We need more coordinated efforts to boost local SMEs

The private sector development policy has therefore identified entrepreneurship as the first pillar in developing a private sector led economy in Rwanda.
An entrepreneur makes shoes. Entrepreneurship is a pillar for a private sector led economy. File.
An entrepreneur makes shoes. Entrepreneurship is a pillar for a private sector led economy. File.

Editor,

RE: “Policies hurting Africa’s entrepreneurship – experts” (The New Times, December 14). Thanks to the Government of Rwanda under the forward thinking leadership of President Kagame, private sector development has been the major focus in achieving the country’s development objectives.

The private sector development policy has therefore identified entrepreneurship as the first pillar in developing a private sector led economy in Rwanda. This policy shows, according to a 2011 Minicom/PSF establishment census, that there are 123,000 firms in the country out of which 114,000 are micro-enterprises (between 1-3 staff), 8,000 small (4-30 employees) while medium/large enterprises are 50.

This means a whopping 9 out of 10 Rwandan companies are micro-enterprises. This is quite a sobering reality to think about. This shows that policies and programmes should focus on the micro and small enterprises as they constitute the majority of private sector in Rwanda. What is in it for the government?

For a start, only 14,000 of those enterprises are registered with Rwanda Revenue Authority and only 11 per cent pay taxes according to the policy. Government concentrating efforts on MSMEs will only help the government collect more revenue. 41 per cent of the private sector jobs are in the MSME according to the 2010 SME policy by Minicom. More jobs created means more prosperity for the country in general. The third advantage is one of enhancing MSME export potential which will ultimately improve the government trade balance.

There are several programme interventions that seem to focus on MSME:

1. Business development centers (BDC) programmes (joint project between Government and Development Bank of Rwanda);

2. Integrated craft production centres known as the Agakiriro centres to be set up in every sector across Rwandas, under Mifotra;

3. The Kora Wigire programme under national employment programme at Mifotra;

4. Community processing centres (run jointly between BDF and Minicom);

5. Made-in-Rwanda national programme.

Out of all these efforts, I notice a critical gap, which is coordination; and oversight, which has seen some efforts needing attention being overlooked or poorly implemented, e.g the issue of informal traders/hawkers or abazunguzayi.

I would propose either a dedicated agency or dedicated ministry or national committee for SME promotion, but whichever the case this would go a long way to focus on the 9 out 10 Rwandan enterprises that form the backbone of Rwandan economy.

MG

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