Monday, 17 February 2014

How SMEs could achieve competitive market edge


 At the Global Smart Partnership dialogue, one of the most significant highlights was an impassioned call by President Jakaya Kikwete on the role of governments and society to support Small and Medium Enterprises (SMEs).
At the dialogue, President Kikwete urged African leaders to invest in science education and training of indigenous masses that can ultimately assist in finding home-grown, practical solutions to challenges that confront the African continent.
He said societies that had anchored science and technology into development programmes had succeeded in finding solutions to their challenges, including fast tracking development in various areas.
“Invest more in our youth, this is their time, if we invest more in the youth, Africa will have a future in science and technology,” the President said. He said three years ago, his government had invested in incubators and so far they had succeeded in creating some products, giving an example of Maxi Malipo, which had already gone beyond the borders.
Similar thoughts have been held in reports by the Small Industries Development Organisation (SIDO), the United Nations Industrial Development Organisation (UNIDO), the Confederation of Tanzania Industries (CTI), the Tanzania Private Sector Foundation (TPSF), the World Bank and the Investment Climate Facility (IFC).
Similarly, in one of his writings, former secretary-general of the East African Community, Dr Juma Mwapachu, on how to forge an entrepreneurial spirit, he expounds more on a critical factor for broadening the base of SMEs and which catapults greater wealth and job creation. “In my view, such an entrepreneurship spirit would have to be built and cultivated through the education system, much in the same way that the school curriculum on citizenship has been able to engender a powerful culture of civic responsibility in some countries, Tanzania included, and I have in mind, in this case, during Mwalimu Julius Nyerere’s leadership,” he said.
That a successful promotion of SMEs must, therefore, proceed through an education system that deliberately cultivates an enterprise culture. But he quips that there are some challenges facing SMEs.
To him, a general perception in the financial sector that lending or provision of capital to SMEs is risky business due to a number of reasons: High mortality rates of SME businesses, poorly prepared business proposals, the lack of reliable collateral, suspect management capabilities and skills and obscure historical records of SME operations.
It would be necessary, in enhancing the role of SMEs in African economies such as Tanzania, to develop exclusive stock exchanges for SMEs. The East African Community (EAC) must give its SME opportunities to enable them to thrive in a bid to make them contribute more meaningfully to the region’s economic growth.
It is the same reason the Nation Media Group started the top 100 mid-sized companies’ survey, after arriving at the conclusion that SMEs were important drivers of the economy capable of pushing up development.
The top 100 mid-sized companies’ survey aims at identifying and recognising the fastest growing mid-sized companies and attracted over 200 companies compared to last year’s 120 participants. The initiative is the brainchild of Mwananchi Communications Ltd (MCL) through The Citizen and KPMG Tanzania.
The initiative – founded in 2011 – recognises and identifies Tanzania’s fastest growing mid-sized companies (quality growth); emerging industry leaders; prosperity creators (wealth and job creators) and the new business role models and mentors. Through the results of this survey, investors, financiers and policy makers are able to make better and informed decisions related to the growth of the economy. The noble idea is to be appreciated in the corporate sector and government circles for promoting and spurring growth of the sector of SMEs in the country.

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