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Oliver Kazunga Senior Business Reporter
THE government has started the process of promoting linkages between small and medium enterprises and large companies to stimulate economic growth in line with the Zimbabwe Agenda for Sustainable Socio-economic Transformation (Zim-Asset).
This follows the recent upgrading of 100 SMEs in Bulawayo into formally registered enterprises.
Zim-Asset is anchored on four pillars namely food security and nutrition; social services and poverty eradication; infrastructure and utilities as well as value addition and beneficiation.
Speaking during a tour of Leaford Electric Rewinds and Kango Products in Bulawayo on Friday, Small and Medium Enterprises and Co-operative Development Minister Sithembiso Nyoni said the upgrading of SMEs was part of efforts to fulfil the objectives of Zim-Asset.
“The upgrading of SMEs was part of fulfilling Zim-Asset which has four sectors. In fulfilling the objectives of Zim-Asset, my ministry is focusing on the beneficiation and value addition. My ministry has started the process of establishing linkages between SMEs and established companies. Today, I am following those entrepreneurs that we recently upgraded so that we link them with big companies like Kango Products.
“This company manufactures a lot of products but people (informal traders and SMEs) travel as far as China to import the products for resale yet locally these are available from companies such as Kango Products,” she told informal traders and SMEs representatives that accompanied her during the tour.
Minister Nyoni said the government through her ministry was looking forward to seeing informal traders diversifying their operations.
“We want the informal traders to diversify. For example, we would want to see traders at flea markets on their stands diversifying into selling locally manufactured brands from companies such as Kango Products. This will promote economic growth,” said Minister Nyoni.
She said the prevailing liquidity crunch was impacting negatively on the business operating environment across all sectors of the economy.
“In cases where you are financially challenged, I urge you (informal traders) to form savings and credit unions so that on weekly basis you will be buying wares for resale from Kango Products. Our economy is not growing because the available cash circulating in the economy is exported to China as you import,” said Minister Nyoni.
“We want our local people to support Zim-Asset so that the economy is transformed.”
The government has recognised the critical role played by SMEs in economic development promoting their registration and formalisation of their operations.
A recent survey by the World Bank showed that SMEs in Zimbabwe have the potential to contribute $7 billion a year to the economy.
Official figures also show that 5.7 million people in Zimbabwe are employed in the SMEs sector.
The contraction of mainstream economic activity has occasioned the emergence of SMEs.
The SMEs sector contributes to output and employment creation and they are also a nursery for the larger firms of the future.
One of the most successful developing countries over the last 50 years, Taiwan, was built on a dynamic SME sector.
The sector requires adequate funding to unlock its potential as a source of rapid economic growth, poverty reduction, bridging present supply gaps in the economy, and uplifting living standards in Zimbabwe.
Bongani Ndlovu