SMEs contribute 60pc of national GDP
WOMEN Affairs, Community, Small and Medium Enterprises Development Minister, Honourable Monica Mutsvangwa, has urged Micro, Small and Medium Enterprises (MSMEs) to formalise their businesses and contribute to the country’s Gross Domestic Product (GDP).
Addressing members of Manicaland Chamber of Small and Medium Enterprises during an SMEs Indaba in Mutare on Wednesday, Minister Mutsvangwa said MSMEs lie at the bedrock of the country’s Vision 2030 as they are major contributors to economic growth. She urged the informal sector to register their businesses and cooperatives as part of the Vision 2030 goals.
SMES are contributing 60 percent of the National Gross Domestic Product (GDP) in the country. The sector is also significantly contributing to employment creation and income generation.
Drawing on recent statistics from the 2021 MSME Survey and the 2022 Finscope Survey, Minister Mutsvangwa underscored the substantial contributions of the sector to the economy, with an impressive US$8.6 billion addition to the GDP.
“Recent statistics as highlighted in the 2021 MSME Survey and 2022 Finscope Survey show phenomenal growth of the sector with it contributing more than US$8.6 billion to the GDP.
“The 2021 MSME Survey also depicted that approximately 4.1 million individuals were operating 3.4 million MSMEs, of which 96.5 percent are informal,” said Minister Mutsvangwa.
However, she lamented the prevailing information gap regarding the tax measures announced in the 2024 national budget statement, citing numerous inquiries from MSMEs having trouble with meeting the requirements and implications of these measures.
She outlined some of the key measures, including the necessity of tax compliance certificates.
Minister Mutsvangwa said taxation is a law which everyone who is liable should be compliant and abide with. She said adhering to the laws is important for the development of the country.
“The issue of taxation is usually considered too technical, therefore shunned by most MSMEs. However, this should not be the case as this issue is crucial for MSMEs growth.
“There are many advantages of being a formal business in Zimbabwe, and these include, contribution to the national development and economic growth by employment creation, generating revenue and reducing poverty as well as unlimited access to formal financial services such as loans, grants and insurance, participation in Government programmes and incentives such as tax breaks, subsidies and tenders,” she said.
She reassured stakeholders of her ministry’s commitment to the facilitation of smooth transitions and uninterrupted business operations for MSMEs, collaborating closely with Zimbabwe Revenue Authority (ZIMRA).
Minister Mutsvangwa said the nation requires a whole Government approach and more interconnectedness.
“There is need to reiterate that to achieve our shared Vision 2030, we need more cooperation, more collaboration, more enthusiasm and synergies than before to make the measures work and get realised. Agenda 2063 and Vision 2030 needs an inclusive society, so we need to keep working together. “In line with His Excellency, President Mnangagwa’s mantra of ‘Leaving No One and No Place Behind,’ the task of unpacking the tax measures demands a robust and unprecedented inclusive approach to ensure a wider reach to all citizens of this nation,” she said.She applauded the Manicaland Chamber of Small and Medium Enterprises for keeping its members updated and prepared for the changing economic situations, and organising the indaba which ensued that members are kept up to date with Government’s tax measures.
Also addressing the same gathering, Minister of State for Manicaland Provincial Affairs and Devolution, Advocate Misheck Mugadza challenged MSMEs in Manicaland to work positively to grow the province’s GDP.
He further challenged every SME to register and abide by the national regulations and contribute positively to the national fiscus.
“We expect the same 60 percent contribution to the GDP from the SMEs sector that is happening nationally to also reflect in Manicaland. I am urging every SMEs to come up with initiatives that will attract investors to the province. We want to grow together as Manicaland.
“The nation is indeed indebted to you for your esteemed contribution to the country’s growth, let us keep pushing,” he said.
Drawing on recent statistics from the 2021 MSME Survey and the 2022 Finscope Survey, Minister Mutsvangwa underscored the substantial contributions of the sector to the economy, with an impressive US$8.6 billion addition to the GDP.