Export Opportunities for SMEs in Developing Countries: Global Experiences
in the business license office
• Legal notice No 78/2003: Regulation regarding Import Permits and declared goods
• Any person desiring to import commercial goods shall first obtain an import permit from the ministry of Trade and Industry
• An import permit shall be required for every consignment.
• Legal notice published in Gazette of Eritrean Law on 6/5/2006
• For detailed analysis importers will not be allowed permit unless they bring supporting letter from the related ministry.)
Findings
➢ Poor mechanism to control industrial chemical management system.
➢ Limited Legal instruments pertaining to industrial chemicals management.
➢ Poor of systematic organization and accessibility to record of import and usage.
➢ Absence of dumping site for the obsolete and expiry industrial chemicals.
➢ No standards concerning the management of industrial chemicals.
➢ No significant change in terms of technological advancement.
➢ Inadequate supply of appropriate PPEs. In addition, the employees do not use them properly in the instances where there are PPEs.
➢ The institutional setup which oversees the activities of chemical management in the sector is very poor.
➢ Inability to implement all the projects proposed in the 1995 NEMP-E Plan.
o Preparation of legislation and manuals
o Increase Eritrea’s capacity in chemicals management
Recommendations
Promulgation of laws should be strongly enforced for the sound management of industrial chemicals during their lifecycle.
Awareness raising campaign should be conducted for the implementation of the proper management practices.
Priority areas, potential measures and strategies that could be part of the upcoming plan
Priority area
• Control of chemical imports
93
Export Opportunities for SMEs in Developing Countries: Global Experiences
• Disposal of obsolete and expired industrial chemicals, and
• Management of hazardous chemical wastes.
Potential measures
• Undertake inventory of expired chemicals and stockpiles.
• Carry out capacity building programs for the management of chemicals.
• Conduct research and studies on the safe disposal of expired chemicals.
• Promote awareness raising programs on the safe use, storage, and disposal of chemicals.
• Enact national legislation on industrial chemicals and hazardous wastes.
Strategies
• Establish database for registration of import of chemicals.
• Formulation of comprehensive management of industrial chemicals and hazardous wastes
References
1. MTI data, 2022
2. Tannery Industry Waste Water Draft Report, 2018
3. Industrial development road map of Eritrea 2020
94
Export Opportunities for SMEs in Developing Countries: Global Experiences
11
Abstract
EXPORT BARRIERS FOR SMALL AND MEDIUM ENTERPRISES IN BANGLADESH
Md. Delwar Hossain
Export Opportunities for SME in developing countries Bangladesh. [email protected]
Export is very important for developing countries. Small and medium sized companies in the developing countries faces several barriers when exporting their products in other countries. Bangladesh is a small country in the South East Asia. The major barriers faced by Bangladesh’s SME are lack of finance for exporting and excessive transportation cost. This sector also lacks proper market research and advertising. The present paper focused on various barriers faced by SME in exporting their products to different countries.
Introduction
Bangladesh is a small country in the South East Asia. The official name of the country is the People Republic of Bangladesh. The country is situated between Myanmar and India. The country was a part of India until 1947. After that Bangladesh was known as East Pakistan. The country got independence from Pakistan in 1971 and renamed Bangladesh. The total land area of the country is 147570 square kilometers. Bangladesh has a diverse and multicultural economy. The major exports goods are garments, footwear, leather products, jute, vegetables and shrimp.etc.
The European Union is the biggest export destination of Bangladeshi product. In the year 2022 Bangladesh exported 60% of the total export in the European Union. The major exported item from Bangladesh to the European market is garments, frozen food, jute and tea. Bangladesh gets the facilities of quota and duty free access to the European Market. Quality and Standard are the binding requirements for export to the European Market.
Ninety three percents of all units in Bangladesh belong to SME category. The garments and shrimp industry of Bangladesh play very important role for the economic development of the country. This industries contribute to the economy with a greater extent.
The shrimp industry of Bangladesh earns a significant amount of foreign currency by exporting shrimp to the European Market. However exporting to the European Union needs standards and regulation set by the Union from processing to the exporting level. Moreover, the whole process need to monitor very carefully and series of problems could arise during the export process. In addition, the problems faced by the Bangladeshi
95
Export Opportunities for SMEs in Developing Countries: Global Experiences
shrimp exporting companies in the European Union which can be attributed to a series of entry barriers.
Objectives
1. To understand the barriers faced by SMEs in exports.
2. To assist in quality improvement and promoting export in small industries.
3. To eliminate regional difference by means of calculated and purposeful policy.
Barriers of SMEs
• According to the European Commission, Internationalization and international entrepreneurship among small and medium sized enterprises (SME,s) has remained a topic of considerable contemporary relevance, principally owing to the observed growth effect of cross border venturing and the demonstrated capacity of SMEs to drive economic development at national , regional and global levels (EU 2007).
• The global competition imposes extra burden to SMEs to take the challenge of international barriers. The advancement in information communication technology and macro-economic situation in the global trade creates barriers for SMEs to compete in the international market.
• Trade and investment are very important elements for the economic development especially for the developing countries. The developing nation in the world face problems in export competitiveness due to poor product quality and lack of suitable export promotion trategy. It is important for developing countries to improve their production quality, capacity and supply chain process to add value to their products in the international market (UNCTAD-2004).
• Barriers in trade works as a tool to make foreign goods and services less competitive than goods and services produces in the domestic market. Trade barriers could be technical, procedural, legal and illegal. A series of trade barriers could occurs related to product quality, consumer protection, custom duties, veterinary and photosanitary rules, restriction on investment, unfair uses of government aid and subsidies create barriers to international business (Minstry of Foreign and Affairs of Denmark-2012)
• The most common trade barriers in international business are: barriers with patent trade mark, unfair competitiveness , excessive and expensive certification requirements, barriers imposed on export and foreign investment, unfair competition and excessive imports and unfair practices of business law.
• International business takes place when an organization exports goods and services tothecustomersinadiffererentcountry.Alargenumberofbarriersin tradecome from the high tariffs of the imported goods. The reason for tariff is to defend local business from overseas competition .
96
Export Opportunities for SMEs in Developing Countries: Global Experiences
• The developed countries in the world established a General Agreement on Tariff and Trade (GATT) to removing barriers in international trade. The GATT has 150 members state in the world and all the members take part in negotiation to remove barriers in international boundaries. The most successful negotiation of GATT was in December 1993 and known as the Uruguay Round. The Uruguay round was successful to establish the World Trade Organization (WTO) to reduce the barriers in international business (Hill 2009, 11).
However, globalization has a great impact on international business. The number of SMEs operating in international market is growing due to the increased competition of Globalization. The firm need no manage the organizational skills and resources during their entity in to a foreign market. SMEs face series of problems during their entry in to a foreing market. The barriers of international character stem mainly from the complicated and different official and administrative scheme of the business atmosphere between sales, as well as the tariff and non tariff barriers (OECD 2009, 89).
Barriers in Bangladesh:
• Barriers related to information: the problems in recognizing, choosing and making contact with foreign buyers and lack of information about international market create barriers for SMEs to enter foreign market (OECD). Around 13% SMEs in the European Union claim lack of information about the foreing market as the main barriers of export (European Union, 2012). The follow of information throughout the organization play a vital role to increase the export performance of SMEs.
• The exporting organization needs high flow of information for the development of the export performance of the organization. The growth of the organization deepened on amount of information generated from outside and proper distribution of this information to the relavent department. Lack of proper information about the international market creates barrier for SME to export.
• Barriers related to human resources management: The skill human is the most important tool for the growth and internationalization of companies around the globe. Skill human resources helps organization to gain competitive advantage for innovation and new product development. The most important issue for the organization in the 21th century is to create the best fit working environment to get the maximum output of the skilled work forece.
• The location of the organization affects the export performance of the organization because of the difficulty in drawing attention of skilled workforce. Skilled and experienced workers are very important for the development of the export related performance of the organization.
• The attitude and perceptions of the managers are important for the export of the organization. Lack in manager’s educational level, foreign language proficiency
97
Export Opportunities for SMEs in Developing Countries: Global Experiences
and experience about foreign culture create barriers for SMEs during their operation in the international market.
Barrier to Finance:
• The initial funding for export marketing is very important. The working capital fund requires to conduct and development, frequent foreign trips and and to develop marketing strategies for international business. (OECD2012). The finance related export support has effect on the export performance of SMES. The performance of SMEs depends on the level of receiving different finance and guarantee related export assistance. The barriers to finance considered are considered as the third largest barriers among SMEs in the European Union. Al most 9% of the European SMEs faced financial barriers during exporting their product in a foreing country. (European Commission 2012). The lack of finance as a working capital creates barrier for SMEs to operate their international business and exporting activities.
• Barriers related to product and price: The lack of mass production capacity of small organization considered as the major impediments for exporting. A large number of organizations withdraw from exporting because the inability of their production capacity to meet the demand of export business.
• It is very important for organization to adapt with new environment by developing new products to face the internal and external challenges of the international market. SMEs failure to choose the right product and new product development will suffer decrease in Barriers related to product and price: The lack of mass production capacity of small organization considered as the major impediments for exporting.
• A large number of organizations withdraw from exporting because the inability of their production capacity to meet the demand of export business. It is very important for organization to adapt with new environment by developing new products to face the internal and external challenges of the international market. SMEs failure to choose the right product and new product development will suffer decrease in the export performance and profitability in the international market. The ability to fast product development provides support to develop a successful export marketing strategies.
• Besides that, the product design and packaging play very important role to attract customers during the export marketing process. It is difficult for SMEs to grow in the international market if they are not able to package and design their product according to the need of the foreign markets. The quality of products plays an important role for the success of the international business. Since globalization has open the doors to consumers to buy product from different countries with a very competitive price. It is very important for SMEs to maintain the quality and standard of product to compete in the global market place. Products with
98
Export Opportunities for SMEs in Developing Countries: Global Experiences
difficulties and poo qualities face problem to compete in the international market.
• The pricing of goods is important tool of pricing strategy for exporting in the foreign market. The pricing of exporting should be done by a systematic process to compete in the global business environment. SMEs face competition and barriers in terms of pricing during their export in the foreign markets.
• Delivery, logistics and advertising barriers: SMEs operating in the international market encounter problems in finding proper distribution channel. The lack of marketing and promotional activities in the overseas market creates export related problems for SMEs. A large number of SMEs in the developing countries do not succeed to establish a proper marketing channel in the international market. Furthermore, the structure of the foreign supply chain management play very important role for SMEs to expand in the foreign markets. The value chain related problems has strong effect to the Export performance of the SMEs .
• According to the (Financial Express 2007) “Poor marketing campaign and promotion is another important factor that acts as a key constraint to healthy growth of SMEs. Most of the enterprises lack in proper marketing strategy and have poor promotional strategy of their products. Lack of innovation and ideas is responsible for this.” In addition to, the cost of insuring products for international market is very high and it is consider as extra burden for SMEs during internationalization process. (OECD 2012)
• The export insurance offer protection against commercial risk related with export. SMEs in the developing countries face problems in insuring products and claiming coverage while a loss or accident occurs during export process. (Tesfom & Lutz 2008, 372) Inappropriate and unclear advertising message could create problems for SMEs in the foreign market. Moreover, different foreign regulations and customer buying behaviour create challenging tasks for SMEs to take part in marketing, promotion and advertising activities. (OECD 2012)
Barriers related to product and price:
• The lack of mass production capacity of small organization considered as the major impediments for exporting. A large number of organizations withdraw from exporting because the inability of their production capacity to meet the demand of export business. It is very important for organization to adapt with new environment by developing new products to face the internal and external challenges of the international market. SMEs failure to choose the right product and new product development will suffer decrease in Barriers related to product and price: The lack of mass production capacity of small organization considered as the major impediments for exporting. A large number of organizations withdraw from exporting because the inability of their production capacity to meet the demand of export business. It is very important for organization to adapt with new environment by developing new products to face the internal and external
99
Export Opportunities for SMEs in Developing Countries: Global Experiences
challenges of the international market. SMEs failure to choose the right product and new product development will suffer decrease in the export performance and profitability in the international market. The ability to fast product development provides support to develop a successful export marketing strategies.
• The delay in payment from overseas market is a major problem considered by SMEs operating in the foreign market. The geographical distance and restriction of the central bank in the foreign country could create problem in collection of payments from overseas market. (OECD, 2012)
• SMEs encounter problem in solving disputes and other legal problem related with exporting activities. It is always burdensome for SMEs to solve problems related to legal issues of exporting. The unfamiliar foreign law, high cost to access foreign legal system and required time to solve the legal issues are considered as extra burden for the SMEs (OECD, 2012)
• Governmental Barriers: SMEs operating in the international market face problem in the home country as well as in the host country due to different procedure and regulations set by the both governments. The lack of support from home government and organization is a major barrier for the growth of the SMEs. The different rules and regulations set by the home government and restriction on exporting product related to national or international interest slow down the performance of the export related SMEs. (OECD, 2012)
• Restriction on foreign ownership and extra tax rate has strong effect the performance of the SMEs operating in overseas market. Moreover, the problem related with international travel restrictions, high tax rate for foreign owned companies, financial discrimination policies, and unfavourable law and bureaucracy in the host government are major barriers faced by the SMEs in the international market. (OECD, 2012) The limitations and lack of home government support and unfavorable export policy hindered the growth of SMEs in the international market (Karelakis et al. 2008, 19).
• Barriers related with business environment: SMEs operating in the international market face barriers within the business environment of the host country. The barriers related to business environment are mostly associated with the economical, political, legal, and socio-cultural environment of the host country. The overall economic condition of the host country is important for the growth of the SMEs. The uncertainty of the overseas markets caused by different micro- economic indicator has strong effect for the growth of SMEs. Moreover, the foreign exchange rate and unfamiliar business practices create obstacles for the growth of SMEs.
Language and cultural barriers:
• The barriers related with social and cultural differences have great impact on the export performance of the SMEs. The differences in values, believes, norms,
100
Export Opportunities for SMEs in Developing Countries: Global Experiences
attitudes ethnicity, religion and language have significant effect on the exporting activities of the SMEs. (OECD 2012)
• The importance of culture is very important in doing business globally. The cultural change due to globalization is creating new value towards international business. The practice of intercultural management is highly required by the SMEs operating in the international market. (Kanungo, 2006, 28) The cultural differences have great impact on new product development in the international environment. It is highly recommended to monitor the cultural differences carefully while planning marketing activities in the overseas market. (Yeniyurt & Townsend 2003, 393)
• Tariff and Non-tariff Barriers: The tariff and non-tariff barriers are implemented by the government in the foreign countries to control exporting by overseas companies. The quotas and embargoes are imposed by the host country of exporting to control the amount and quantity of goods from the country of exporting. SMEs operating in the overseas market encounter barriers related to unreasonable quotas and embargoes. (OECD, 2012)
• Additionally, SMEs operating in the international market face problem in maintaining health and safety standard. The host country of exporting might requires different sanitary and phytosanitary certification to meet the safety standard of the country. The maintaining maintain of such kind of standards is cost effective and impose extra burden on SMEs operating in the international market. (OECD 2012)
• The importance of food safety management is very high for organization to get access to foreign market. The issue of food safety management is a major concern among the customers in the international export market. SMEs with lack of proper food safety management face barriers to export their products in the international markets. (Arapanutud et al. 2009, 373)
Conclusions
Small and Medium Enterprises play a significant role in driving economic growth and generating jobs. In Bangladesh, the sector is changing the face of the economy. SMEs are playing a vital role in the economy’s accelerated industrialization and economic growth, employment generation and reducing poverty. Government should initiates various schemes and policies to overcome the barriers in access to Finance, marketing and other promotional ways inorder to enhace the export facilities in Bangladesh.
101
Export Opportunities for SMEs in Developing Countries: Global Experiences
References
1. OECD Reports 2012
2. Albaum, G. S., Evangalista, F., & Medina, N. (1998). Role of response behavior theory insurvey research: A cross-national study. Journal of Business Research, 42, 115–125
3. Alden, D., Steenkamp, J.-B. and Batra, R. (1999), “Brand positioning through advertising in Asia,North America, and Europe: the role of the global consumer culture”, Journal of Marketing,Vol. 63 No. 1, pp. 75-88
102
Export Opportunities for SMEs in Developing Countries: Global Experiences
PROMOTING MSME COMPETIVENESS IN ZAMBIA: OPPORTUNITIES AND
CHALLENGES
Ms. Margaret Phiri
12
Abstract
Small and medium-sized businesses (SMEs) play a significant role in global development. Promoting a nation's SME sector is essential for generating significant income and employment, which is necessary for ensuring sustainable growth.
The process of globalization has intensified domestic and global competitiveness, characterized by fundamental changes in the organization of global production, rapid advances in information and communication technologies (ICTs), and the emergence of multilateral agreements, is significantly changing the international environment. New opportunities have opened up but at the same time new problems and threats have raised new challenges for policy makers in developing countries.
Zambia therefore, should focus in improving the competitiveness of its domestic production sector by stimulating the development of SMEs and identifying ways and means for domestic SMEs to meet international standards which is vital to enable them become competitive on regional and global markets.
This article focuses on investigating the current situation of a finely adjusted mixture of macro- and micro-policies, public-private partnerships, and market functioning, in order to establish a dynamic competitive SME sector in Zambia. As a coordinated and concerted effort is needed to increase production capacities, for domestic, regional and or global competitiveness.
Introduction
Zambia being a land-linked country with eight (8) neighbouring countries namely Tanzania, Democratic Republic of Congo, Angola, Namibia, Malawi, Zimbabwe, Mozambique and Botswana positions the country strategically at the intersection of the Common Market for Eastern and Southern Africa and the Southern African Development Community. However, in spite of Zambia’s potential to be haven for cargo logistics and regional food basket through its abundant water peripherals and over 60% arable land.
Vice President Commerce and Trade Northwestern Chamber of Commerce Trade and Industry, Solwezi, Zambia [email protected]
103
Export Opportunities for SMEs in Developing Countries: Global Experiences
The country has continued to heavy depend on its mining sector which contributes to over 80% of the countries G.D.P.
Zambia recognises the need to diversify her economy and reduce over-dependency on mining exports and promote the production of non- traditional export products through the creation of Micro, Small and Medium Enterprises. The contribution of MSMEs to economic growth and sustainable development is now widely acknowledged as the cut
across all sectors of Zambia’s economy and provide one of the most prolific sources
Medium Enterprises (MSMEs) is viewed as one of the sustainable ways of reducing the
of employment and wealth creation and are a breeding ground for industries. The
levels of poverty and improving the quality of life of households through wealth and job
development of Micro, Small, and Medium Enterprises (MSMEs) is viewed as one of the
creation (MSME policy 2008).
sustainable ways of reducing the levels of poverty and improving the quality of life of
MhoSuMseEhsolrdesptrhersoeungt h9w7%ealothf anlld bjoubsicnresasteiosnin(MthSeMcEoupnotlricyy,120708%). of gross domestic product
(GDP) and 88% of employment.2 SMEs also fill a key role in society, as they tend to employ
MSMEs represent 97% of all businesses in the country,1 70% of gross domestic product
a large share of the most vulnerable segments of the workforce.3 Raising the competitiveness
(GDP) and 88% of employment.2 SMEs also fill a key role in society, as they tend to
of these enterprises would help reduce the youth unemployment rate and increase the number
employ a large share of the most vulnerable segments of the workforce.3 Raising the
of women in employment. This would also contribute to progress towards achieving the
competitiveness of these enterprises would help reduce the youth unemployment rate and
United Nations Sustainable Development Goals of reducing social exclusion and enhancing
increase the number of women in employment. This would also contribute to progress
productive capacities.
towards achieving the United Nations Sustainable Development Goals of reducing social Feixgculrues1io:nSManEdsecnohnatnrciibnugtipornotdoucthtieveEcoapnaocmityies.
Figure1: SMEs contribution to the Economy
Status of MSMEs in Zambia
Status of MSMEs in Zambia
1. The Ministry of Small and Medium Enterprises Development was founded by the
1. The Ministry of Small and Medium Enterprises Development was founded by the
Zambian government in 2021 with the goal of fostering the expansion of SMEs
Zambian government in 2021 with the goal of fostering the expansion of SMEs and
and cooperatives to generate wealth and jobs. MSMEs are thought to strengthen
cooperatives to generate wealth and jobs. MSMEs are thought to strengthen the
the manufacturing industry, promote competitiveness, assist in attaining a more
manufacturing industry, promote competitiveness, assist in attaining a more equitable
equitable distribution of the positive effects of economic growth, and assist in
distribution of the positive effects of economic growth, and assist in resolving various irsesuoelvsirneglavteadriotousunisesquueaslrienlactoemdetoduisnteriqbuatlioinc.ome distribution.
2. MSMEs accomplish this through creating more jobs with less capital outlay, serving
2. MSMEs accomplish this through creating more jobs with less capital outlay,
as a "seedbed" for the emergence of entrepreneurial potential, and providing low-cost
serving as a "seedbed" for the emergence of entrepreneurial potential, and
consumer goods and services to lower income groups. In times of economic recession,
providing low-cost consumer goods and services to lower income groups. In times
MSME also serve as a cushion for the country. However, in Zambia the capacity to
of economic recession, MSME also serve as a cushion for the country. However,
grow and to export still mains very limited.
in Zambia the capacity to grow and to export still mains very limited.
3. The topology of Zambian MSMEs has changed over time thereby creating the need
3. fTohre rteodpeofliongityioonf ZofamthbeiandiMffSerMenEts chatsegcohrainegsedofoveenrtetrimpreisethserienbythcereasteicntgort.heProper
cnleaesdsifoicrarteiodnefinoiftioentoefrpthriesedsiffiesreant pcareteregqouriessiteof feonrterspurcicsessifnutlhetasregcettoinr.gProfpesrupport
programmes and incentives provision. In this regard, MSMEs in Zambia shall be
defined based on the following business variables: Total fixed Investments excluding land and buildings; Sales Turnover; Number of employees and Legal status. Below is the table showing the classification by definition of MSMEs:
104
Table 1: Classification of Enterprises
Export Opportunities for SMEs in Developing Countries: Global Experiences
classification of enterprises is a prerequisite for successful targeting of support programmes and incentives provision. In this regard, MSMEs in Zambia shall be defined based on the following business variables: Total fixed Investments excluding land and buildings; Sales Turnover; Number of employees and Legal status. Below is the table showing the classification by definition of MSMEs:
Table 1: Classification of Enterprises
Categories
Total fixed investments
Sales turnover
No. of employees
Legal status
Micro
80, 000
150,000
Up to 10
Registered by Registrar of companies
Small
• Processing & Manufacturing – 80,000 to 200,000
• Trade and Services up to 150,000
151,000 – 200,000
10-50
Registered by Registrar of companies
Medium
• Processing & Manufacturing – 201,000 to 500,000
• Trade and Services up to 151,000 to 300,000
300,000 – 800,000
51 -100
Registered by Registrar of companies
Informal
Up to 50,000
Use Turnover tax
Less than 10
Not registered by Registrar of companies
• MSMEs in Zambia are have the advantage of various investments and growth opportunities both locally and within the region. The opportunities cut across key sectors of the economy which includes, abundant natural resources, agriculture, manufacturing and tourism. Indeed, Zambia offers appealing opportunities in crop production, fisheries and livestock, agro-processing, light manufacturing, tourism and enhanced service delivery. Further, there are export opportunities in the SADC and the African Continental Free Trade Agreement further broadens the opportunities for investors by lifting restrictions on foreign investment not forgetting the opportunities world over (Ministry of Commerce and Trade).
• The country’s abundant natural resources makes Zambia among the top producers of cobalt and emeralds in the world, and is the second largest copper producer in Africa.
105
Export Opportunities for SMEs in Developing Countries: Global Experiences
• Aware of the risks linked to overreliance on copper, the Government of Zambia has made consistent efforts to diversify the economy and attract investment into the.
• Zambia one of the best-performing economies in sub-Saharan Africa.
• Furthermore, SMEs can contribute to the preservation and sustainable management of natural resources. By adopting sustainable production processes, these enterprises can directly help achieve the Sustainable Development Goals on biodiversity and protection of wildlife, forestry and water that affect climate change.
• A wellspring for economic diversification Spread across all economic sectors, SMEs have the potential to help the Zambian economy diversify. ‘If Zambia has to treble or to even quadruple in its gross domestic product within the next 10 years, small businesses should have a central role in growing the economy.’ Chibamba Kanyama, Zambian Economist Small firms in the manufacturing sector are involved in various activities, from wood and textile production to light engineering and metal fabrication.
• Service sector SMEs operate mainly in building and construction, restaurants, cleaning and personal care services, transport, telecommunications, financial services and business centres.
• Businesses in the trading sector focus on agricultural inputs and produce, industrial and consumable products, and printing. Only a few SMEs operate in small-scale mining and quarrying.
• Strengthening the competitiveness of these firms would give them more opportunities to add value and to participate in regional and global production networks. Acknowledging the positive link between SME growth and job creation, the Government of Zambia has implemented several policy and regulatory measures to promote the growth and development of smaller companies.
• Complementing government efforts, the Zambia Development Agency has developed strategies to make it easier for SMEs to obtain finance, supply to chain stores, access government contracts and export.
The development of the MSME sector is critical to the achievement of broader national development goals outlined in the Fifth National Development Plan (FNDP) and in the Vision 2030. These include:-
• To reduce unemployment levels
• To increase participation of citizens in economic development
• To create avenues for equitable wealth distribution
• To increase utilisation and value addition of local raw material
106
• To increase utilisation and value addition of local raw material
Export Opportunities for SMEs in Developing Countries: Global Experiences
RECOMMENDATIONS
RECOMMENDATIONS
i) Establish within the Business Incubation Centres, Technology Innovation Centres
i) Establish within the Business Incubation Centres, Technology Innovation Centres (T(ITCIsC)s)offoefrfienrgingcocmomomnonfacfailciitlyi,ty,tectehcnhonlogloygyupugprgardaidnignganadndReRsesaeracrhchanadnd DeDvevloeplompemnetnrterlaetleadtedsesrevrivciecsestotoMMSSMMEEsescetcotor.r.
ii) Build the capacity of existing technology Service Providers (e.g TDAU and
ii) Build the capacity of existing technology Service Providers (e.g TDAU and
National Institute for Industrial and Scientific Research) to effectively deliver
National Institute for Industrial and Scientific Research) to effectively deliver
support to MSME.
support to MSME.
iii) Enter into bilateral and multilateral agreements with international organisations involved in technology transfer and upgrading in order to improve access by MSMEs.
iv) In collaboration with the Ministry of Science, Technology, and Vocational Training, National Technology Business Centre (NTBC), the University of Zambia Technology Development and Advisory Unit, and the National Institute for Scientific and Industrial Research, develop programmes that assist MSMEs with equipment, processes, and product development.
v) Develop and implement value chain analysis and development programmes for specific sub-sectors. e.g. Food Processing sector.
vi) Facilitate training of MSMEs in marketing skills and export marketing procedures and requirements, particularly in association with Z.I.M
107
Export Opportunities for SMEs in Developing Countries: Global Experiences
vii) Initiate discussions and sign trade agreements with neighbouring countries (particularly DRC, Namibia, Angola, Mozambique and Zambia) to open up export market opportunities for MSMEs.
viii) Facilitate implementation of MSME Trade Shows and Exhibitions with the view to showcase MSME capacities, products and services
ix) In cooperation with the Zambia Bureau of Standards promote adherence to prescribed product standards as a means to enhance the competitiveness of MSME on the local and export market.
x) MSME Competitive (Lean) Scheme Components i. Industry Awareness Programmes/Workshop: MSMEs will be made aware of the Scheme through Nation-wide awareness programmes (online and/or face-to-face, as appropriate) with the assistance of stakeholders like Industry Associations, Implementing Agencies, MSME-DFOs, District Industries Centres (DICs), Large Enterprises/ OEMs.
xi) Training Programmes: Stakeholders like the MSME Officers, Assessors and Consultants will be trained on the MSME Competitiveness (Lean) Scheme to enable an effective implementation by Implementing Agencies like QCI, NPC. iii. Handholding: MSMEs will be provided handholding towards the implementation of Lean Tools and Techniques at three different levels – Basic, Intermediate, and Advanced. C
xii) ompletion of each stage is verifiable end term assessment or assessment by Implementation Agency along MSME -DFOs as the case may be. iv. Benefits/ Incentives: Graded incentives will be announced by the Ministry of MSME for MSMEs for encouraging MSME units’ participation under the scheme.
References
1. Ministry of Commerce Trade and Industry: The Micro, Small and medium Enterprise Development Policy of Zambia, 2008.
2. Ministry of small and Medium Enterprise and Development, Republic of Zambia.
3. MSME Competitive (Lean) Scheme, Advance Level Certification holder is exempted from Daily Works Management Parameter of the MSME Sustainable (ZED) Silver Level Certification.
4. United Nations on Trade and Development: New York and Geneva, 2005
108