‘MSMEs now major economic players’
THE 2022 FinScope Micro, Small and Medium Enterprises (MSMEs) and Consumer Survey has
revealed that the country’s economy is now dominated largely by micro, small and medium
enterprises (MSMEs), which contribute up to US$8,6 billion (60 percent) to gross domestic
product.
This is despite the findings that only 30 percent of MSMEs have access to electricity, among other
challenges, which include lack of business premises and storage facilities.
The 2022 FinScope report is the third cycle of such surveys, with the previous ones having been
conducted in 2011 and 2014.
According to the report, MSMEs continue to be a key pillar driving the country’s economic growth.
However, a majority of them still operate informally and face power outages while some are not
connected to the grid at all.
“Access to energy is highlighted as a constraint as only 30 percent of MSMEs have access to
electricity. Nearly two in five MSMEs highlight infrastructure issues concerning a lack of business
premises and storage,” reads part of the report.
“The MSME sector continues to be a key pillar for economic growth and employment creation
showing an increase in the estimated number of employees and profit contribution of the sector up
to US$8,6 billion post the Covid-19 pandemic.
“It continues to absorb more female adults, which is key to addressing the gender gap.”
The growth of the MSMES sector is in line with the ideals of the National Development Strategy
(NDS1), which is anchored on driving inclusive development as expressed by President
Mnangagwa’s philosophy of ensuring that no one and no place remains behind in terms of
development.
Commenting on electricity supply challenges, Bulawayo Chamber of SMEs co-ordinator, Mr
Nketha Mangoye Dlamini, stated that power outages were crippling production capacity and
causing losses among their members.
According to the report, more individual entrepreneurs were recorded in 2022 indicating that the
sector is a critical source of income for many adult Zimbabweans characterised by low personal
monthly income.
However, this segment is also key for new entrepreneurs bringing innovative products and services
with most of these, about 55 percent being in the start-up and growth phases.
Over time, the report suggests that growing the MSMEs sector will benefit other micro, small to
medium segments.
However, the report shows that while the sector is mainly dominated by females as business
owners, the process of formalisation has been slow over the years with only 14 percent covered.
“The main barrier is due to business size where the enterprise is too small or lacks funds for
registration,” reads the report.
“Hence, business owners indicate a desire to formalise if the process was made free and well
sensitised to inform the business on the benefits of formalisation.”
The survey findings further indicate that compliance has largely been linked to formalisation as the
benefits of formalisation have been mostly to comply with the law and to avoid harassment from
authorities. “This stigma unfortunately stifles formalisation and its benefits to the business owner
or enterprise,” reads the report.-The Chronicle
