SMEs contribute 12% to GDP
Government’s deliberate policy to promote small to Medium Scale Enterprises (SMEs) is now paying homage with the latest statistics showing that micro- enterprises are now contributing about 12% to the total Gross Domestic Product (GDP).
This means that the SME sector is growing and will soon be competing with other key sectors like mining, banking and which contribute significantly to the GDP.
Statistics released by the Ministry of Industrialisation, Trade and SME Development (MITSD) show that the 33 700 SMEs operating in the country are catering for 160 000 employees and have potential to create better employment opportunities if well supported.
However only 15 000 of them are registered and are liable to pay tax if their income exceeds the Value Added Tax (VAT) threshold of N$500 000 set by the Ministry of Finance to allow Namibian companies to grow.
The MITSD recently compiled a draft national policy to formalise the released statistics and track micro institutions contribution to the economy.
Trade Ministry, Deputy Permanent Secretary Dr Michael Humavindu told The Villager that the formalisation process will help ensure sectoral planning, and the introduction of key interventions.
“The MSME policy’s stated objectives is to help the sector to become competitive at local, regional and global levels, thereby ensuring the sector’s ability to access more markets with the potential to raise their contribution to the local economy enormously,” Humavindu said.
Currently, there are a myriad support schemes available to the sector for MSMEs, which are at times also fragmented.
He further said even in the donor, private and civil sectors, there are support schemes available, noting that the MSME Policy advances principles which support the integrated coordination of such support schemes to maximize their developmental impacts.
“Ensuring appropriate institutional frameworks thereto is thus a pertinent requirement to support the integrated coordination principle. The MSME Policy further advances the agenda of an MSME Development Agency towards such an integrated coordination agenda,” Humavindu explained.
The MSME Policy advances a key policy principle that clearly state that the MSME sector is to be recognized as a viable and indispensable agent for economic development and poverty reduction.
The revised MSMEs Policy comes at the right time as the former SME Policy and Programme which was in place since 1997 has not been reviewed since its inception and introduction, regardless of the number of changes having taken place in various facets of SME enterprises’ development as well as the macro and micro-economic environment of Namibia.
Moreover, the previous policy did not mirror the needs of micro enterprises nor on the coordination, implementation and monitoring and evaluation of SME development programmes.
The policy also did not provide the viable treatment of an appropriate institutional framework for the attainment of its stated objectives.
As a result, many governmental institutions as well as organisations from the private sector and civil society offer a wide range of developmental support programmes in a fragmented and non-coordinated way.
This potentially leads to the duplication of efforts, and a sub-optimal allocation of resources. Consequently, such scenarios hamper efficient support to MSMEs.
The MITSD has thus realised the need to review the current SME Policy and Programme to take these structural changes and needs into account by launching the MSME Policy.
The revised National Policy on Micro, Small and Medium Enterprises in Namibia is allied to the national objectives as articulated in Vision 2030, the National Development Plans (NDPs) as well as the Industrial Policy and its recently-adopted implementation framework and strategy (Growth at Home).
Additionally, the updated policy proposes an updated definition for MSMEs, addresses the challenges faced by MSMEs and offers responses aligned to the new paradigms with respect to MSME financing and business advisory support services.
Humavindu noted that the launch entails the availing of the draft MSME National Policy for discussions and further input with the Namibian nation at large.
The launch also served to inform the Namibian nation at large as to the start of regional consultations of the MSME Policy in all 14 regions of the country, starting on 24 August 2015 in Opuwo, Kunene region.
“We will have a final wrap-up event in Windhoek on 6 October 2015 to reflect on the regional consultations, and thus avail the final draft of the MSME Policy to be submitted to the Hon Minister of Industrialisation, Trade and SME Development, Immanuel Ngatjizeko.
Details of the consultations are appearing in media adverts as from 17 August 2015,” he said.