This week, Chief Negotiator at the Ministry of Investment, Trade and Industry (MITI), Phadza Butale revealed MITI would be slashed in two, giving birth to a new ministry dedicated to SMME development. According to Butale, the move, which he says has already been approved by cabinet, shows the government’s commitment to improve start-ups and medium businesses. It is hoped the creation of a new ministry focusing on Small, Medium and Micro Enterprises (SMMEs) will grow and unleash the potential of small businesses.
“The development of SMMEs is important as they are an engine of growth and will diversify the economy and lead Botswana to export-led growth,” stressed Butale, adding it will also lead to massive job creation.
Butale was addressing a Procurement and Enterprise Development Pitso organised by Barclays Bank Botswana, where he emphasised the government’s efforts through agencies like CEDA and LEA complement the bank’s efforts.
For her part, Barclays Bank Botswana Managing Director, Keabetswe Pheko-Moshagane noted that the bank had already committed to SMME development through the launch of the Enterprise and Supply Development (ESD) initiative in 2017. She explained the project is a multi-faceted initiative aimed at directly addressing the core issues facing SMMEs.
“It encompasses access to capital and markets as well as the bespoke business support and training,” said the Barclays MD, noting that these three aspects are important to the sustainable existence of any business, particularly in the SMME sector.
Although usually looked down upon, the SMME sector has through the years proven to be the driver of economic growth and employment creation across the world. Moshagane says research has shown that nearly 90% of registered businesses in Botswana are SMMEs, employing over 300, 000 people, both formally and informally. Through the ESD programme, Moshagane said the bank disbursed P80 million to local SMMEs last year alone, mainly in the mining sector.
She revealed that from January to June this year, a further P50 million was disbursed to SMMEs.
“Our intention is to continue funding SMMEs through this programme and engaging more corporates to open up their eco-systems to include local suppliers of our SMMEs,” added Moshagane.
According to Thatayaone Molefhi – Business Development Manager at Debswana – the import bill stands at P68 billion, which he said could be lower if local companies procured locally. He said another factor attributed to the collapse of local SMMEs is their failure to support each other, saying local companies would rather engage a multinational company instead.