By Daniel Chigundu
SMEs and Cooperative Development Minister Sithembiso Nyoni has urged beneficiaries of the Zimbabwe: Works project to formalise their business in order to access more resources.
Zimbabwe: Works is a five-year US$12.5million initiative funded the USAID, DFID and SIDA to strengthen NGOs and private sector organisations to build skills and improve the employment and self-employment status of young Zimbabweans especially women to contribute towards and benefit from economic growth in Zimbabwe.
The project which was incepted in June 2012 and ending this September and has seen almost 29 000 young people benefitting from training services and access to cheap loans.
In a speech read on her behalf, Minister Nyoni said it is only through formalisation that SMEs can be able to get more funding for their business.
“I would like to encourage the beneficiaries of the program here present to formalise your businesses in order to access more loans, expand your businesses, contribute to the fiscus and thereby contribute to the broad economic development of Zimbabwe.
“It’s necessary to be formalised, it’s not a good thing to remain a vendor, so you need to formalise,” she said.
SMEs have become the mainstay of Zimbabwe’s economy owing to massive company closures that have been experienced in the country over the past decade.
Finance Minister Patrick Chinamasa told Parliament a few months ago that only half a million people in the country are in the formal employment and rest is now housed in the informal sector.
According to the FinScope MSME Zimbabwe Survey 2012, the country has about 3.5 million SMEs operating in various sectors of the economy, but 85 percent of them are not registered for various reasons.
The survey says some are not registered because they fear being over-taxed by Zimra; others don’t understand the processes, so allege registration is expensive among many other reasons.
However, failure to register has resulted in many SMEs failing to benefit from the various financing facilities that have been availed by government and financing institutions.
Meanwhile, about 5000 loans worth US$750 000 were disbursed to grow youth owned businesses under the Zimbabwe: Works project and participants generated about US$31 million in income and created 6 000 jobs for their fellow youth.
Speaking at the same occasion, USAID acting mission director Julie Nenon urged beneficiaries to make the most out of the training and networks they have been exposed to.
“There is no doubt that the Zimbabwe: Works project’s results are impressive. And today we applaud them for their great accomplishments that will be celebrated for years to come.
“To all the young people in this room, I would like to remind you that each and every one of you can make a difference in building a stronger economy, stronger communities and a stronger nation; one business, one sale and one employee at a time.
“There is a famous saying, ‘if opportunity does not knock, build a door’. To all vocational and technical training graduates, the project has given you the knowledge, skills and networks and now it is up to you to build your businesses or careers and open any door you want to succeed,” she said