Elijah Mukubonda
The Ministry of Industrialisation and Trade (MIT) launched the MSME policy that was approved by Cabinet and parliament in 2016. The major objectives of the policy are to foster the development of MSMEs by adopting international good practices for modernisation and upgrading of technology. The ministry also launched the 10 growth strategies after a public private dialogue process with relevant stakeholders approved the strategies to enhance value addition, expand industrial output and increasing growth rates.
Growth strategies comprise cosmetics, game meat products, gemstone and jewellery products, handicrafts, leather and leather products, metal fabrication, seafood, Swakara and wool products, taxidermy products and wood charcoal.
The new national policy on Micro, Small and Medium Enterprises (MSME), is a framework to create an enabling regulatory environment in which the public and private sectors can develop and promote small enterprises. The policy overlaps the 1997 SME Policy and Programme on Small Business Development aimed at addressing challenges facing SMEs in the areas of finance, marketing, technology, infrastructure, skills development and institutional support as the country marches toward Vision 2030.
A review was deemed necessary in order to incorporate the newest trends in MSME development and to align the document with national objectives. The ministry strongly believed that for the MSME policy to yield the desired results, it has to be relevant, coherent, and fit for purpose. Consequently, the process of policy preparation emphasised stakeholder, public, and MSME engagement through workshops hosted in all regions countrywide to gather practical inputs that ensured the effective promotion and strengthening of programmes supporting MSMEs throughout the country.
The National Policy on Micro, Small and Medium Enterprises was aligned to the national objectives as expressed in Vision 2030, the National Development Plans as well as Namibia Industrial Policy of 2012 and its recently adopted implementation framework and strategy known as the ‘Growth at Home’ as well as the Namibia Financial Sector Strategy 2011-2021. The policy objectives are to foster the development of MSMEs by adopting international good practices for modernisation and upgrading of technology, to promote women entrepreneurship and ensure gender-balanced economic development as well as to reduce regional and partial imbalances with regard to industrial development with the Namibian economy by facilitating the establishment of MSMEs in rural settings and in previous underserved urban area and to make sure both are mainstreamed into the economy.
MSMEs support programmes have been put in place to address the challenges, there do still exist challenges in implementing business ideas due to finance, access to land, and lack of entrepreneurial skills. MSMEs financing is unattractive to financial institutions since such small businesses are perceived to represent high-risk investments that do not yield commensurate returns. Even if SMEs offer promising, commercially viable investment opportunities, MSMEs are often not backed by adequate collateral. As a result, only a few businesses use financial services while the majority of MSMEs businesspeople rely on their own financial resources and contribution from family members and friends. While on the issue of access to the market, the majority of Namibian Economic Policy Research Unity including Small Business Impact Assessment shows that a low percentage of SMEs export their goods or services, while a moderate percentage sell their goods or services within the administrative region where they operate. Due to the limited size of the domestic market in Namibia, MSMEs need to export their products or services in order to grow. The limited use of financial services is also attributed to poor financial literacy and non-bankable business plans.
*Elijah Mukubonda is the Chief Information Officer in the Ministry of Industrialisation and Trade