Thursday, October 1, 2020

SMME’s struggling to recover from the recession

A number of Small Medium and Micro Enterprises are still struggling to reverse the losses they made during the economic down turn.

This was revealed by the chairman of Botswana Confederation of Commerce Industry and Manpower (BOCCIM), Modiri Mbaakanyi, on Thursday.

“The SMME sector in Botswana is still behind the curve and is not experiencing a quick enough turnaround after the economic downturn,” revealed Mbaakanyi.

“Despite the renewed business confidence in the market, business within this sector has not really swung back to track as one would have expected,” he added.

Consequently, said Mbaakanyi, a number of SMMEs are faced with the threat of collapse as their operations are not sustainable.

“The situation is also not helped by government’s decision to reduce spending, a general increase in prices of input materials, and other direct and indirect taxes that businesses are paying out,” he said.

By their nature, SMMEs are not able to hold huge financial reserves, and they found themselves uncushioned against the challenges of the economic downturn. In the end, they experienced financial distress, and many of them collapsed as they could not access loan facilities.

Financiers are very risk averse, and they have instituted tight controls on credit facilities.

The challenge that Botswana faces is that of unemployment. SMME’s employ the highest number of people in Botswana, and many will lose employment if SMME’s are left to collapse.

On other issues, Mbaakanyi complained that businesses in Francistown are being fined unnecessarily because of the ambiguity of the Trade Act.

“We continue to receive shocking reports regarding the enforcement of our Trade Act especially in Francistown where our members are being hit with endless fines because of the ambiguity in this piece of legislation. We have however had discussions with the Minister of Trade and Industry and through the sector meetings we have discussed ways around this problem. The Minister has assured us that her ministry is alert to these reports and is expeditiously responding to the situation. We just hope that we can eventually bring this ordeal to closure sometime soon,” said Mbaakanyi.

RELATED STORIES

Read this week's paper

COVID-19 throws Botswana Athletics Association off the track

Botswana Athletics Association (BAA) has cancelled its 2020 calendar of events. This was revealed by the association vice president technical Oabona Theetso.