Formalisation of businesses: A door to international markets

Robin Muchetu, Senior Reporter

BUDDING and existing micro, small and medium enterprise owners have been encouraged to follow all registration procedures provided for in the country’s laws to improve their operational convenience as well as open doors for engagement with regional and international markets at their disposal.

This was said by the Co-ordinator of the Bulawayo Chamber of Small to Medium enterprises Mr Nketha Dlamini who believes small businesses are missing out on international markets because they are not registered.

“An important element that we emphasise as a chamber, following what the Government and the International Labour Organisation have been encouraging, is we need to formalise our businesses be they micro, small, or medium. We have members who are into business advisory services and are assisting their colleagues to register their businesses,” he said.

He said it was not only legal to register but an advantage to the business as well.
“You need to formalise your work with the relevant offices such as the Zimbabwe Revenue Authority, Procurement Regulatory Authority of Zimbabwe, the Companies and Deeds Office, the relevant local authority, the National Social Security Authority, and other bodies. Once you do that you get into the database of Government and even private organisations and you can do business with them,” he said.

Mr Dlamini says markets become wider when one has a formalised business saying tenders are administered through PRAZ and if one is not a registered business owner then it becomes impossible to secure a tender.
He added that they encourage SMEs to formalise and they refer them to the relevant authorities once they want to regularise their enterprises.

“There has been an outcry of the costs of registering with all the relevant authorities and we are in the process of making it easier so that it does not become a barrier to entry into doing business,” said Mr Dlamini.
Mr Dlamini said there are opportunities that still exist in the market for SME’s.

“Opportunities still exist and are not fully satisfied. We need to work around our pricing system to be reasonable and still satisfy the market. The country has signed Memoranda of Agreements with other countries so we have that opportunity to export our products, also if members go via organisations like ZimTrade there is that ability to find international markets.

“For the fruit and vegetable market, I know it has takers in the international market in the European Union, it is however, strict in that you have to document the practices you have been doing on your land, feasibility, and consumer security. We need as SMEs to understand more on what is needed for the international market,” he added.
Currently, the Bulawayo Chapter says they are in touch with a member of the chamber who is providing greenhouse technology for those in agro-processing.

“For me, it is a great opportunity for SMEs. I was in consultation with a farmer whose produce was wiped out by rain storms in December last year and fortunately they are now in touch with the people providing greenhouses so it increases security and safety for the crops against weather elements,” he added.

Mr Dlamini, however, lamented the lack of adequate and suitable workspace for SMEs.
“The working space, basically I cannot say the workspace is enough, SMEs are still looking for more workspaces. I should also qualify for the workspace; they need a decent workspace because some have bays in the CBD but they are not protected from rain and wind and making it difficult to operate when it rains also customers cannot access the businesses when the weather is bad.

A lot of our members and non-members are still looking for a decent working space within the Bulawayo Metropolitan area,” he added.
He attributed the shortage of workspace to inadequate information on the number of SMEs available.
“What we have done as of now, working together with the Ministry of Small and Medium Enterprises is to register SMEs.

The idea was to use that data to work with the council so that when they plan, they know the number of SMES available in Bulawayo and they know which percentage need space to operate from and the amount of space they need. The current challenge for planning purposes is the classification of SMEs, be it from the production side — is it clothing, is it furniture or metal fabrication, or building.

When we look at space, the different clusters will need different types of spaces and must properly classify them into the various clusters,” said Mr Dlamini.
Local SMEs are having to travel to Harare or South Africa to get inputs which then adds to the cost of production for these goods and at the end of the day products become expensive.

SMEs also have challenges with access to capital to buy new and modern machinery and finance production systems.
“There are financial institutions that are available but the money is too expensive and is not easily accessible to our members. If a member gets a good order for their products, the question then becomes, can they afford to satisfy the order at a good quality for the customer? We need to find models, either existing or specialised, to assist our member’s access to finance with the help of the ministry and Central Government,” he said.

The advent of digital marketing, he said, was an avenue for SMEs to market their products.
“If you throw your products online and the regional and international market will be aware of the products you are producing as marketing has stopped being a physical activity but now online. A number of people got inquiries about their products when we advertise them on our Facebook pages. However, when you get high responses, SMEs also have the challenge of financing the big orders once again,” he added.–@NyembeziMu