Local Enterprise Authority (LEA) has recently launched a five-year strategy, which is aimed at developing and nurturing a pool of sustainable and competitive Small Macro Enterprises (SMEs).
The 2019-2023 strategy seeks to contribute to the reduction of the import bill and help SMEs survive past the infancy stage, which is usually the first three to five years, thus create employment in turn.
Speaking during the launch recently, LEA chief executive officer, Racious Moatshe said the sector could help diversify the economy from minerals.
Moatshe said unlike the other strategies, the new one would address the challenges that small businesses face locally and address the possible ways of positioning the focus on the SMEs that have the potential. “We believe SMEs can be a solution to the economic challenges we are currently facing as a nation, which include unemployment especially amongst the youth, low production capacity, high import bill and undiversified economy,” he said. The CEO revealed that during their consultations, they discovered that stakeholders are losing confidence on the local SMEs.
He noted that it was becoming difficult for local producers to penetrate the local market.
“Botswana is a consuming nation and the time has come for us to start buying the local products,” Moatshe said.
“We need to have programmes that promote the procurement of local goods because local SME’s are producing quality products that can compete internationally.”
According to Moatshe, the current strategy will address all sectors in the SMEs bracket and will also transform LEA incubation model and have a number of specialised incubators.
Moatshe added that they have made collaborations with several government parastatals like Citizen Entrepreneurial Development Agency, the Ministry of Youth Empowerment, Sport and Culture Development, Botswana International University of Science and Technology and Gender Affairs Department to help nurture SMEs in every possible way. According to LEA’s 2017/2018 annual report, SMEs continue to struggle to access markets for their products.
This is on the back of a number of factors like low product and service quality, preference of imports by some markets, incapacity and inconsistency in production and absence of deliberate policy instruments or mechanisms to protect the local suppliers.
As at March 31, 2018, the Authority assisted 998 SMEs to develop business plans, 926 of which were for micro enterprises while 72 were small and medium enterprises.
For the past decades, high numbers of local SMEs have failed in their first phase of operation.
Those that survive usually continue to operate in conditions of uncertainty due to volatile market, intense competitive rivalry, lack of marketing skills and shortage of serviced land amongst others.