Support Fledgling Entrepreneurs to Create Wealth and Jobs

The Governement aims to formalise 950 informal enterprises by 2030 as a strategy to strengthen the micro, small and medium enterprise (MSME) sector.

This is the target articulated in the recently unveiled sixth National Development Plan (NDP6).

In turn, the Business and Intellectual Property Authority (Bipa) has warned that more than 140 000 non-compliant businesses face deregistration.

Granted, many facing deregistration are likely to be enterprises which have failed to comply with beneficial ownership disclosure requirements.

However, it is an open secret that many entrepreneurs who went through the costly process of business registration just don’t see the value of continuing to operate formally.

Those ones have already and many more are contemplating reverting to the informal sector – preferring to operate under the figurative bureaucratic radar.

The reason why many entrepreneurs fail to migrate from the informal to the formal sector is that no provision exists to register a sole proprietorship or as a sole trader, but only a defensive name registration, which holds insignificant attraction.

To entice small owner-managed enterprises operating informally to formalise by registering as a close corporation (CC) is cumbersome and costly.

Think of those hairdressers, barbershops, caterers and take-away outlets, tuck shops and mini-supermarkets, transport operators, plumbers, electricians, tilers and builders, tailors and garment producers, as well as upholsters operating in your community.

Few, if any, find it advantageous to register as a CC.

The annual compliance requirement is cumbersome and when it comes to the payment of annual dues and engagement of an accounting officer, a fee of thousands of dollars to prepare annual financial statements is just too costly.

In last week’s column the approach to address joblessness among Namibia’s youth by trying to make them entrepreneurs overnight was flagged as deserving reconsideration.

Namibia’s youth must be helped to become skilled and productive to enhance their chances of securing employment.

It is concerning that pitifully few tertiary educational graduates, school-leavers and school dropouts secure gainful employment.

As pointed out last week, the transition from being a pupil to entering the world of work is not easy, and internships do help youngsters gain work experience as a pathway to the world of work.

The government’s strategy, which has a taxation deduction-linked incentive, is applauded as more firms than in the past now run workplace internship programmes.

As for the plethora of public and private sector youth entrepreneurship programmes facilitating funding for youngsters to start a business, the results have not been encouraging.

What has yielded demonstrable results is that funding support to identify and then nurture and Namibian already in business informally will help them gain traction as viable and sustainable enterprises.

They already operate enterprises in the informal sector – some for several years already – and have experienced the sacrifice and challenges of starting a side hustle or a micro-enterprise.

Support for such entrepreneurs, young and old, who are already creating wealth and jobs, collectively create the highest number of new jobs in the country.

Surely they should top the list needing support to overcome challenges constantly faced, such as accessing affordable workspace, securing funding to expand working capital needs, and buying the needed tools and equipment to grow.

– Danny Meyer is reachable at danny@smecompete.com

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