Rikus Grobler | Jun 20, 2017 | 0
SMEs play vital role in competitiveness
The Director of SME Compete, Danny Meyer said small and medium enterprises can play a vital role to improve Namibia’s competitiveness by growing their businesses and graduating from small to big.
Responding to Namibia’s most recent ranking in the Global Competitiveness report, and highlighting the role played by small businesses, Meyer said SMEs have the potential to generate local products that are presently imported, so that at a later stage, they can emerge as players in the export market on the international arena.
Namibia has risen by one place on the Global Competitiveness rankings for 2016/17 to 84th up from 85th with a score of 4.02 (3.99 last year), in the World Economic Forum’s global competitiveness report released in September.
“At local level in a town SME’s face stiff competition and have to work very hard and smart too or else they will be driven out of business by local and foreign competitors,” Meyer told the Economist.
According to Meyer, political stability is one of the main reasons that leads to Namibia’s label as a reliable country in which business can be conducted and it underscores the attractiveness it holds for foreign investors. It is also what moved the country up one notch in the competitiveness rankings.
“Underscoring this is the commitment voiced and routinely restated by the country’s leadership, on platforms locally and abroad, that Namibia remains focused on overcoming challenges such as poverty, high unemployment, public sector expenditure and corruption. [The government] is working on creating an environment conducive to broadening the country’s industrial base. [It is] putting measures in place that will lead to enhanced revenue or tax collection,” Meyer said.
However, Meyer noted that the improved rating is no cause for celebration yet as much work needs to be done. The new rankings also highlight problem areas that need more attention including education and skills development. “Obviously the country’s economic growth can not reach optimal levels if the aforementioned and other deficiencies as highlighted in the report are not tackled with renewed vigor.”
Meyer identified skills deficiency as one of the factors that drags Namibia’s competitiveness rating down, adding that it is no secret that there is a shortage of certain skills that in turn retards growth in the private sector. These include professionals such as chemical, civil, structural, industrial, mechanical and electrical engineers. There is also a shortage of accountants, marketing experts, food technologists and industrial designers, among others.
“There is a deficiency in certain trades too, including in the garment making, leather goods and footwear manufacturing, and agro-food processing sectors. Also in service sectors such as light engineering and refrigeration,” he added.
Meyer noted that entrepreneurs or corporate firms who need to recruit people with the right skills to help grow business, should be assisted and not hindered or obstacles placed in their way by bureaucrats.
Another factor, Meyer said, is the regulatory environment “The environment must be enabling. So there is need to review laws, regulations and rules to ascertain if they remain relevant, appropriate and needed. If not, get rid of them in this way discarding red tape and irrelevant bureaucracy. Furthermore set time limits for documents, applications and requests to be processed and hold officials accountable if targets are not achieved,” he said.
The cost of doing business and the attitude that Namibia’s goods and services can not compete in the international or export arena, must be discarded and replaced by a can-do belief, Meyer said.