Trade and Industry for SME programmes

The Ministry of Trade and Industry (MTI) continues efforts to uplift Small and Medium Enterprises (SMEs) through the implementation of support programmes such as the Equipment Aid Scheme (EAS) and the Sites and Premises Development (SPD) programme.

MTI primarily spearheads trade and industrial development in Namibia as well as promote and attract local and foreign investment.

But the achievement of these objectives depends largely on the establishment of appropriate mechanisms that would enable investment, trade and industrial activities to flourish.

The MTI currently runs certain programmes to ensure internal growth, such as the SPD and the EAS. It also makes provision for technical and advisory services, under which SMEs can be assisted to establish viable businesses, increase their competiveness in the market, increase their productivity and streamline their operations.

An MTI representative, Albert Christiaans states: “The overall objective of the EAS is to reduce the cost of business set-up, operation, expansion and output of SMEs, not to forget the provision of production equipment and machinery. SMEs are expected to improve the quality of their products and services, as well as increase their productivity and competitiveness. We buy the equipment on behalf of the clients but we do not give them the money.”

Christiaans testifies that the SPD is an ongoing MTI programme to construct various mechanisms like multipurpose SME modules, industrial parks and common facility centres. These facilities, he divulges, are availed to business operators, especially SMEs, at affordable rental charges because the overall objective of such a programme is to reduce the cost of business set-up, operational expansion and the output of SMEs.

Namibia has a competitive incentive and fiscal regime complemented by a low cost and conducive business environment that adds to its appeal as the most ideal location for domestic and foreign investors. The cornerstones of this environment are the Foreign Investment Act and its provision for a Certificate of Status Investment, the special incentives for manufacturers and exporters and the export processing zone (EPZ) incentives.

Most SMEs have, in the past, complained about the lack of guidance in running their businesses. Therefore, the ministry has come up with a mentorship services and training initiative to upgrade raw skills and transform them into professional tools.

Trade and Industry Minister, Calle Schlettwein has, in the past, spoken about how exporting raw materials deprives the local economy of growth: “The reality that we face is that Namibia is a de facto colonial economy. Our reliance on the primary sector for the export of raw materials creates jobs and wealth in those economies to which they are exported, not in our own. Therefore, we cannot achieve the required level of economic growth to ensure prosperity for all by remaining primarily an exporter of raw materials and an importer of consumer goods.”

And that is exactly what his ministry now complements through management capacity building programmes designed to transform SMEs into professionally crafted entities.

Christiaans explains that, “SMEs usually lack the required management capacity and cannot afford costly support services like financial and legal services, human resources and training. Upgrading the skills of all types of workers, including business owners and managers is crucial for the increased performance of SMEs. For example, a business plan is fundamental to the successful implementation or management of the business. It is used as a management tool, to attract possible investors and to source finance.”

In addition to that, he says, basic business management training should be provided to all recipients of SME support services of the ministry in certain areas, such as financial management, human resource management, communication, production and operations management, marketing and sales management, distribution, customer care services, plan and forecast, organise, lead and control.

The ministry is responsible for the development and management of Namibia’s economic regulatory regime, on the basis of which the country’s domestic and external economic relations are conducted. It is also responsible for promoting growth and development of the economy through the formulation and implementation of appropriate policies. This is meant to attract investment, increase trade, as well as develop and expand the country’s industrial base.

Guided by this principle, the ministry undertakes feasibility studies during the project initiation phases for which Christiaans explains, ‘takes place during the project initiation phase and is made before significant expenses are engaged. The study analyses the current modes of operation and requirements and then evaluate alternatives and agreed upon courses of action. The conclusion and recommendation of the study will determine if a production decision will be undertaken’.

Christiaans thus urges SMEs to submit their applications regardless of their business types.

“The objectives of the SME support services programmes are a bit diverse. There is promotion and expansion of resource-based and value added activities including the promotion of entrepreneurial spirit, skills and development. Generation of wider employment opportunities and accelerated expansion of existing businesses to create increased opportunities for employment creation is also one of the activities. Each applicant stands an equal chance of getting assistance but sadly, not everyone will be fortunate,” he stresses.

The bottom line is that the SME sector is crucial to the nation’s sustainable employment creation and economic growth. PF