Expert Group Meeting (EGM)-CAMIOctober 2010, (Ethiopia)

(Botswana’s Economic Performance): Stable democratic system, and market-led

economy that promotes private enterprise Sound macroeconomic policy management with

over 50% diamond export revenues from the mineral sector.

High average GDP growth, andsustained growth in social and physical infrastructure.

Govt’s consistent efforts to reduce mineral dependence through industrial economic diversification.

2

(Investment climate): Political stability Prudent macroeconomic management, and free

repatriation of profits for non-citizen companies Good labour relations Relatively low crime; and Independent and competent institutions to

resolve disputes and enforce the rule of law.

3

(Industrial Development Policy of Botswana): Industrial Dev. Policy of 1998 focuses on export

oriented production in view of the changed global environment and international competition.

Promotion of sectors with relative advantage, and locally available resources for domestic and export production.

Setting up of down stream and component industries through value chain processing.

Facilitate creation of service and small scale manufacturing to support the competitive export sector.

4

SMEs are vital in achieving industrial and economic development objectives.

Development of this sector contributes to poverty alleviation, employment creation and generation of potential entrepreneurs.

It offers linkage development to large industries. Supports the rural economy in providing income

generating activities. Enable marginalised groups such as the

disabled, youth, and female-headed households to meet basic needs in the informal sector.

5

SMEs require a favourable environment to prosper andexpand to meet challenges of the competitive global economy.

To reach full potential as an ‘engine of growth’ , they need forms of support interventions.

There is need to put in place a policy framework in support of the sector’s development.

Ministry of Trade & Industry is the key institution mandated to lead in SME development.

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(Before Development of the SME policy): Botswana had in place targeted financial support

and advisory programmes to support SMEs. The programmes were uncordinated, due to lack

of policy and institutional framework that time. Although no comprehensive policy on SMMEs was

in place until 1999, most programmes supporting industrial SMEs were initially introduced by Non-Governmental Organizations(NGOs).

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(Before Development of the SME policy): Several policies and programmes that assisted

SMMEs established over the years were set up more in reaction to specific problems encountered, rather than on the basis of a comprehensive policy framework.

In 1974, NGOs initiated Integrated business support programmes and donor finance.

Skill development through vocational training and education was at a basic level.

There was a prevailing misconception that provision of financial support was the solution to SMME problems as it created a dependency syndrome amongst SMMEs towards government funding.

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Establishment of the Small, Medium and Micro Enterprise Policy 1999, proposed a policy framework.

The Small Business Act was promulgated to fastrack the institutional reform process in which;

To achieve efficiency, Government would play a facilitator role of policy formulation and monitoring and allow programme implementation to autonomous agencies.

Policy formulation and programme implementation, all previously performed by Government are separated.

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Item

Size category

Employment levels

Annual Turnover in (Botswana Pula)

In US$ Dollar (Equivalent)

1. Micro Enterprise

Less than 6 workers

Less than P60 000 US$10 000

2. Small Enterprise

Less than 25 workers

Between P60 000 and P1 500 000

Between US $10 000 and US$250 000

3. Medium Enterprise

Less than 100 workers

Between P1 500 000 and P5 000 000

Between US $250 000 and US $833 333.33

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The setting up of appropriate institutional framework to monitor the policy implementation process.

Ensure that appropriate regulatory environment which does not stifle SME growth is in place .

Consolidate efforts forentrepreneurship development and training of SMEs.

Relevant policies should incorporate technological support as key component for SME development.

Market development should include provision of information and creation of market opportunities.

Access to finance was found crucial for the sector.

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(After Development of the SME policy): Govt reserved some small scale industrial economic

activities with low technology for citizen participation.

Recent decentralized licensing of SMEs deregulated and simplified processes to do business by taking services to the people.

Entrepreneurship development was hived-off to an autonomous body.

Botswana Bureau of Standards BOBS launched the SME programme to implement Quality Management System in 2004.

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(After Development of the SME policy): The Economic Diversification Drive (EDD) will

Strengthen implementation of the Local Procurement Programme

New Policy on Science and technology Development will drive SME technological development.

Pilot cluster development initiatives focus on building capacity for the garment sector.

More consultation between private sector and government on the welfare of SMEs.

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Government provides good support for SMEs with less impact:

This is due to lack of coordination, focus leading to overlaps and duplicated effort with limited finance and manpower resources.

Limited coordination with Government Departments and other stakeholders in SME related issues.

Limited access to productive resources such as serviced land, factory shells, modern management and financial resources.

The high cost of utilities constrains SMEs, given their low profit making capacity, most fail to survive.

Weak SME sector due to lack of business culture and unfriendly environment for its growth.

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Need for close collaboration amongst SME business promotion service providers for more impact.

Regional based promotion of entrepreneurs, to tap on differences in resource base and skills across regions.

Collaboration between industry, Academia and Government to train to the needs of the industry.

SME related policies should be harmonized, coordinated and be focused.

The need for strong private sector SME sectoral Associations to assist Government in policy reforms.

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