Full Address By Deputy Minister of Women Affiars, Community, Small And Medium Enterprises Development Hon J. N. MHLANGA
AT THE LAUNCH OF THE SMEs CENTRE AT METRO MINI FACTORIES, BULAWAYO METROPOLITAN PROVINCE
It is a great honour and privilege for me to be here today to officiate at this launch of the refurbished Metro SMEs Centre commonly known as Bulawayo SMEs Centre.
Distinguished Guests, we are gathered here today to celebrate the immense and significant contribution that has been made by the various stakeholders including the tenants of the SMEs center, the Ministry, ILO, Old Mutual, The Chamber of SMEs, Bulawayo SMEs Trust, Bulawayo City Council, National University of Science and Technology (NUST), National Social Security Authority (NSSA) and Junior Achievers Zimbabwe who were passionately involved in this project.
Let me start by applauding this collaboration which resulted in the successful implementation of this project whose aim is to promote safe and decent working space for the informal sector which has been highly prioritised by The National Development Strategy 1.
This investment and development, which I am reliably informed that it was to the tune of US$165 000, is a sure way to encourage the informal sector to work towards formalization and be recognised.
It is indeed befitting that we take time to reflect and recognise their sacrifices, achievements, aspirations and to also understand the challenges confronting them as they gallantly contribute to the development of our nation.
According to ILO, the informal economy comprises more than half of the global labour force and more than 90 per cent of micro and small enterprises (MSEs) worldwide.
Informality is recognized as an important characteristic of labour markets in the world with millions of economic units operating and hundreds of millions of workers pursuing their livelihoods in conditions of informality.
In Zimbabwe various studies have pointed to high levels of informality which is confronting our economy with the 2019 Labour Force Survey showing that 76% of the country’s working population is engaged in the informal economy.
Work in the informal economy is often characterized by small or undefined work places, unsafe and unhealthy working conditions, low levels of skills and productivity, low or irregular incomes, long working hours and lack of access to information, markets, finance, training and technology.
Workers in the informal economy are not recognized, registered, regulated or protected under labour legislation and social protection. The root causes of informality include elements related to the economic context, the legal, regulatory and policy frameworks and to some micro level determinants such as low level of education, discrimination, poverty and lack of access to economic resources, to property, to financial and other business services and to markets.
The high incidence of the informal economy is a major challenge for the rights of workers and decent working conditions and has a negative impact on enterprises, public revenues, government’s scope of action, soundness of institutions and fair competition (ILO)
Today therefore avails an opportunity for the Government and the nation and all key stakeholders to reflect and acknowledge that with such interventions as we are witnessing today, there can be immense contribution in the promotion, preservation and sustainability of enterprises and creation of decent jobs by facilitating the transitioning of those operating informally to formality.
I am happy that the Ministry, together with ILO and other stakeholders, have decided to honor and show the nation that we can complement each other for the development of decent workspaces for Micro, Small and Medium Enterprises (SMEs) for the benefit of the country.
As we have witnessed during the tour of the facilities, the design concept was to reimagine the contemporary workspace for SMEs through use of Biophilic Design Principles such as natural materials, animate things (living walls, hanging planters etc), day lighting, creating opportunity for workers to meet one another, privacy and semi-privacy and colour patterns based on enhancing cognitive abilities.
The design also made the workspace inclusive /accessible to impaired users which the original facility did not cater for.
Distinguished Guests, as we celebrate today, we want issues that matter most in the Informal economy to be brought to the fore and to secure honest commitments to address them. Let us all commit ourselves to supporting informal sector aspirations to access funding, markets, trainings, safe working spaces and formalization.
This collaboration will promote higher productivity and improve working conditions of the informal economy. This intervention demonstrated the importance of deploying integrated strategies to facilitate the transition of informality to formality.
The task that has been completed will create an enabling environment, improve incomes, as well as promoting the rights of workers in decent working conditions that will upheld their dignity in working places which is well in line with the country’s vision of achieving an upper-middle income status by 2030.
The continuous expansion of the informal economy confronting our nation needs to be addressed.
The majority of these workers are at the very bottom of the economic and social ladder and work under unhygienic conditions. This has deprived the sector much needed markets to sell their products hence can’t sustain their businesses.
It is therefore imperative to resolve the challenges this sector faces and develop strategies for its formalisation. The first important lesson emerging from the interventions on the ground is that formalising the informal economy should be comprehensive and multi-pronged.
Recognising the need for a coordinated approach, Government has come up with several initiatives towards promoting formalization of informal sector, some of which include the reviewed MSME Policy (2020 – 2024) – Premised on 12 Strategic Pillars to support the development and growth of MSMEs. Some of these initiatives include:
Information dissemination of regulatory, registration and licensing procedures. Informal sector associations play pivotal role for development of informal sector business. Government with support from other stakeholders supports the formation and capacitation of associations at local, district, provincial and national levels through training on areas such as leadership, management skills, governance and financial management. The association then act as the link between the informal sector players and the various key services providers such as Local Authorities, Registrar of Companies and Tax Authorities among others.
Government is availing funding facilities for the sector through: – SMECDO, Zimbabwe Women Micro Finance Bank, Community and Women Development Fund, Empower Bank and Microfinance Institutions (MFIs). These funding schemes target women, youth and other categories of MSMEs. It also supports the formation and strengthening of savings and credit cooperatives where the members pull their resources together for on lending to the members which is a source of financing income generating projects.
The Government of Zimbabwe through the Ministry has been playing a vital role of facilitating and co-coordinating workspace provision in all provinces. Currently Government is undertaking construction of workspaces for players in the informal sector in Gweru, Gwanda and Chikomba. Six more projects are earmarked for implementation under the 2020 budget. Government also continues to encourage Local Authorities and the private sector to channel more resources towards this cause.
Government with support from ILO has engaged a consultant to develop a formalisation strategy for the country and we hope that this will proffer some clear interventions to accelerate the formalization agenda in our country. Consultative meetings are underway in all provinces in order to get valid contributions from the informal sector in Zimbabwe in a bid to facilitate the transition of informal to formal.
Despite these efforts, there still remains a yawning gap between the formal and informal in terms of their access to opportunities especially markets, finance, skills and such other critical services.
Ladies and Gentlemen, Government is also encouraging the promotion of Public Private Partnership (PPP) for accelerated development of our nation. In order for our country to develop, the private and public sectors need to create synergies and linkages that facilitate economy growth and development.
The informal sector needs to be capacitated so that they reach their potential and can fully participate in the economic activities of the country. This will improve the quality of life for women, men, the youth and families and communities at large.
To the MSMEs, I urge you to utilize various opportunities presented by Government to grow your businesses from micro to small, small to medium and from medium to large corporates. This is the progression path that will tip the scale of development to ensure that our nation attains the upper middle income status by 2030.
I would like to urge you MSMEs to interact with various Government departments such as Registrar of Companies, ZIMRA and Local Authorities in order to formalize your businesses.
The importance of formalization is critical for the development and growth of MSME businesses as it creates opportunities for fostering linkages with peer MSMEs, business support service providers, and big corporate and financial institutions in order to build trust and good relationships which are important attributes in catalyzing the growth of SME business operations.
Once again I would like to express my sincere gratitude to International Labor Organization and all the stakeholders for your efforts to ensure MSMEs access decent workspaces.
I urge other Development Partners and the Private Sector to emulate this move to by ILO and partner government in capacitating MSMEs towards achieving the 2030 middle income economy set goal pronounced by His Excellency.
I would like to assure you that my Ministry fully appreciates efforts by the Development Partners and is ready to work with you to ensure that the MSME sector grows and contribute to the realization of the agenda 2030.
To the MSMEs who will benefit from the center, I would like to urge you to continue aiming high in implementing innovative strategies to grow your business operations from one level to another.
Esteemed guests let me conclude by saying that we should remain resolute and focused in our endeavor to achieve the formalisation of the informal sector. The Government commits itself to the provision of safe working space and sustainable infrastructure to all MSMEs formal or informal.
With these remarks, I want to declare the refurbished SMEs Centre officially launched.
May God Bless you all.
I thank you.