Sunday, June 16, 2024

SMEs should make time for the national budget

It is just a matter of hours before all eyes and ears turn towards Finance Minister Kenneth Matambo as he delivers the 2016/17 national budget speech. In the face of a yawning deficit, Matambo is expected to announce key decisions that will affect incomes of both the public and private sectors going forward.

But just like in previous years, whilst major business industries continue to show relative interest in the National Budget speech, the same cannot be said about our small and medium enterprises (SMEs). This includes both formal and informal ones. It is therefore necessary that although we are not privy to what Matambo has in store for the SMEs of this country, we call on them to show interest in his speech nonetheless.

We do so because generally the Budget Speech provides a good indication of what both big and small business can expect from an economic and regulatory point of view. Over the years, significant regulatory amendments have been made during the Budget Speech; therefore, every small business owner in this country should make time to familiarise with the contents of the National Budget. Just recently our parliamentarians were discussing a motion that seeks to “protect” the informal sector. Such motions could make the minister spare a thought for small and medium enterprises (SMEs).

A study conducted in 2009 on government and parastatal procurement from SMEs concluded that SMEs struggled to participate in government and parastatal procurement processes because of a lack of knowledge and skills to meet the conditions of the contracts demanded by such entities. A lack of interest to buy local goods and services by some public bodies was also identified as a challenge. The expectation is that the finance minister should be able to share with the nation, through the budget speech on what has been done to correct such. Under normal circumstances, Matambo should always have an ear for the SMEs; mainly because SMEs serve as engines of growth for the domestic economy. At the same time, Matambo can learn quite a number of lessons from them. Most small and medium business owners know what it’s like to put together a budget under difficult circumstances. And as it stands Matambo need just that. Figures coming from government enclave clearly show that the national coffers are under strain as mining downturn negatively affects the country’s budget, the national output growth and the trade account prospects.

As such one of the surest ways for Matambo to boost economic development and growth as well as the much needed job creation is to deliver a small-business-friendly budget. While there is no silver bullet, a budget which includes a range of measures empowering our SMEs to expand and employ more people, would go a long way in supporting small-business development and by extension economic growth.  Perhaps one should also remind Matambo that it his or rather the government’s responsibility is to ensure that our economy keeps growing, through provision of more jobs and more money in the pockets of our own people including SMEs. While the government continues to claim to have improved quality of life for many of the citizens this country, challenges still remain, particularly in the eradication of abject poverty. The answer to much of these woes lies in the extent to which the government helps sectors such as SMEs. But it starts with the SMEs having interest in what the minister will be announcing on Monday.

Already we know that there is the Stimulus Package Programme coming, of which its core is infrastructural development. This infrastructure programme has or must have a direct and indirect impact on SMEs. This is so because the sector depends on sub-contracting deals to stay in business. As such it will be important for our SMEs to listen to Matambo so as to get an idea of which infrastructure projects are on the Government’s list of priorities. This is especially important for SMEs in order to restructure their business development plans.

Failure by our SMEs to have interest in occasions such as the budget speech makes it very difficult to determine the extent to which government values the economic role that small businesses play in the overall national economy. We want to point out upfront that while cash is very important to small businesses, it is not the only thing needed to keep SMEs afloat. Knowledge on what is happening on both the domestic and global economy is vital and there is no other occasion that usually sums up the global changes like the budget speech. Over the past several years, regulatory frameworks have not distinguished the peculiarities that small businesses operate under. Can Matambo make an announcement relating to such? SMEs, just like any other interested party can only know if they can make time for the national budget.

The #bottomline however is that the minister should present a budget that is inclusive. We need a budget that aspires to meet the needs of all of our citizens, not just those who are at the high earning notch but also for those who do not have regular income as well as those participating in the SME sector. So far there is no evidence that SMEs have received any better deal from the current government, but perhaps they (SMEs) too are partly to blame.


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