Regulatory policy

MSME policy aims to foster the development of small businesses

Elijah Mukubonda

The Ministry of Industrialization and Commerce (MIT) launched the MSME Policy which was approved by Cabinet and Parliament in 2016. The main objectives of the policy are to foster the development of MSMEs by adopting international good practices for modernization and upgrading of technology. The ministry also launched the 10 Growth Strategies after a public-private dialogue process with relevant stakeholders endorsed the strategies to improve value addition, expand industrial production and increase growth rates.

Growth strategies include cosmetics, game meat products, gemstones and jewelry, handicrafts, leather and leather products, metal fabrication, seafood, swakara products and wool, taxidermy products and charcoal.

The new National Policy on Micro, Small and Medium Enterprises (MSMEs) is a framework for creating an enabling regulatory environment in which the public and private sectors can develop and promote small businesses. The policy overlaps with the 1997 Small Enterprise Development Policy and Program aimed at addressing the challenges faced by SMEs in the areas of finance, marketing, technology, infrastructure, skills development and institutional support. as the country moves towards Vision 2030.

A review was deemed necessary to incorporate the latest trends in MSME development and to align the document with national objectives. The ministry strongly believed that for the MSME policy to produce the desired results, it must be relevant, coherent and fit for purpose. Therefore, the policy preparation process emphasized the engagement of stakeholders, the public and MSMEs through workshops held in all regions of the country to gather practical inputs that promoted and strengthening effective MSME support programs across the country.

The National Policy on Micro, Small and Medium Enterprises has been aligned with national goals as expressed in Vision 2030, National Development Plans as well as Namibia’s Industrial Policy of 2012 and its Implementation Framework and its recently adopted strategy known as “growing at home”. as well as the Namibian Financial Sector Strategy 2011-2021. The policy objectives are to foster the development of MSMEs by adopting international best practices for modernization and upgrading of technology, to promote women’s entrepreneurship and to ensure gender-balanced economic development as well as to reduce regional and partial imbalances in industrial development with Namibia. the economy by facilitating the establishment of MSMEs in rural and former underserved urban areas and ensuring that both are integrated into the economy.

Support programs for MSMEs have been put in place to address the challenges, there are still challenges in implementing business ideas due to finance, access to land and lack of entrepreneurial skills. Financing MSMEs is not attractive to financial institutions because these small businesses are perceived as representing high-risk investments that do not yield commensurate returns. Even though SMEs offer promising and commercially viable investment opportunities, MSMEs are often not backed by adequate guarantees. As a result, only a few businesses use financial services while the majority of MSME businessmen depend on their own financial resources and the contribution of family members and friends. Regarding the issue of market access, the majority of the Namibian Economic Policy Research Unit, including the Small Business Impact Assessment, shows that a low percentage of SMEs export their goods or services, while a moderate percentage sell their goods or services in the administrative region where they operate. Due to the limited size of the Namibian domestic market, MSMEs need to export their products or services to grow. Limited use of financial services is also attributed to low financial literacy and unbankable business plans.

*Elijah Mukubonda is the Director of Information at the Ministry of Industrialization and Trade

2022-02-01 Staff reporter