Government is banking on small and medium enterprises (SMEs) to drive the country’s economic growth in a bid to attain a middle income status by 2020.
Rwanda is targeting an average economic growth rate of 11.4 per cent annually in the medium term, up from the per annum growth of 8.4 per cent over the last decade, according to the Minister of Trade and Industry, François Kanimba.
The minister made the revelation last week at the launch of a survey aimed at identifying the country’s “Top 100 mid-sized companies”.
The survey, an initiative of KPMG Rwanda and Nation Media Group (NMG) aims at identifying Rwanda’s fastest growing medium sized companies to showcase business excellence and highlight some of the country’s most successful entrepreneurship stories.
“The duty of a programme like this one is to allow very efficient public private dialogue for the SME industry,” Kanimba said.
To qualify for the survey, the company must have a turnover of between Rwf50 million to Rwf3 billion, has three year financial track record, not listed on the stock exchange and must not be companies in financial/accounting consulting and law firms, banks, insurance.
“Every organisation that will participate in this process should be capable of growing into a continent business,” Josphat Mwaura, the Chief Executive Officer (CEO) of KPMG East Africa said.
The findings of the survey will later be announced on November 30. The survey, which is operational in Kenya, Tanzania and Uganda, will enable participating companies to network with investors to raise capital for expansion or secure strategic partners.
Mwaura adds; “There is a holistic model that is going to contribute to a general improvement of general corporate governance and entrepreneurial capacity within Rwanda.”
Philippe Brizoua, the CEO of Rwanda Gaming Corporation says that the initiative would help SMEs to get organised and thereby propel economic growth.
According to the Minister, the criteria to select the Top 100 will trigger competition for excellence and is going to be a very strong ingredient to increase efficiency in the Rwandan economy.
It comes at a time in which the growth and development of SMEs is one of the top policy priorities for government.
For instance, the Ministry of Trade and industry plans to spend 26 per cent of the Rwf18 billion in its proposed 2012/13 budget on boosting growth of SMEs.
“There is need for Rwanda to develop a kind of conventional strategies with the way we have been dialoguing with private sector to build a Public Private partnership to accelerate private sector growth,” Kanimba said.
Government is in the process of implementing an SME action plan aimed at organising entrepreneurs and helping them access cheap financing as well as improving their business skills.
Experts say that the country needs structural reforms to accelerate investments from 22 per cent to 30 per cent as a share of Gross Domestic Product (GDP) by the end of 2020.
Developing the SME segment is also necessary if the country is to create a strong private sector necessary to create jobs and expand the country’s low export base.