of the Ministry of Small Enterprise Development (in 2015).
Simply put, the success of the small business sector depends on the following fundamental issues: Creation of an entrepreneurial culture in the society, at all ages and levels, Presence of local and regional markets (demand for products and services), Access to finance.
These three critical issues are made possible by the active presence of Government policies that create an enabling, positive environment through pro-active laws, strategies and systems; Sufficient numbers of business development services (BDS) providers with various skills and expertise, particularly operating in the private sector (with a profit motive), and Good collaboration of public sector, corporate sector and the non-governmental organization (NGO) sector.
The formation of the new Ministry of Small Business Development naturally creates our hope that it will initiate a process of understanding the inhibiting factors in the growth of the small business sector in Lesotho; It will undertake a study to understand the effectiveness or lack thereof of existing policies, programmes, laws and regulations, as well as institutional arrangements in place; It will undertake a study to thoroughly understand business development services needed versus what is available in the market, and devise programmes to address the capacity gaps the study identifies; It will engage, work, and collaborate with existing small business practitioners in Lesotho, be they individuals, business formations, NGOS, etc.
Perhaps the Ministry of Small Business Development would give itself a target that at the end of its first five years of existence it shall have Established 10 district offices (outside of the Ministry of Trade & Industry), fully capacitated to deal with administrative, policy and programmatic issues at that level; Reviewed and strengthened (where necessary) and/or enacted new laws to support, promote and administer small business development issues in Lesotho; Strengthened and/or created its delivery agencies, strategic partner organisations, for better (if not best) coordination of programmes, activities and service offerings; Installed an integrated, interactive web-based database of small businesses, business development service providers, entrepreneurship training insti- tutions, basic business skills trainers and/or training institutions, small business research institutions, etc; Established scheduled communication channels that Create awareness, Promote entrepreneurship; Build capacity; Create an enabling environment ; Report on progress; Encourage feedback and invite inputs; Encourage and reward excellence and Showcase success.
These may include Newspaper advertorials; tv and radio slots (public and private tv and radio stations); district workshops and seminars; national dialogue (e.g annual small business seminar) In conclusion
The challenge with the formation of ministries of small business development too is often sidelining local expertise in favour of foreign consultants. This often erodes local ownership and creates negative perceptions.
The other challenge is too much reliance on academia. Academic knowledge needs to augment and support the practical situation as it applies on the ground. My humble advice to the Ministry of Small Business Development is: get the local small business practitioners to help build the Ministry. Blend your strategic team with the practitioners, the academia and the civil service in the development of a viable, sustainable and successful small business development model for Lesotho.
The Ministry should work towards positioning itself as coordinator of small business development process in Lesotho, while the private sector BDS providers do the actual work of providing all the necessary development services (e.g conducting research, designing programme, facilitating training, advising, mentoring, coaching the SMMES, evaluating performance, etc).
BDS providers should categorise themselves into appropriate professional bodies, such as accountants, business consultants, business advisors & mentors/coaches, business skills training facilitators, research institutions, legal advisors, business linkage specialists, marketing specialists, etc.