The Sunday News
Harare Bureau
More than half of Small to Medium Enterprises (SMEs) that closed when the lockdown began on 30 March might fail to reopen when the current restrictions are lifted, but Government — armed with a $500 million kitty — is redoubling efforts to make sure they survive.
Women Affairs, Community, Small and Medium Enterprises Development Minister Sithembiso Nyoni told our Harare Bureau that most of the enterprises were struggling to pay salaries and other bills.
“We did a snapshot survey in which we found that about 57 percent of SMEs will not be able to go back to do business. A lot of them, over 50 percent, may not be able to pay salaries, income has been eroded; so is capital. Some of them will never go back to the businesses they used to do.”
The package, which will be divided into three categories, will cater for both cushioning allowances and working capital requirements.
“We have prepared a Cabinet paper, our proposal for the way forward. As soon as Cabinet approves, we will roll out the programme. We were given $500 million and we divided that into three tiers. The first tier is for what we call the green field; we know that some of the SMEs may start from scratch or may have to change their line of enterprise. These are what we call green field and they will be eligible to be funded through small and concessional loans.
“The second tier is for those within the formal sector, for example, there could be those doing tailoring, these will be supported at level two.
“The third tier is for registered SMEs; there is funding to support them and the President (Mnangagwa) said the money needs to be used,” she said.
Women and youths will be prioritised. While Government wants to formalise SMEs, a bottom-up approach was preferable as the process had to be driven by the enterprises themselves. Authorities will, however, set up decent work spaces.
Minister Nyoni added: “After Cabinet approves our strategy, we don’t want the informal sector to go back to the squalor, to go back to shacks where they had been operating from.
“We are working with the private sector and the Ministries of Local Government and Public Works; National Housing and Social Amenities; Finance and Economic Development; and the SMEs themselves, to put up decent work spaces.”
Nearly one million people operate small businesses in the informal sector, according to the Zimbabwe National Statistics Agency’s 2019 Labour Force and Child Labour Survey.
