The Sunday News
Dumisani Nsingo, Senior Business Reporter
THE Government will consider channelling the $500 million funding allocated to Micro, Small and Medium Enterprises (MSMEs) under its economy stimulus package to those into manufacturing as it makes strides to expedite the sector’s contribution to the country’s economy in the wake of the novel coronavirus pandemic’s effects.
Women Affairs, Community, Small and Medium Enterprises Development Minister Dr Sithembiso Nyoni said the Government would give first preferences to manufacturers in its disbursement of the $500 million package set aside to assist the MSMEs sector informal businesses and Small and Medium Enterprises (SMEs).
Two weeks ago, President Mnangagwa announced $18 billion economic rescue package of which the MSMEs sector was allocated $500 million.
“In disbursing the fund, we want to emphasise mainly on the productive sector rather than retail and distribution, because the productive sector creates more jobs. For enterprises that produce goods, the value-chain starts with production and it creates jobs to the downstream industries. So, we intend to focus on the value-chains especially the food value-chain. The SMEs contribute in forming goods and services.
Thus, they help in forming the GDP (Gross Domestic Product) and increasing the national exports and investments,” she said.
Dr Nyoni said the facility would be accessed through the Women’s Bank.
“The fund will be accessed through the Women’s Bank. What we have said to the bank is that it must create different products for the beneficiaries. We have classified those that will benefit under the facility as greenfield, informal and micro enterprises and SMEs and in each of these we are emphasising on the productive sector. We are still working on the modalities to see how the facility will be disbursed,” she said.
Dr Nyoni also said the facility would be used to improve women entrepreneurship.
“We are encouraging all entrepreneurs to apply for this fund, but also, we really want women to grow economically because it’s only 16 percent of women who own big companies. We intend to use this facility to ensure that those that have gone down (due to the effects of the coronavirus) will come up and those that intend to grow can also access it for growth,” she said.
Dr Nyoni further hinted that her ministry was working on clustering SMEs so as to enhance their contribution on their specific sectors and the economy in general.
“We are now going to cluster SMEs and make sure the value chains are classified according to clusters, for instance for the leather value chain, we will start from the farmer to the collection of skins up to its tanning, to the people that make leather products and finally the marketing side. SMEs have been identified as productive drivers of inclusive economic growth and development in the country and around the world,” she said.
The cluster approach entails the identification and grouping of SMEs in a locality involved in similar business activities such as horticulture or dairy into a single cluster. Capacity building and credit programmes are then tailored to the specific needs of the cluster. Bulawayo Chamber of SMEs chairman Mr Energy Majazi said the facility comes at an opportune time when most SMEs’ operations were reeling under the effects of Covid-19.
“We greatly welcome the move by Government to cushion MSMEs of particularly those that have formalised their businesses. These are in need of assistance since they have abided with Government’s requirements,” he said.
Mr Majazi however, said there was a need for Government to engage SMEs organisations to ensure the fund is disbursed to deserving beneficiaries.
“Although initiatives by Government are good, we feel SMEs associations should be consulted when it comes to disbursement modalities. As SMEs we operate or participate in different sectors and we are aware of those that are in sectors that play an integral role in reviving the country’s economy and feel these should be given first priority,” he said. – @DNsingo
