For­mal­i­sa­tion of op­er­a­tions to ben­e­fit SMEs: VP Mnan­gagwa

Chronicle (Zimbabwe) - - National News - Felex Share Harare Bu­reau

THE Gov­ern­ment is for­mal­is­ing op­er­a­tions of small to medium en­ter­prises (SMEs) for in­vestors to be able to eval­u­ate their busi­nesses and make de­ci­sions, Vice Pres­i­dent Em­mer­son Mnan­gagwa said yes­ter­day.

He said most SMEs were not reg­is­tered and lacked ac­count­ing records and in­vest­ment into them was con­sid­ered high risk.

VP Mnan­gagwa made the re­marks in Harare yes­ter­day while open­ing the 2016 SMEs In­ter­na­tional Expo and launch­ing the Vir­tual Busi­ness In­cu­ba­tion Cen­tre for SMEs.

The SMEs In­ter­na­tional Expo is an an­nual ex­hi­bi­tion which af­fords small busi­nesses and cor­po­rates a plat­form to show­case their prod­ucts and ser­vices.

The Vir­tual Busi­ness In­cu­ba­tion Cen­tre grooms small busi­nesses through a men­tor­ing pro­gramme that pro­vides busi­ness plan­ning, mar­ket­ing, qual­ity as­sur­ance, ef­fec­tive cost­ing and re­port­ing on per­for­mance.

“Gov­ern­ment is seized with the de­vel­op­ment of a for­mal­i­sa­tion strat­egy to ad­dress the in­for­mal­ity of th­ese busi­nesses,” VP Mnan­gagwa said. “The strat­egy is de­signed to fa­cil­i­tate reg­is­tra­tion and li­cens­ing of th­ese op­er­a­tions, pro­vi­sion of in­fras­truc­ture, ac­cess­ing bank­ing prod­ucts and ten­ders. There are tax re­bates and al­lowances which can be claimed by busi­nesses which are reg­u­larly as­sessed by Zimra. More­over, un­reg­is­tered SMEs con­tinue to lose out on the 25 per­cent ten­der value is­sued to Gov­ern­ment that is re­served for SMEs.”

He said in some coun­tries, reg­is­tered SMEs were of­fered ex­port in­cen­tives.

“They get paid a cer­tain per­cent­age of the tax in­voices as a ‘Thank You’ by Gov­ern­ment for suc­cess­fully pen­e­trat­ing for­eign mar­kets,” he said.

“Gov­ern­ment, in an ef­fort to pro­mote ex­ports, is con­sid­er­ing such in­cen­tives. For­mal­i­sa­tion of SMEs al­lows them to do busi­ness with other com­pa­nies and busi­nesses or en­ter into joint ven­ture ar­range­ments with lo­cal or for­eign in­vestors and be able to ex­port their prod­ucts.”

VP Mnan­gagwa said be­cause of their in­for­mal sta­tus, most SMEs were fail­ing to bor­row from banks.

He said SMEs had kept Zim­babwe’s econ­omy alive, ac­count­ing for about 70 per­cent of the coun­try’s eco­nomic ac­tiv­i­ties.

“De­spite the dom­i­nance of small busi­ness en­ter­prises in Zim­babwe, most of them have failed to re­alise full po­ten­tial due to a num­ber of im­ped­i­ments that con­strain their growth,” he said.

“Th­ese in­clude lack of fi­nance and ap­pro­pri­ate tech­nol­ogy, low busi­ness man­age­ment skills, weak busi­ness link­ages and lack of mar­kets. For th­ese rea­sons, it has been dif­fi­cult for SMEs to grow be­yond what they are now and to ex­port into the re­gional and in­ter­na­tional mar­kets.”

He said there was a need for Gov­ern­ment, through the Stan­dards As­so­ci­a­tion of Zim­babwe (SAZ) to work with small busi­nesses to de­velop qual­ity prod­ucts. “Qual­ity is the hall­mark of mar­ket-suc­cess for ev­ery or­gan­i­sa­tion,” VP Mnan­gagwa said. “Qual­ity al­lows for pen­e­tra­tion of both do­mes­tic and for­eign mar­kets, con­sti­tut­ing a ma­jor driver of in­dus­tri­al­i­sa­tion. In that re­gard, ev­ery ef­fort meant to im­prove qual­ity must be nur­tured and sup­ported by all. The ISO-cer­ti­fi­ca­tion, be­ing an in­ter­na­tional qual­ity-seal, en­hances mar­ket con­fi­dence of the said prod­ucts, re­sult­ing in in­creased do­mes­tic and ex­port sales.” He said small busi­nesses were op­er­ated by “first gen­er­a­tion en­trepreneurs” hence the need for train­ing and tech­ni­cal sup­port.

Vice Pres­i­dent Em­mer­son Mnan­gagwa

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