SMEs Must Harness Regulation 28 – Minister

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By Desie Heita

Windhoek

Small and Medium Enterprises should take advantage of the amendment of Regulation 28 instead of leaving it to outside entrepreneurs with business savvy, Minister of Finance Saara Kuugongelwa-Amadhila told Namibian entrepreneurs gathered at the SMEs conference.

Regulation 28 stipulates that pension funds in Namibia invest 35 percent of their funds in Namibia. The amendment will see pension funds investing a further 5 percent in unlisted entities by 2010. Currently pension funds chose to invest the 35 percent in listed entities.

“The amendment of Regulation 28 and 15 should release more money for investment in unlisted shares that typically form the capitalization of medium-sized enterprises,” said Kuugongelwa-Amadhila.

The Namibian Chamber of Commerce and Industry (NCCI) hosts a one-day SME conference every year to address the key challenges facing the SME sector. This is the second year the conference is running with the theme ‘Localizing SMEs’ Share in the Local Market.’

The president of NCCI, Inge Zaamwani-Kamwi, said the conference provides an excellent opportunity for all major players to identify bottlenecks in the development and growth of the SMEs sector with a view to design strategies and policy interventions required to facilitate the accelerated growth of the sector.

“The theme of this year’s conference was carefully chosen for the purpose of focusing our attention not only at this conference but during the course of the year and beyond, on the role that SMEs can play in the procurement efforts of public and private consumers of goods and services,” Zaamwani-Kamwi said.

Tarah Shaanika said the purpose is to address the challenge facing SMEs when participating in the government and private sector tenders.

“NCCI is very concerned about the tender specifications for many government and private companies’ procurement requirements which prohibits SMEs to qualify and successfully bid for the supply of several products and services, thereby giving them a clear chance to grow and realize their full potential,” the Chief Executive Officer of the NCCI, Tarah Shaanika, had earlier said.

Kuugongelwa-Amadhila said the government procurement system is currently under review to strengthen support to local enterprise development, especially SMEs.

“The review also includes aspects to optimize the use of public procurement to develop the local economy,” the minister said.

Zaamwani-Kamwi said the feeling at the moment is that the procurement of goods and services by Government and large private companies is contributing less to the income and growth of local suppliers than it should.

“We strongly feel that there is an urgent need to review government and private sector procurement policies and target such policies towards the creation of new business and the expansion of existing enterprises,” said Zaamwani-Kamwi.

Kuugongelwa-Amadhila said some of the challenges facing the SMEs, besides access to financing, include insufficient training, unaffordability of proper business centres and premises, and technical barriers such as over-prescribed manufacturing standards of the large-scale industries and multinational corporations.

“In its effort to support SMEs, Government has established a Small Business Credit Guarantee Trust which became operational in 2000 and has recently increased its funding. A further allocation amounting to N$44 million is made to the Ministry of Trade and Industry to enable the expansion of the SMEs and entrepreneur development programme activities in various regions of the country, during the 2008/09 financial year.

“Other intervention measures that Government is providing include assistance with project design, planning, management and entrepreneurial skills development,” said Kuugongelwa-Amathila.

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