On 27 June, the world observed the World Micro, Small and Medium Enterprises (MSMEs) Day.
The International Council for Small Business (ICSB) estimate that formal and informal micro-, small and medium-sized enterprises (MSMEs) make up over 90% of all firms and account, on average, for 70% of total employment and 50% of GDP.
The UN General Assembly, therefore, declared in 2017 that 27 June is Micro-, Small and Medium-sized Enterprises Day to raise public awareness of their contribution to sustainable development and the global economy.
The Ministry of Industrialisation and Trade (MIT) viewed the adoption of such a resolution timely, as it had just also received approval in December 2016 for the adoption of our National MSME Policy.
In Namibia, the contribution of the sector in terms of gross domestic product (GDP) and employment is estimated at 12% and 20%, respectively, despite the country’s triple challenge of unemployment, inequality and poverty.
These outcomes indicate that Namibia needs to shore up and covet the MSME sector considerably to optimise both economic and developmental returns.
Consequently, the MIT strives to improve the business environment and conditions for businesses, including MSMEs, through initiatives covering policy, legislative, regulatory, institutional and programme specific ones.
This article will narrate these interventions below.
Policy support measures
In terms of policy measures, the ministry has introduced the 2016 MSME National Policy, which ensured appropriate definitions of the sector as well as providing guidance on how the country should support our MSMEs.
Secondly, the ministry is finalising an Informal Economy and Entrepreneurship National Policy to cover the unformalised sections of our entrepreneurs as well as our youthful start-ups and general entrepreneurship.
This policy is also included in the Harambee Prosperity Plan II and is to be accompanied by an attendant Act of Parliament later on, which provides ample space for ensuring the mainstreaming of incentives and business infrastructure for our MSMEs both formal and informal.
In terms of other policy support measures, the ministry is at the final stages of re-tabling the Namibian Investment Promotion Act (NIPA), of which a key provision is sector reservation to ensure certain sectors are reserved for our MSMEs. The NIPA will, thus, be accompanied by appropriate regulations thereto.
Also from a policy perspective, the ministry supported the Ministry of Finance directive on local procurement, which was released in December 2020, listing various products and services that must be supported through public procurement.
Institutional support measures
The StartUp Hub is key to ensure we promote and develop our Namibian start-ups and we now have over 90 start-ups being trained at the hub.
The recently launched digital centre is within the StartUp Hub and aims to ensure the development of a digital economy and start-ups to help in our structural transformation and industrialisation agenda.
This is a collaboration with the German government through our much-vaunted bilateral partnership. The StartUp Centre also supported the Future Female Entrepreneurs Programme, which provided specific training and mentoring to women entrepreneurs.
The SDG Impact Facility is a collaboration with UNDP Namibia and Standard Bank Namibia as well as the Environmental Investment Fund. The aim is to support and fund sustainable social enterprises as access to finance continues to hamper our efforts at business development.
So far, we have funded 35 enterprises under this facility and aim to grow the fund into an endowment fund with other interested partners.
The first window covered agriculture and nutraceuticals (cosmetics and artisans), who received funding to the tune of N$2.5 million.
The second window (tourism, hospitality and manufacturing) closed in April 2021 and will see another 32 entrepreneurs, mostly women and youth receiving grants to the tune of N$3.2 million.
The third window will be launched in July 2021 and focuses on Renewable Energy and Information Technology.
EMPRETEC Namibia is a collaboration with UNDP Namibia and Ghana EMPRETEC, with the explicit aim to avert the very low entrepreneurial outcomes of our country. The aim is to train our MSMEs and larger enterprises into appropriate entrepreneurial behaviour to ensure they can create sustainable business going forward. So far, we have also 95 entrepreneurs, of which 40 were vulnerable categories (people living with disabilities, poverty-stricken, etc.).
Under EMPRETEC, we have also collaborated with the Ministry of Higher Education to train more than 20 youth entrepreneurs.
The next phase is to ensure the training of trainers as well as certified business advisors and mentors.
Finally, from an institutional perspective, to improve our operational efficiencies, MIT has launched the DIDESS Kiosk in all 14 regions to minimise the bottleneck challenges MSMEs used to experience to register their businesses.
Programme specific interventions
In terms of programme specific interventions, the ministry, along with various national, regional and international partners, carries out a few programmes, such as (list is not exhaustive):
- The Industrial Upgrading and Modernisation Programme (IUMP) grant scheme, which aims to improve production and supply capacity, efficiency, and competitiveness of Namibian-owned manufacturing firms. The ministry recently, through the support of SADC, provided grants to 40 entrepreneurs worth over N$7 million.
- The Equipment Aid Scheme will be revived this year and shall continue ensuring support at the new business formation scene and start-ups.
- Charcoal and Biomass Trainings for MSMEs, in collaboration with the Namibia Charcoal Association. The series of training on sustainable charcoal production, aimed at enhancing human capacity development by empowering MSMEs with new skills and technology, and equipment utilisation through practical sessions on sustainable charcoal production. So far, 40 MSMEs has received training in the charcoal value chain during the 2020-2021 period. Our aim is to train at least 100 MSMEs by end of 2022.
Gemstone and jewellery training for MSMEs and youth are carried out yearly at the Karibib Gemstone Centre of the ministry. The ministry has so far trained over 200 beneficiaries since 2010, whereby at least 60 found employment in the diamond polishing and cutting sector. The ministry is currently training another 25 beneficiaries and hopes to train five of them as trainers next year.
Game meat processing for MSMEs and youth, the MIT has in 2019 trained at least 10 MSMEs and is planning to train another 20 in 2022.
The Pitching for Business Recovery Scheme, which lends support to mitigate the negative impacts of Covid-19 on the Namibian economy in cooperation with MIT and the Ministry of Finance, was targeting its support at the Namibian private sector and specifically SMEs, to cushion the economic impact on the business losses by a ‘Pitching for Recovery (P4R)’ grant scheme. A total of 124 businesses, of which 72 are females, received this grant in 2020.
A second phase of the grant scheme, titled Pitching for Resilience, is currently underway.
A key programme we have introduced is covering both the Barcode Centre for Namibia as well as the ‘Buy Namibia’ campaign. These are meant to ensure that all our local products and services are accommodated on retailers’ shelves here. Currently, these efforts are voluntary and we work with key stakeholders to ensure successful outcomes thereof.
A final programme is the School Uniform Import Replacement Programme. The ministry is working with various stakeholders and leveraging on our garment centres that we built to develop the key intervention to ensure our MSMEs can supply school uniforms in all the regions of our country. We expect to launch this vital programme in September 2021.
The MIT shall continue to promote enterprise development through the above-mentioned interventions whilst giving an ear to any new approach that may present itself. Nationally, on the horizon, there is also quite a portent of good things to come such as a framework for distressed companies (through the recently appointed Business Rescue Taskforce), an MSME National Fund as per the HHP II as well as reforms to credit agreements that could pave the way for innovative collateral options.
All these interventions, along with the specific above-mentioned MIT ones, should continue to validate our efforts as we observe the World MSME Day.
Dr Michael Humavindu is the deputy executive director in the Ministry of Industrialisation and Trade.