SMEs reflect on Budget

THE Joint Consultative Council (JCC), the umbrella body for SME service providers, and the Small Business Information Centre (SBIC), have expressed concern over the lack of clarity in last week’s Budget with regards to SME development.

They said although the Budget presented by Finance Minister Saara Kuugongelwa-Amadhila advocates growth in the economy, the SME stakeholders wanted to know whether this growth was created through creation of new SMEs and the strengthening of existing SMEs. “Particularly frightening are the high poverty level in rural areas.If this Budget should be pro-poor, the question then is how it addresses the plight of the poor in rural areas,” the two SME bodies said in a statement.SBIC said it had observed that businesses in peri-urban or rural areas required greater levels of support than businesses operating in the capital with access to support services.”As much as the Budget tries to address growth of the economy, it is stringent in allocations and rarely gives indications on skills development in the regions.Structures such as Regional Councils have been left with responsibility to implement capacity-building and enhancement programmes directly to the poor.The Budget leaves much to be desired on the Government’s approach in this regard pertaining to SME development,” the bodies said.The JCC said since its inception in 1998 it had observed various initiatives addressing poverty levels in Namibia.But it said the long-term success of these development strategies that address the growth of the poor depended on significant financial support.”The JCC fears that poverty reduction will be out of reach if the initial investment appears not to warrant massive returns.The envisaged goals as enshrined in Vision 2030 are the guiding torch and we all strive towards exceeding the outlined targets,” the JCC said.The SBIC demanded more transparency in the allocation of funding allocated to SME support programmes as well as improved recognition of its services to the poor and by so doing supporting Government in addressing the plight of the poor.”Another burning issue in the SME sector is the tax incentives for SMEs and especially for SME importers.A recommendation to the Ministry of Finance would be to investigate the impact of such an incentive to the economy and the benefit it can have on the growth of the local enterprises,” the SBIC said.”Particularly frightening are the high poverty level in rural areas.If this Budget should be pro-poor, the question then is how it addresses the plight of the poor in rural areas,” the two SME bodies said in a statement.SBIC said it had observed that businesses in peri-urban or rural areas required greater levels of support than businesses operating in the capital with access to support services.”As much as the Budget tries to address growth of the economy, it is stringent in allocations and rarely gives indications on skills development in the regions.Structures such as Regional Councils have been left with responsibility to implement capacity-building and enhancement programmes directly to the poor.The Budget leaves much to be desired on the Government’s approach in this regard pertaining to SME development,” the bodies said.The JCC said since its inception in 1998 it had observed various initiatives addressing poverty levels in Namibia.But it said the long-term success of these development strategies that address the growth of the poor depended on significant financial support.”The JCC fears that poverty reduction will be out of reach if the initial investment appears not to warrant massive returns.The envisaged goals as enshrined in Vision 2030 are the guiding torch and we all strive towards exceeding the outlined targets,” the JCC said.The SBIC demanded more transparency in the allocation of funding allocated to SME support programmes as well as improved recognition of its services to the poor and by so doing supporting Government in addressing the plight of the poor.”Another burning issue in the SME sector is the tax incentives for SMEs and especially for SME importers.A recommendation to the Ministry of Finance would be to investigate the impact of such an incentive to the economy and the benefit it can have on the growth of the local enterprises,” the SBIC said.