Chamber of SMEs calls for formalisation to boost business accountability

Herald Reporter

The national advisor to the Chamber of Small and Medium Enterprises (SMEs) Mr Last Matema has called for the formalisation of business associations in Zimbabwe.

He said there is need for registration and accountability within these organisations, stating that this is essential for the formalisation of individual SMEs.

“We cannot formalise the individual SMEs without formalising the business associations,” Mr Matema said.

He said the chamber has formally written to the Minister of Small and Medium Enterprises Monica Mutsvangwa urging immediate action on this matter.

Mr Matema acknowledged the challenges posed by the current budget allocations for the sector, noting that while they are agreeable to the funding provided, it is insufficient given the state of the micro, small, and medium enterprises (MSME) sector.

“The limited fiscal space is a direct result of the informal nature of many businesses,” he explained, stressing the need for collaboration with the parent ministry in addressing the issue.

As part of this initiative, the chamber is advocating for business associations to be mandated to register their members as micro, small, or medium enterprises.

Mr Matema proposed a clear classification system that can categorize businesses as formal, informal, or semi-formal, thus establishing a framework for better accountability and governance.

One of the key motivations behind the push for formalisation is the potential for preferential treatment in Government regulations, including tax exemptions and opportunities in public procurement.

“We are pushing for such certification to be recognised, creating a ‘carrot’ for formalisation,” Mr Matema said.

The Chamber of SMEs believes that this approach will not only enhance accountability within the sector but also promote a more structured and sustainable business environment.

The formalisation of SMEs could play a pivotal role in fostering economic growth and stability.

The chamber’s call has resonated well with various stakeholders who see the potential benefits of a more organised SME landscape.

As discussions continue, the pressure is on both the chamber and the Government to work collaboratively in addressing these critical issues for the benefit of Zimbabwe’s economy.