Govt must prioritise SMEs sector
THE country’s civil society has called on Government to prioritise the informal sector and small to medium enterprises (SMEs) affected by the Covid-19 pandemic in the disbursement of rescue packages to resuscitate their operations.
This comes as the sector is among the most affected by the pandemic, which has resulted in a lockdown effected on March 30, 2020 resulting in businesses from across sectors losing production time and output.
To help companies get back on their feet, Government announced an $18 billion stimulus package for various productive sectors of the economy.
Speaking during a virtual Public Finance Management Indaba organised by the Zimbabwe Coalition on Debt and Development (ZIMCODD), legislators, civic society groups, economists and academia who participated said Government needed to set its priorities right and ensure rescue packages reached the intended beneficiaries.
These should also have an impact on economic growth and turnaround such as SMEs who for the past decades have played a significant role to the economy employing over half the employable population at a time big corporates were downsizing operations and closing businesses due to economic challenges.
“We are going to have a difficult situation and different story after Covid-19 due to its effects on the economy. It is important to ensure that the intended beneficiaries get the stimulus package to resuscitate their businesses.
“It is important to ensure the informal sector, SMEs who have been affected by the pandemic access this package so they get back on their feet,” said ZIMCODD vice board chairperson Nomalanga Ncube.
World over, SMEs play a critical role in economic activities and their contribution especially in developing countries like Zimbabwe cannot be overlooked. In mining, small scale miner anchor the gold production accounting for over half of the gold produced in the country.
In agriculture, their contribution to both food and non-food crop production cannot be overlooked.
The Food and Agriculture Organisation (FAO) points out that the contribution of smallholder farmers to global food production is significant as they supply up to 50 percent the worlds’ cereal, 60 percent of the world’s meat and 75 percent of the world’s dairy production.
There is a heavy dependence on local small holder farmers to supply food needs for both urban and rural populations in developing countries, which calls for safety nets for the sector in order to ensure food security.
Calls have been made for developing nations to come up with solutions that are unique to their economies, that is, SME sensitive solutions for SME driven economies.
Other participants at the indaba also highlighted the Covid-19 pandemic was also a test for the country in its public finance management and its response to disasters management.
“Covid-19 has not only tested Zimbabwe’s public finance management system but has also exposed the gaps that exist within the system and that an effective public finance management system helps governments to respond effectively to disasters,” said a revenue transparency consultant Tafadzwa Kuvheya.
She made the remarks whilst highlighting that an effective public finance management system in disaster context is one that speaks to the eight principles which are accountability, transparency, responsiveness, efficiency to ensure fair value for money, flexibility, gender sensitivity, reliability and resilience to revitalise the social and economic environment so that it is able to withstand future disasters.
Chairperson of the Public Accounts Committee Tendai Biti also bemoaned failure by legislators to undertake their constitutional oversight role since the announcement of the lockdown arguing that this gives room for the Executive to flaunt constitutional provisions on public finance management, a worrisome situation during periods of disasters.