admin
Dumisani Nsingo, Senior Business Reporter
THE five percent export incentive scheme which comes with the use of bond notes is expected to spur Small to Medium Enterprises (SMEs) to enhance their exports subsequently improving their contribution to the country’s Gross Domestic Product, a Cabinet Minister has said.
Small to Medium Enterprises and Co-operatives Development Minister Sithembiso Nyoni said the SMEs sector through its cross border trading activities was the biggest conduit of both exports and imports in the country.
She said SMEs were exporting numerous products into a number of countries through the Common Market for Eastern and Southern Africa certificate of origin but most of their contribution was not documented on the country’s data base.
“There are a lot of products that SMEs are exporting but what we (the Government) need to do is what ZimTrade has started, which is to train them to export professionally so that they can be given incentives but otherwise they are exporting informally.
“So we need to ensure that we help them (SMEs) to do it (exports) formally and professionally so that they show on our export books…The Reserve Bank of Zimbabwe (RBZ) is going to give incentives through the use of bond notes that’s going to encourage a lot of SMEs to export,” said Minister Nyoni.
In his mid-term monetary policy review, RBZ governor Dr John Mangudya said bond notes in denominations of $2 and $5 would be issued before the end of this month as part of the $200 million export incentive facility guaranteed by the African Export-Import Bank.
He also said the adoption of bond notes comes in the context of incentivising production, a long term strategy for economic growth frame-worked along export incentive scheme of up to five percent to promote export of goods and services.
Exporters are expected to receive proceeds in US$ and the incentive would be credited to their US$ accounts in US$ currency.
An exporter would then transact through Real-Time Gross Settlement systems, make foreign payments for imports of goods and services and transact freely within the multi-currency exchange system.
Minister Nyoni said the Government would soon avail $15 million through Treasury with an additional $7 million expected to be injected by Arab Bank for Development in Africa for SMES.
The $22 million is expected to go towards funding SMEs in the manufacturing and other productive sectors of the economy and would be accessed through the Small Enterprises Development Corporation (Sedco).
“I think with funding that is coming, the policies we have put in place and the banks that are opening windows as well as development partners that are coming on board we will see a lot of SMEs contributing to the fiscus because they feel that before they were isolated. Everybody was looking at SMEs as the second economy now people are beginning to realise we (SMEs) are the economy so we need to be treated with the dignity we deserve,” she said.
Minister Nyoni said the Ministry of Finance and Economic Development and the Zimbabwe Revenue Authority (Zimra) should come up with tax incentives to encourage SMEs to contribute effectively to the country’s fiscus.
“If Zimra or the Ministry of Finance and Economic Development was to give incentives to SMEs…giving them tax holidays and really incentivising SMEs to pay taxes we would have a lot of money going into fiscus but for now SMEs feel victimised by us who claim taxes yet we plough very little towards them,” she said.
Minister Nyoni said her ministry was working on numerous policies to support the growth and visibility of SMEs towards enhancing their contribution to the country’s economy.
“The SMEs sector has done a lot, we have created over five million jobs but what now remains is for us to organise those jobs to visibility and sustainability…but we are leading in creating self-sustaining jobs,” she said.
@DNsingo
Online Reporter