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State should walk the talk on SME growth

Tuesday February 25 2020

EDITORIAL
By EDITORIAL
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Small and medium enterprises (SMEs) have emerged as a big driver of the economy.

Available statistics show that the sector contributes a third of the economy, which is no mean achievement, considering that decades ago, the figure stood at 13 per cent.

Additionally, and significantly, SMEs have emerged as a major employer, offering jobs to some 15 million people at a time when the economy is depressed and formal jobs diminished.

This week, the Nation Media Group, in concert with other partners, is hosting SMEs exhibition in Nairobi with the objective of bringing together those involved in the sector to interact with the public and other critical actors like banks and other financiers to determine protocols for expanding and facilitating the growth of these establishments.

Such interaction is pertinent to bring to light crucial issues affecting the establishments as well as creating a forum for them to showcase what they have to offer.

ROOM FOR IMPROVEMENT

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Socio-economic variables show that the future of this country depends on SMEs and therefore the imperative to create a conducive environment for their growth.

Formal sectors are struggling without clear direction. This is the reason why the government and all critical players have to focus on SMEs.

On paper, several initiatives have been laid out that have given impetus for the growth of SMEs.

Last year’s World Bank report on "Ease of Doing Business", for example, painted a rosy picture of Kenya’s trading regime.

The country was ranked in position 56, an improvement from 61 the previous year. What this means is that the country had removed obstacles that hinder business and therefore a boon for SMEs.

Even so, practical evidence shows the contrary. The first challenge is infrastructure and operational environment.

LEGAL FEES

Second is lack of access to credit facilities. Third, they are not accessible to research and innovation to spur them.

Two years ago, President Uhuru Kenyatta publicly apologised to SMEs at a conference at Strathmore University, stating that the government had failed to offer infrastructure and create a favourable climate for businesses.

Consequently, he directed Energy and Transport ministries to provide requisite infrastructures to SMEs, especially hubs like Gikomba and other such big markets.

At last year’s Jamhuri Day celebration, President Kenyatta revisited the matter and directed the Judiciary and the Attorney-General to review legal fees for commercial disputes of below Sh1 million.

Similarly, he asked the Kenya Revenue Authority to ease the SMEs’ tax regime.

Beyond the glamour and rhetoric, practical decisions have to be made to catapult SMEs to the next level.

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