Sundaymail Editor
AS the formal economy continues to spit out jobs, the informal economy grows. But to date, there have been difficulties in growing the small and medium enterprises and make them contribute meaningfully to local economic growth. Government is seized with the matter. Apart from contracting a US$3 million concessionary loan to finance micro and SMEs, Government has also guaranteed a US$100 million commercial facility to finance the purchase of equipment for small-scale miners. Our Business Reporter Lorraine Muromo engaged the Minister of SMEs and Co-operatives Development Sithembiso Nyoni on Government’s other plans to ensure the informal sector contributes more to the national economy.
Q: There is a lot of economic activity in the informal sector. How do you rate the performance of SMEs in Zimbabwe?
A: So far so good. The industry is growing extremely fast and the SMEs are performing excellently and accommodating the unemployed and all those that want to make money honestly.
Q: But most of them still find it difficult to register companies, pay tax and join the mainstream economy. What is Government doing to ensure that these processes are simplified?
A: There are ongoing discussions with the Ministry (of Justice, Legal and Parliamentary Affairs) to try and simplify the regulations. I cannot shed much light since plans are still sketchy and details might be misplaced, but the SMEs can be assured that we are working on that to make sure things are done systematically.
Q: How much does Government believe is circulating in the informal sector?
A: It is not what we believe but what has been reported by the World Bank, that there is over US$7 billion that is circulating in the informal sector.
Q: What steps have been made to tax in the SMEs?
A: Our main priority as a ministry is to facilitate the growth of SMEs and ensure that their skills are improved and polished so that they join the mainstream.
We are working with the local authorities to ensure tax is collected smoothly; so, it’s safe at the moment to say tax is being collected from the SMEs by local authorities.
We are also working in conjunction with the Ministry of Local Government, Public Works and National Housing. Zimra (Zimbabwe Revenue Authority) is also being partnered to ensure that initiatives and incentives are put in place so that SMEs willingly pay their taxes.
Q: What are the future prospects of the sector?
A: The prospects are clear that the main aim is to grow, expand and prosper at the same time mainstreaming the informal sector into formal trade.
Q: How much has been budgeted for SMEs through the Small Enterprises Development Corporation (Sedco) this year?
A: As you know, the money that is provided is very small; we have been given US$3 million from the Arab Bank for Economic Development in Africa and, as we speak, that money is being administered by the Ministry of Finance.
People are being urged to apply for loans. An individual is entitled to US$20 000 and is expected to start paying back after three months grace period.
Q: What are Government’s priorities when it comes to the development of local entrepreneurs?
A: Our main priority is to grow them, facilitate them and ensure that their skills are polished; thus, making it easy to mainstream them.
Q: How is the Incubation Centre going to benefit local entrepreneurs?
A: The Incubation Centre will simply improve the local entrepreneur’s skills and professionalise them in a bid to mainstream them.
Q: What other projects are being planned for SMES this year?
A: We respond to the projects that are initiated by the SMES, we do not plan for them.
They should lead and lay the foundation of what they want to do and we simply support them.
The empowerment of the informal sector would lose essence if we took the leading role from the informal sector.
Online Reporter