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LEA, ITC partner to develop SMMES

Publishing Date : 04 February, 2019

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Local Enterprise Authority (LEA) this week announced collaboration with International Trade Centre (ITC) to unearth the value of SMMES in Botswana.  LEA is Botswana ‘s coordinated and focused one-stop shop authority that provides development and support services to the local industry needs of SMMEs.

The International Trade Centre as global trade body operating as a joint technical cooperation agency of the World Trade Organization (WTO). The two organizations have partnered and signed a Memorandum of Agreement (MOA) to conduct the Small and Medium Enterprises Competitiveness Survey (SMECS). According to a communiqué issued by Boikhutso Kgomanyane Director of Corporate and Stakeholder Communications at LEA , the research will among others identify the status of the SMME sector in Botswana, and identify the needs of the SMMEs.

“The survey findings and recommendations will assist in informing decisions, policy formulation and development of targeted and relevant interventions to grow the SMME sector” reads an extract from the statement. According to LEA, the output of the agreement will significantly contribute towards the diversification of the economy and significantly impact SME sector in Botswana. The data collection exercise for this study commenced in January 2019, and it will form a baseline for future research work between LEA and ITC.

Small, Medium and Micro Enterprises (SMMEs) are the backbone of most economies of the world. SMMEs provide a means for economically empowering the economy of every nation. According to a study conducted by Wilbert R. Mutoko a lecture at Botswana Accountancy Collage in 2014, Botswana SMMEs contribute only 35 percent to GDP.  In the past decade there has been an on-going debate on SMME development and SMMEs’ contribution to Botswana.

The debate has involved SMMEs significance towards employment creation, poverty eradication, and economic diversification. Mutoko observes that SMMEs face tremendous challenges that threaten their survival and growth. The challenges include lack of or limited access to markets, financial inadequacies, limited management skills, poor work ethics and lack of competitiveness.

“SMMEs play a major role in many economies. Botswana is a country with very high reliance on government sponsorship and tenders. Many SMMEs depend for business by tendering to the government because the economy has for a long time been skewed towards the public sector. Although the government of Botswana has started privatizing national corporations, a lot still needs to be done,” writes Mutoko

LEA as a parastatal under the Ministry of Investment, Trade & Industry (MITI) is the main anchor of the ministry’s SMME‘s Development Apex.  MITI says Botswana takes SMMES seriously as a key economic vehicle that creates jobs and income for many of ordinary Batswana hence the SMME Development as Apex number 1. This was said by Minister of Investment Trade & Industry Bogolo Kenewendo when delivering the ministry‘s road map last year.

 “This is a vital instrument in inclusive growth and development of the informal sector which actually puts bread on the table for many of our unskilled and semi-skilled people,” she said. Under the SMME development basket Ministry of Investment Trade & Industry says it will prioritize entrepreneurship and advancement of small scale businesses. MITI also intends to robustly combat regulatory impediments for SMMEs. Kenewendo noted that a task team was already on ground to review regulatory burdens that may negatively impact SMMEs and hinder their flourish and income generating potential.

“This will entail working closely with relevant Institutions to undertake impact assessment before any Law, Bye Law, Directive or policy is implemented to ensure that it does not create any impediments to SMME development and growth” she said
Still under the SMME Development MITI will put in place a one –ministry Approach as well as develop and implement a change in management framework across the Ministry and its parastatals.

Kenewendo explained that this would entail sharing infrastructure and increasing the ministry footprints across the country on a use basis as opposed to holder as is currently the case.  “It will further ensure consistency in information dissemination by all front desk officers to provide clients with basic information about services offered by the ministry departments /parastatals.”

 Furthermore to continue facilitating SMMEs growth Honorable Kenewendo highlighted that her ministry will develop a supplier directory by sector and region. She explained that this will facilitate stakeholders such as business community and local authorities to have access to service providers within their jurisdiction. “This will create a captive market and further enhance quality and productivity of such providers of goods and services,” she explained, adding that it will enable ease of access to funding as the market will be defined and guaranteed,

LEA under the stewardship of Dr Racious Moatshe says the partnership with International Trade Center will go a long way into pushing their mission of promoting and facilitating entrepreneurship and SMME development through targeted interventions in pursuit of economic diversification.



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