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Friday, 30 March 2012 12:07

Zimbabwe: Country Needs SME Export, Promotion Agency

By Gift Mugano***

HARARE, Zimbabwe, March 30, 2012 (The Herald) - DID you know that there are 23 million SMEs in the EU which represent 99 percent of businesses, and are a key driver for economic growth, innovation, employment and social integration?

The European Commission came up with various legislation aimed at promoting successful entrepreneurship and improve the business environment for SMEs, to allow them to realise their full potential in today's global economy.

Recently, the EU adopted in June 2008, the Small Business Act for Europe (SBA) reflects the Commission's political will to recognise the central role of SMEs in the EU economy and for the first time, puts into place a comprehensive SME policy framework for the EU and its Member States.

The European Commission works on broad policy issues affecting entrepreneurship and SMEs across Europe, and assists SMEs through networks and business support measures.

It helps existing and potential entrepreneurs to grow their businesses, giving special attention to women entrepreneurs, crafts and social economy enterprises.

The Small Business Act for Europe (SBA) embodies the EU's commitment to SMEs and entrepreneurship. Member states have committed to implementing the SBA alongside the European Commission in an effort to make the EU a better place to do business.

Since SMEs have to be supported at local level, the Commission helps member states and the regions to develop policies aimed at promoting entrepreneurship assisting SMEs at all stages of development, and helping them to access global markets. The identification and exchange of good practices are key elements of this policy.

The European Small Business Portal gathers together all the SME-related information provided by the EU that ranges from practical advice to policy issues, from local contact points to networking links.

Zimbabwe has experienced growth of SMEs after the collapse of the formal economy. What is disheartening though is the fact that although Government has come up with various measures to support SMEs, the results on the ground do not reflect that we are winning.

Many stakeholders had been shy to support SMEs but would rather be comfortable to call them informal sector yet these are the same businesses that command European economies.

To make matters worse, big companies compete with SMEs instead of forming business linkages that will result in a win-win situation.

Zimbabwe must come up with a Small Business Act that compels the setting up of an SME Export Promotion Agency.

SME Export Promotion Agency to focus entirely on the SMEs while ZimTrade concentrates on big established companies. The form of specialisation will bring better results.

SMEs can be the answer to Zimbabwe's worsening trade deficit. Zimbabwe's foreign trade has always experienced a deficit with an increase in demand every year for foreign goods for national development as well as for consumption and with a static trend in export growth.

The SMEs Export Promotion Agency will consider export promotion as one of the key initiatives and strategies to reduce the volume of trade deficit between Zimbabwe and its trading partners.

Its mandate is to take all such measures to support the SME sector in its effort to develop and promote export of various products and services from Zimbabwe.

It will then come up with various mechanisms, which include development of an Export Promotion Programme that is intended to guide the delivery of its SME export promotion interventions.

The Export Promotion Programme will be intended to facilitate penetration of SME products and services into the global markets and facilitate international business linkages.

The Export Promotion Programme, which will be in line with the Small Business Act, is two-fold the international business linkages and export promotion.

The international business linkages programme outlines target international linkage areas that the Export Promotion Agency could forge in pursuit of facilitating exports.

Export promotion, on the other hand, entails issues of export marketing, trade and investment missions, participation in international fairs and expositions, trade agreements, training and seminars and export market information dissemination and search tools.

SME's export promotion services will focus on the following:

Facilitating international market access and penetration of SME goods and services through their participation in contact promotion programmes, trade fairs and exhibitions, trade missions, buyer-seller meetings and conferences and group-marketing schemes for the SMEs.

Facilitating export marketing of SMEs through display of their products in Zimbabwe permanent missions and external trade offices.

Organising sub-contracting production/supply schemes; establishment of export production village Schemes, technical advisory services to facilitate product and market development as well as supply chain management.

Operating export training programmes that delivers short-term product development, market development and specialised trade development courses for export companies, trade facilitating agencies and businesses to upgrade their skill in export marketing.

Organising workshops, forums, conferences, and seminars for both facilitators of export services and the exporting companies.

Identifying products with export potential and adapt them for the export market.

Guiding local enterprises to prepare export marketing plans tailor made to their respective operations

  1. Facilitating participation of SMEs at international trade fairs and expositions;
  2. Undertaking trade missions;
  3. Undertaking external market intelligence;
  4. Undertake advocacy services for bodies involved in exports;
  5. Advocating for the review of policies and legislation impacting negatively on export facilitation;

Disseminating export market information

It is therefore better to be late than never. Zimbabwe must now set up its SMEs Export Promotion Agency.

***Gift Mugano is an International Trade Expert based in Port Elizabeth, SA. He is studying PhD Economics at Nelson Mandela Metropolitan University. He is a consultant and Chief Executive Officer of Africa Economic Development Strategies.

 

 
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