Small- and medium-sized enterprises portend the future growth for industry and trade in this country. They constitute the next frontier for economic growth and transformation. They contribute 25 per cent of the gross domestic product, but have potential to expand exponentially, if properly supported.

Policy papers have been published and the government has on several occasions expressed its desire to promote SMEs. However, oftentimes the discussions take place at workshops and conferences or exist just on paper. There is little evidence to demonstrate that the policymakers are actually seized of the matter and, therefore, driving it to the desire destination.

INFRASTRUCTURE

Precisely, the growth of SMEs lies in practical support, including incentives and markets for the products, which is what the government should focus on.

President Uhuru Kenyatta has aptly captured the state of SMEs and, in particular, did the right thing to admit that the government has given lip service to the sector. Speaking at a conference at Strathmore University this week, the President was candid that the government has done little to support SMEs other than giving lofty promises that are never actualised.

The role of government is basically facilitation, which means providing the right infrastructure, formulating proper policies, minimising administrative and legal bottlenecks in addition to operating a favourable financial and tax regime.

RESTRICTIVE

In reality, the obtaining scenario is restrictive and punitive. In major cities like Nairobi, the areas where SMEs operate are poorly serviced in terms of infrastructure, water and sewerage. Take the case of Gikomba, one of the country’s largest open-air markets; infrastructure and services such as security are appalling.

At the macro level, the cost of utilities such as electricity, as well as tax structures, are prohibitive, making it difficult for small-scale traders to break even, let alone make a profit. Matters are made worse by the proliferation of cheap imports arising from the liberalisation policies, which goods saturate the market and crowd out locally produced commodities. Services such as banking are equally expensive as they are generally designed for the high-end clientele, hence locking out small-scale traders.

MISMATCH

In effect, there is clear mismatch between policy and practice in regard to small-scale trade. And this is the subject that the government must address. Large-scale enterprises are growing minimally, if not stagnating, which leaves SMEs as the alternative for economic development. The corollary, therefore, is to give serious attention to that sector. That means the national and county governments must provide infrastructure and create a conducive environment that facilitates such enterprises.

Source Nation Media

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