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Ministry of SMEs holds the key to Zimbabwe's Growth

by Mandla Ndlovu
13 Apr 2024 at 17:37hrs | Views
The Monetary Policy statement and other documents indicate that Micro, Small, and Medium Enterprises (MSMEs) contribute a significant 60% to Zimbabwe's gross domestic product (GDP). This news highlights the immense potential of these enterprises in driving economic growth and job creation. 60% of the nation's GDP is therefore housed under the Monica Mutsvangwa headed Ministry of Women Affairs, Community, Small and Medium Enterprises Development.

However, despite their substantial contribution, the Ministry of Finance has not allocated sufficient budgetary resources to support the growth and formalization of the MSMES.

Disturbingly, a mere 4% of bank loans are directed towards the MSME sector, further exacerbating their struggle for financial support.

The absence of a Venture Capital Board on the Zimbabwe Stock Exchange (ZSE) or the Victoria Falls Stock Exchange (VFEX) only compounds the issue. With MSMEs inherently considered more risky by lenders, the lack of a dedicated platform for venture capital and investment further limits their access to funding. This, in turn, hampers their expansion, innovation, and competitiveness in the marketplace.

It is imperative that Minister Monica Mutsvangwa takes an innovative approach to address these concerns and support the growth of MSMEs. The sector's potential as a driving force of the economy cannot be overlooked, and thus, stronger policies must be implemented to ensure their sustained development. One key measure would involve establishing a robust and vibrant advisory board that focuses exclusively on MSMEs. This board would provide strategic guidance, expert insights, and recommendations to the Minister, enabling her to make informed decisions that foster growth in this vital sector. While coordinating and engineering necessary structures to support the MSMES sector.

While it is commendable that the Ministry emphasizes the women and gender aspect of its operations, it is crucial not to neglect the MSMEs that are now the backbone of Zimbabwe's economy. The Minister needs to strike a balance between promoting gender equality and empowering MSMEs, channeling resources, and attention to both areas equally.

Moreover, the lack of financial support for MSMEs is substantially impacting the exchange rate and overall economic stability. By enabling these enterprises to flourish, Minister Monica Mutsvangwa can contribute to the reduction of informal economic activities and promote job creation, ultimately leading to a more stable and robust economic landscape.

It is evident that MSMEs are vital not only for economic growth but also for job creation and poverty reduction in Zimbabwe. Minister Monica Mutsvangwa must take immediate action to address the funding disparity, ensure the establishment of a Venture Capital Board, and create a dedicated advisory board that can provide timely and sound advice. Only through these proactive measures can the Minister harness the full potential of MSMEs for the benefit of the nation, its people, and the stability of the economy.

Source - Byo24News