Botswana Exporters and Manufacturing Association (BEMA) interim Executive Director Gideon Phiri says Botswana cannot talk of a sound economy without a fully fledged Small Medium and Micro Enterprises (SMMEs) sector.
Phiri said SMMEs are an essential aspect of the economy as they represent a powerful engine for Botswana’s economic growth.
Speaking in an interview, Phiri said that amid debate about the role of small business as actual drivers of economic growth, in the developed countries worldwide, SMME’S are making their mark on the economic landscape due to their strategic importance in reengineering the industrial sector.
As such a mindset change is needed to realise the sector is in fact a catalyst for Botswana’s economic growth.
“It’s a fact SMME’s need to be developed as they will save the economy. Development of this sector should not seem as doing a favour instead it’s a must, because there is no economy in the world that can be sustainable without SMME sector,” said Phiri.
Phiri acknowledged the policy environment that has been put in place to encourage the development of the SMMEs sector, but, however, there is a missing link between policies and training institutions that offer technical assistance and funding.
“With such a gap in place, a fully fledged SMME sector cannot be operational in Botswana, as policies have to be linked with training institutions and funding; the three have to be interlinked to give birth to an influential sector,” he said.
SMMEs have unique advantages over larger businesses; they are substantial generators of employment and can act as shock-absorbers during economic crises, responding more readily to vagaries in the market.
Phiri said development of this sector should not be treated as a by-the -way arrangement.
He discarded the comments regarding the quality of products produced by the SMME’s saying, “Botswana SMME’s are as capable of producing good quality products, but the challenge emanates from the absence of technical support, the very skilled people that will give guidance on how the SMME’s can perfect their products to meet the required standards. If the part of technical support is omitted it is difficult to get it right.”
Phiri said whilst programmes like the Economic Diversification Drive and Private Sector Development have been put in place, the challenge remains that there are no supporting structures.
“All programmes require strong monitoring and evaluation process and some of the reasons SMME’s fail is because support structures do not exist,” he said.
Phiri said Botswana has no reason to have unemployment because “it draws down to the issue of supporting SMME’s. We have enough raw materials that are lying idle and need to be utilized.”
He added that although Botswana cannot have a vibrant manufacturing sector because of the small population, SMEs have faced several constraints, the most persistent of being the issue of inequitable distribution and allocation of land. However, as a small market with a limited money supply and circulation, there is little SMME development.”
“We need to balance between preservation and utilisation, If we are not careful with the balance we discourage investment,” said Phiri.
For instance, an investor who has P7 million to invest in a plant and could not find suitable land in the Pandamatenga area, would decide to invest in other sound portfolios and forget about Pandamatenga.
He added that the issue of funding must be linked to training and development and to markets. Bust as the cost of borrowing continues to go up, we need to work closely with banks and finance institutions as a way of securing funding arrangement that support businesses.