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KEEPING YEAR OF SMES ALIVE

03/07/2020 23:10:00 By Nathi Gule

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Before the coronavirus pandemic hit our shores, Eswatini had declared this the year of Small Medium Enterprises (SMEs). Despite the heavy odds against them, this could still be the SMEs year.

But to fulfill this declaration will now take triple, if not quadruple, efforts from all stakeholders to give the suffocating soul of the economy the much needed ventilation.
For example when the lockdown was announced in Botswana, there was a trending post that stated that there had been a directive that all SMEs must be paid within 24 hours.

This made sense because if there is ever a time that small businesses ever needed to be liquid and continue their impactful role in the economic development of nations, then it is now in this crisis.

Dire

Without SMEs supporting countries in the circulating of money, then thousands are in dire straits as evidenced by the businesses closing shop and this also affects many households.
The Botswana case was a great example of sterling leadership in crisis and brilliant thought leadership at work. Many countries are following suit and looking at ways that this pandemic will not extinguish their private sector.

This includes relaxed loan repayments, reviewing taxation, empowering locals more than others first and so many other robust, yet welcome initiatives.
Even here we have seen how the Prime Minister Mandvulo Dlamini and his cabinet team in particular the Minister of Commerce Industry and Trade Mancoba Khumalo have been seeking ways to try and open up the economy without obviously risking more infections.

However, they have the odds stacked against them as in Eswatini the Ease of Doing Business ranking is quite eye-watering. This means there also needs to be reforms aimed at easing the conducting of business of many and making this a more business friendly environment at an accelerated rate.
It is commendable that this was one of the main pillars of the Government Strategic Roadmap, but obviously now any reforms need to be done with some more urgency.

When someone is in a critical state you do not drive them to hospital in a normal vehicle but you call an ambulance that can speed them there. That is what SMEs need now from all quarters.

We have just entered the second half of the year. For many the days are the same though, if not worse. The new normal has brought about despair and anxiety in all sectors and the job losses for thousands have compounded the situation.

The question on many people’s minds looking back at that bold declaration of 2020 being the SME year is; “Is this still the year of the SMEs?” And I boldly believe it can still be with collaborated efforts.

Not sure if you have noted this but since the pandemic started many people have been digging deep into finding new ways of doing business. My timeline and WhatsApp status is now filled with new business people especially those who are selling clothing online.

These innovative souls are providing convenience, choice and accessibility and personal customer service. They need to be assisted to be able to now make those businesses into formal trade so they can be able to benefit the socio-economic development of the country.
And it starts with looking at ways to grant them no-hassle permits to operate instead of the long route that many SME currently face when they seek to be a part of the ecosystem.

Many give up at the first hurdle just discouraged by the paperwork and the startup costs. Yet in reality the fact that they have the passion, the drive and market, then they should be supported to operate easier.

Amendments

Amendments into the company registration and licence renewal processes will allow for more micro businesses to come into playing a vital role in the economic development of the country. It is understandable that all the processes that were put in place where done so that businesspeople could flourish and do so in a safe enabling environment. That is not in doubt.

But they need to evolve with the times. They may have worked then but in the state of crisis we are in now we need even temporary permits that can allow those that have lost jobs to be able to start up their own companies without worrying about where to find lots of money for the documentation process as well as an office.

Actually the new normal has taught us that it is quite possible to effectively run a company without a physical office and this cuts off a lot of rent and welcome many new players into the market.
I am certain though that these are conversations that are being held by our more than capable government and its skilled, experienced and qualified civil service. Conversations centered on win-win solutions for SMEs in times of crisis.

One analyst noted that to prevent unemployment, poverty, and food insecurity rates from further skyrocketing, small and medium enterprises around the globe can and should play a crucial role in this time of despair. This they noted especially for low-income countries.

However, to do that, these experts concurred with me that SMEs need, among others, increased credit availability and other forms of support.
It is therefore befitting that even the Youth Enterprise Revolving Fund CEO Bhekizwe Maziya noted that the sectors that continued to operate during lockdown are those that young people must consider for their next business ideas.

Hopefully this was heeded and the next round of applications will have more innovative industries. It has also been noted by global financial bodies that in developing economies, SMEs make a significant contribution to local employment and to overall gross domestic product (GDP).
An economic downturn due to COVID-19, to which SMEs are especially vulnerable, hits developing economies at the heart.

And to keep that heart pumping a business unusual approach is required from all stakeholders. I have seen some local companies commit to paying SMEs quicker than in the past.

That is more than commendable. That coupled with more supporting reforms will ensure that as we start the second half of this year, the vision for this to be the year of SME is realised. The potential for it to be realised is still there, but only with the right supporting mechanisms.