The Sunday News
Judith Phiri, Business Reporter
THE Zimbabwe National Chamber of Commerce (ZNCC) has said the country’s banking institutions are letting down most businesses in the country by failing to financially support them, leading to most Small to Medium Enterprises (SMES) failing to start or resuscitate their businesses.
ZNCC Matabeleland regional chairman Mr Lewis Herbst said corruption was one of the least problems SMEs were facing, but a major obstacle were banking institutions that were failing to financially assist them.
“Financial institutions are not supporting the SMEs making them fail to resuscitate their businesses. Most of them have old machinery that require more usage of power and that consumption of electricity leads to the cost of the product shooting higher. These companies and industries need to change all their machinery and put new ones in order to become competitive.
“As a result of that you need an invest from the banks but the banks are not granting that investment. With the procedures that you have to follow its impossible, hence there is no support mechanism or structures in place,” he told journalists at a press briefing Monday.
He added that when companies approach a bank with a business proposal that shows that their concept is powerful and viable, most of the times they are told that it will be sent to the head office in Harare or South Africa and it takes much longer to get a response.
Mr Herbst also noted that most business people end up finding their own way to the head office in Harare to get assistance.
“But if you get into a plane to Harare to meet up with the branch manager over there and have a discussion, you are most likely to have a positive direction of where you are headed at.
“But of course, again its who you know that allows you or grants you access to meet with the branch manager directly. So as far as resuscitating the industry in Bulawayo is concerned, I think the financial institutions need to step up and start looking at companies or individual organisations not as money making machines but invest in them,” added Mr Herbst.
He also highlighted that a position whereby a branch manager can also make a decision and facilitate for investment to SMEs, it would be a step towards allowing Bulawayo companies to be able to develop and grow.
In terms of the African Continental Free Trade Agreement (AfCFTA), Mr Herbst said it had the potential of becoming the largest in the world and had vast potential.
“We are creating a single market that allows us to break the trade barriers between the different countries. Once we do that then we have already begun the next step in the process. There is trade diversity, economic boost and easier settling of trade disputes among others. With AfCFTA there is potential of growing the SMEs which contribute 80 percent of the core business and trade. So, we have got to boost that across Africa,” he said.
He also noted that AfCFTA had the possibility of protecting women traders as 70 percent of the women traders are informal.
Mr Herbst added: “So if you find ways to formalise those women imagine how much risk they go through when they are doing what they are doing informally. Now by introducing tariffs and a system where there is free trade you are automatically protecting them from violence and harassment. Also, indirectly you are formalizing an informal sector.”
ZNCC national vice president Mr Golden Muoni said as a chamber they were working on educating citizens and businesses of the significance of the AfCFTA, which was operationalised in January this year, at a trade conference pencilled in for 7 May in Bulawayo.
He also noted that looking at the AfCFTA there was about 1,2 billion people who are becoming consumers and it was now overdue for Africa to implement such a trade agreement.
Mr Muoni added: “Africa has been confined in a number of small markets in SADC where we had the Eastern bloc for countries such as Nigeria and Kenya, there was the Western, Southern and Northern ones as well. This has not been good enough for us, but the AfCFTA has presented an opportunity to change the way Africa was operating. We should trade more amongst ourselves.”
Mr Muoni added that as a chamber they have looked at themselves to say what is it that they need to do as a way of conscientizing businesses, as a way of encouragement.
“As Zimbabwe where do we want to go in this matrix of the bloc which has come to birth? How much prepared are we and how much information do people have about it, in terms of the SMEs companies and the citizens? There are vast opportunities which come with the AfCFTA so as a chamber together with the Government and the media should play a role in facilitating and making sure that the citizens, companies and business people understand the meaning of it,” added Mr Muoni.
He also noted that it was high time that businesses do away with crying over sanctions hindering their business growth and fully utilise the opportunities presented by the AfCFTA.
