MSMEs employ 4,8 million: Government pledges more incentives for sector
GOVERNMENT has outlined key measures geared at further upscaling micro, small and medium enterprises (MSMEs) operations countrywide, noting sector’s growing economic contribution, which is critical under the National Development Strategy (NDS 1).
MSMEs have become a major pillar of the economy and are expected to aid the growth of exports to US$14 billion per annum by 2030.
This makes enhancing support for the sector a top priority as Zimbabwe moves the economy up the value chain.
The sector’s contribution is being felt mainly in the food and nutrition security, economic growth, and stability through the production of goods and services, employment creation, and the sustenance of livelihoods.
On Tuesday, Minister of Women Affairs, Community, Small and Medium Enterprises Development, Dr Sithembiso Nyoni, presented to Cabinet an update report on the immense contribution of MSMEs to Vision 2030.
In her post-Cabinet report, Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa, said since 2021, approximately 3,4 million MSMEs have been in operation, and their distribution comprises 3 242 570 micro-enterprises, 114 591 small enterprises, and 1 545 medium enterprises. The enterprises are owned by 4,2 million entrepreneurs, she said.
Minister Mutsvangwa said economic activities by MSMEs are spread out in wholesale and retail trade, motorcycle, motor vehicle repairing, agriculture, forestry and fishing, and manufacturing, furniture-making, agro-processing, leather and leather products, clothing and textiles, oils, plastics and chemicals, and food and beverages.
These are injecting billions in revenue to the fiscus.
“In terms of contribution to the Gross Domestic Product (GDP), the Finscope Survey of 2022 revealed that MSMEs contributed US$8,6 billion to the country’s GDP,” said Minister Mutsvangwa.
“In employment terms, over 4,8 million persons comprising women (52,1 percent) and males (47,9 percent) were engaged on a full-time basis in the MSMEs sector,” she said.
The minister noted that leading MSMEs hubs include Kelvin and Makokoba in Bulawayo Metropolitan Province, Siyaso, Magaba, Glen View and Gazaland in Harare Metropolitan Province, and Sakubva in Mutare.
“It is noteworthy that the light engineering sub-sector is producing grinding mills, de hullers, threshers, boremills, oil pressers, boilers, welding machines, transformers, and building materials,” she said.
“The clothing and textiles sub-sector is producing school uniforms, baby wear, protective clothing and corporate wear.
“The nation is being informed that over the last five years, MSMEs have become the major suppliers of cordial drinks, peanut butter, maize and traditional grains meal, honey, dried fruits, and tomato pastes, among many other products. MSMEs are also producing leather products inclusive of school shoes, fashion shoes, belts, bags and wallets.
“Chemical industries run by MSMEs are producing large quantities of high-quality detergents, petroleum jellies, methylated spirit, degreasers, paint, sanitisers, and plastic containers for packaging.”
Furthermore, MSMEs are making a significant contribution towards the NDS 1 target of growing exports to US$14 billion per annum by 2030.
Added to that, MSMEs are acting as pathfinders in regional and international markets through participation in exhibitions and fairs such as the recent Dubai Expo 2020 and the upcoming Tokyo Expo 2025, said the minister.
She added that with the large expanse of the sector, there is a huge demand for workspace by MSMEs as they are contributing immensely to job-creating infrastructural development projects in major cities, towns, and at growth points across all provinces and districts.
Cooperatives are also being refocused to provide workspace for MSMEs, including in all new settlements, as the Second Republic ensures that no one and no place is left behind.
Despite having sound business ideas and expertise, most SMEs still struggle with obtaining financial support from banks, getting adequate working space, and accessing lucrative markets, among other challenges.
However, Minister Mutsvangwa said the Government is alive to the constraints faced and to boost capacity, under the National Micro, Small and Medium Enterprises Policy running from 2021 to 2025, robust interventions are being implemented to assist the MSMEs sector, which has proven to be a global game changer in socio-economic transformation.
“Accordingly, Cabinet has directed as follows: that more incentives be provided for the formalisation of MSMEs; that business regulatory services, including business registration, be streamlined and decentralised in order to accelerate the formalisation process; and that funding capacity be expanded for the Ministry of Women Affairs, Community, Small and Medium Enterprises Development, the Small and Medium Enterprises Development Corporation (SMEDCO), and the Zimbabwe Women Micro Finance Bank,” she said.
“Incentives will be provided to enable financial institutions to extend long-term finance instruments to MSMEs, particularly in the machinery and equipment production business.”
Minister Mutsvangwa further added that resources will also be channeled towards enabling the Standards Association of Zimbabwe (SAZ) to support product and systems certification for products from MSMEs and thereby enhance their regional and international competitiveness.
There will also be a deliberate thrust to accelerate the process of mainstreaming MSMEs development in the devolution agenda. That will entail having special attention to workspace provision for the various categories of enterprises across all provinces and districts.
“The ministry is collaborating with universities, innovation hubs, and industrial parks to promote technology transfer and the formalisation of informal enterprises,” she said.
“Many such enterprises are now registering with the National Social Security Authority for the benefit of their membership, and are opening bank accounts as well as paying taxes.” —chronicle.co.zw
