18,5k SMEs for­malise op­er­a­tions

Chronicle (Zimbabwe) - - Front Page - Oliver Kazunga

THE num­ber of Small to Medium En­ter­prises (SMEs) that for­malised their op­er­a­tions last year has in­creased to more than 18 500 from about 13 000 in 2017.

In an in­ter­view, Bu­l­awayo Cham­ber of SMEs chair­per­son Mr En­ergy Ma­jazi said the im­prove­ment on the num­ber of reg­is­tered SMEs was largely at­trib­uted to en­force­ment by the Zim­babwe Rev­enue Au­thor­ity. As an as­so­ci­a­tion, he said they have also been en­cour­ag­ing in­for­mal en­trepreneurs to reg­is­ter their op­er­a­tions with Zimra.

“More than 18 500 SMEs across the coun­try have for­malised their op­er­a­tions with Zimra but the fig­ure could have been more if in­cen­tives had been of­fered for for­mal­is­ing op­er­a­tions,” said Mr Ma­jazi.

He said his or­gan­i­sa­tion was there­fore ap­peal­ing to Gov­ern­ment to of­fer in­cen­tives to those SMEs that have for­malised op­er­a­tions.

In 2017, Cabi­net ap­proved the SMEs for­mal­i­sa­tion strat­egy paving way for the re­in­force­ment of the so­cial con­tract and cre­ation of sus­tain­able de­cent jobs. The drive to for­malise the sec­tor comes on the back of study re­ports that about $5,7 bil­lion is cir­cu­lat­ing in that mar­ket. How­ever, the for­mal­i­sa­tion process has been met with re­sis­tance by some play­ers who claimed ben­e­fits of for­mal­is­ing were out­weighed by costs.

This has prompted Gov­ern­ment to cham­pion ini­tia­tives meant to en­cour­age SMEs to reg­is­ter their op­er­a­tions with Zimra. Such mech­a­nisms in­clude fund­ing fa­cil­i­ties from the Re­serve Bank of Zim­babwe such as the ex­port fi­nance fa­cil­ity, microfinance re­volv­ing fa­cil­ity of ($10 mil­lion), gold sup­port fa­cil­ity ($150 mil­lion), cross bor­der fa­cil­ity ($15 mil­lion) and the hor­ti­cul­ture fa­cil­ity ($10 mil­lion).

Ac­cord­ing to a Fin­scope Mi­cro, Small and Medium En­ter­prises (SMEs) Sur­vey (2012), in Zim­babwe there are 2,8 mil­lion SME own­ers em­ploy­ing 2,9 mil­lion peo­ple, trans­lat­ing into 5,7 mil­lion peo­ple de­pen­dent on the sec­tor, con­tribut­ing more than 60 per­cent to the Gross Do­mes­tic Prod­uct. — @okazunga.

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