adminservants being thrown into the streets, and Africa nations having to battle with high employment rates.
In Zimbabwe the SAPs were closely followed by the collapse of the economy. While Zimbabwe was still battling to find ways of improving its economy, the country was further slapped with illegal sanctions by the West for daring to repossess land that had been forcibly grabbed from the indigenous people by the colonial system.
The sanctions were meant to cow the Zimbabwean Government into changing the trajectory that it had taken — to empower its people. The net effect of these sanctions has been the closure of companies and high unemployment rate.
Zimbabweans did not cry, but became their own employers and established small companies that have kept the country’s economy running.
Though the growth in the sector has been slow, the SMEs now account for the bulk of the country’s labour force and shows potential for the economy.
The sector accounts for over 80 percent of the country’s total labour force.
Growth in the sector has, however, been greatly affected by the shortage of resources, requisite skills in management and the financial sector’s unwillingness to assist the sector. As such they have remained focused at satisfying the local market.
Despite these setbacks, some of these small enterprises are aiming higher and are fast moving to claim their positions in the manufacturing and construction sectors.
They have managed to grow their businesses in the face of shortage of resources and a generally unsupportive financial sector.
Fantasy Destiny managing director Mr Finejoy Mlambo said time has come to grow the country’s SMEs sector so that they can take over the space left by the closing foreign firms.
He said it was time the sector begins focusing on producing goods not only for the local market but also for the export.
“The country and small companies have watched while the retail sector has been serviced by foreign goods and that should end now.
“Most of the people that have started the companies were once employed by these large firms and hence have all the prerequisite skills to grow their companies.
“As a company, we are set to make an impact in the furniture manufacturing industry. The company was founded by people who once served in big furniture companies but were laid off when the economy was coughing.
“This is the only way we can honour President Robert Mugabe who has advocated and spearheaded, the indigenisation and empowerment policies,” he said.
Fantasy Destiny has since become a competitive indigenous company in a position to sell its products to the big furniture shops in the country.
“Some of us had to leave the companies in response to the call for indigenisation by our Government. We acknowledged that we had the expertise and skills to start and run our own company. Starting with an employee complement of five, the number grew to 15 before restructuring to the present eight because of financial constraints.
“According to the plans that we had when we first set up the company, we have succeeded. The company now supplies big chain shops and cannot meet the increasing demand.
“We manufacture lounge suites in leather, velvet and other materials as well as do repairs. The company aims to be one-stop-shop soon by establishing a bed manufacturing plant. Though we are still small, we are already supplying big chain furniture stores.
“We set up to show our fellow blacks that it can be done and I hope we have started sending that message,” he said.
Echoing President Mugabe’s recent call for the need for indigenous companies to take over the company Mr Mlambo said the final step towards indigenisation was the need for local people to establish companies that can start value addition and earn more for the country.
Another small-scale businessman, Mr Wilbert Chazunguza of Bandridge Manufacturing, which specialises in steel products said indigenous companies were still to create an asset base that can be used to secure meaningful loans for the expansion of their production lines.
“As such we have been in a hand-to-mouth situation. As a small and growing company we applaud what the Government is doing in opening up opportunities for the sector but it is unfortunate that it has not been completed by the financial sector.
“Securing capital remains a challenge. When you finally get the money, the interest rates are exorbitant and repulsive for any meaningful investor. But given enough resources the sky is the limit for Zimbabwean companies,” he said.
He added: “If successful that will push banks to avail the much needed expansion resources to our small companies.
“The indigenisation and empowerment programme has indeed pushed us into craving to do the best for the country hence the decision to move from backyard to start producing quality furniture for big chain stores and city furniture shops.”
He welcomed the move by the central bank to direct banks to realign their portfolios to ensure it directs a percent of the total loan book towards the SMEs sector.
Recently Governor of the Reserve Dr Gideon Gono instructed all banks to reserve at least 30 of their loans to financing the small and medium enterprises sector.
This will avail the much needed resources needed in the expansion of the sector which is now the country’s economic backbone.
Former Minister of Higher Education, renowned educationist and politician Dr Sikhanyiso Ndlovu, concurred on the need to grow the sector saying a lack of employment opportunities had increased the need for training to ensure that those in the small enterprises sector start competing with established companies and can enter the regional markets.
“We should have a shift in the country’s education system to ensure that we produce graduates who are business-minded and willing to be employers. The country should be moving towards equipping youths with vocational and entrepreneurship skills to ensure that we are abreast with development elsewhere,” he said.
Economic analysts say small and medium companies could be the country’s answer to the growing trade deficit that saw exports totalling US$3,6 billion compared to imports bill that stood at US$7,8 billion last year.
The analysts said it was high time Zimbabwe unlocks the potential of the sector and make sure they move from peripheral and supporting roles to large corporations.
Supporting the SMEs has paid dividends in countries like India, Japan and China, where these indigenous companies have grown to become not only the base of the economies but pushed the nations into industrial hubs in the developing nations.
A recent survey 410 SMEs by IHS, a leading global research company, revealed that small and medium- sized companies trading on the international market were twice successful than those operating locally.
This in itself calls for the expansion of the focus of companies in the sector if they are to meaningfully contribute to the development of the country.
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