By Maricho Reporter
AS THE world commemorated the International Day of Micro, Small and Medium Enterprises (MSMEs) this week, the United Nations has called for comprehensive policy interventions particularly in trade facilitation and establishment of microfinance institutions catering specifically to MSMEs, to ensure their increased participation in international trade.
The World Trade Organisation (WTO) says that MSMEs participation in international trade has remained limited for reasons that include lack of relevant skills, lack of knowledge about international markets, non-tariff barriers, cumbersome regulations and border procedures, and limited access to finance, in particular trade finance.
According to the International Labour Organization (ILO), MSMEs make up more than 90% of all businesses and account for a staggering 60 to 70% of employment and roughly 50% of global GDP (ILO, 2019), figures which underscore the profound impact of MSMEs in fostering economic resilience and sustainable development.
But MSMEs in Zimbabwe face significant challenges which include:
- Limited Access to Finance: Only 41% of MSMEs in least developed countries, including Zimbabwe, report access to finance as a major constraint (World Bank, 2020).
- Technological Barriers: Lack of access to modern technology and digital tools inhibits productivity and global competitiveness.
- Market and Supply Chain Access: Restricted integration into global markets and supply chains limit their growth potential.
Regulatory and Administrative Burdens: Complex regulations and high compliance costs add to MSMEs’ difficulties.
This is according to Edward Kallon, UN Resident and Humanitarian Coordinator in remarks at the Commemoration of International Day of Micro, Small and Medium Enterprises.
Kallon said to harness the full potential of MSMEs and align their contributions with the Sustainable Development Goals (SDGs), strategic interventions are required which include digital transformation that includes supporting MSMEs in adopting digital technologies through training initiatives and subsidies is critical.
“There is need to improve ICT Infrastructure by investing in robust ICT infrastructure to facilitate MSMEs’ engagement in the digital economy.
Financial Inclusion Programmes that provide MSMEs with affordable credit and comprehensive banking services are critical,” said Kallon.
“Trade Facilitation by simplifying trade procedures and reduce barriers to market entry for MSMEs is important,” added Kallon.
He said there is need to support Supply Chain Integration through fostering partnerships between MSMEs and larger firms to promote integration into established supply chains while streamlining administrative processes for business registration and compliance, was also critical.
Amidst economic downturns, hyperinflation, and a challenging business environment, MSMEs in Zimbabwe have continued to thrive, providing livelihoods, and fostering community development including in the informal sector.
“Just to share, one of among thousands of unsung heroes and heroines, is the story of Ms. Chipo (name changed for privacy), an entrepreneur from Harare. When the COVID-19 pandemic hit, her small garment business nearly collapsed. However, leveraging her ingenuity, she pivoted to producing face masks. Today, her business not only survived but expanded, employing more women in her community, and contributing to the local economy,” said Kallon.
In marking the occasion, the UN Secretary General, Antonio Guterres said: “The MSMEs require policies, support structures and investments that promote their growth and formalization – and, in turn, help communities prosper, uplift the most vulnerable, and pave the way for more sustainable and just livelihoods.”
