Open economy unfair

SMEs Minister Sithembiso Nyoni

SMALL and Medium Enterprises and Co-operative Development Minister Sithembiso Nyoni has castigated the open economy policy for exposing SMEs to unfair competition.

Most products from SMEs in the country have been ignored by locals allegedly due to poor quality and workmanship. The products have also failed to appeal to other markets outside the country.

Addressing delegates at the official launch of David Chiweza’s book, “Out of the rabble”, Minister Nyoni said the open market policy has resulted in the failure of some SMEs because they do not yet have capacity to compete globally due to economic challenges bedeviling the economy.

“The ministry agrees with observation that our open economy policy has exposed our infant industries to a host of poisonous influences that have hampered the rapid development of the sector,” said Minister Nyoni.

“For example, introduction of superior technology in an environment where the local conditions are short of capital to adopt and respond to competition have resulted in a high business failure rate.

“This has left the SMEs exposed and vulnerable to global competition. Consequently, the ministry is working with other development partners to provide conducive environments for SMEs to compete globally,” she said.

In the last 10 years, often referred to as the country’s “lost decade”, Zimbabwe has failed to come up with reasonable economic policies resulting in the closure of most mainstream companies.

Close to 80 percent of formal jobs were lost following the company closures, giving birth to a multiplicity of small and individually owned entities as citizens sought to eke an honest living.

Although most SMEs are not registered and consequently not contributing anything to fiscus, Minister Nyoni intimated that they remain important because they provide a broad-based low capital investment opportunity for the development of people.

“Nomatter how much you can hate them or look down upon them, SMEs have helped to hold the social fabric of this country and that is why we do not have many beggars in the streets.

“Zimbabwe has almost four million small businesses and you can guess how many jobs they have created. Therefore, their promotion will facilitate their greater participation in mainstream economy,” said Minister Nyoni.

Bodies such as the National Aids Council (NAC) have called for the formalisation of the informal sector arguing that the move would boost revenue towards the Aids Levy, which is critical to the country’s battle against HIV/AIDS.