Small businesses are the cornerstone of our economy, they account for 50% of private sector employment and contribute 15-20% to the GDP. As with any developing economy, small businesses and entrepreneurs require extensive support from government and corporates to enhance the contribution of these businesses.
A study conducted in 2013 on the country’s SME landscape cites that a lack of innovative programmes were an impediment for the sectors growth. The report shows that SMEs are vulnerable to domestic and foreign competition and especially imports from other countries. Moreover, highlights that Botswana’s economic diversification and growth is based on the success of the SME, whose success in turn is based on their innovative abilities and can benefit from collaboration between government and corporate institutions.
With a heavy focus on sustainable development Minister Serame made pronouncements on the SMEs during the 2023/2024 budget speech, we will be taking a look into what business owners can look forward:
Value chain Development
- In an effort to bolster and diversify the country’s economic base sectors, a budget of BWP 540.89 million has been allocated towards Value chain Development (VCD) in tourism, minerals, energy, manufacturing and agriculture. This means that government will be investing in improving market structures and the business environment to increase local production and other intermediary activities which will support job creation and socio-economic development. The role of VCD is to enhance the functioning of the marketplace system and create interventions to help overcome bottlenecks and constraints in the value chain. This presents a unique opportunity for entrepreneurs with knowledge and/or access to resources in the chain. To access a portion of the fund’s entrepreneurs must be compliant, and well-versed in the eligibility criteria which can be found of the ministries website.
Improved Wealth Creation Programme
- The reduction of inequality within and among countries is one of the UNs 17 Sustainable Development goals. The effects of the COVID-19 pandemic intensified social exclusion and increased country inequality by 1.2%, resulting in the closure of many small businesses who are still battling to recover from its impact. With the intention to progressively achieve and sustain income for the growth of the economy, business owners have explore opportunities under the new Wealth Creation Programme – an amalgamation of existing empowerment and funding programmes. Of note, is the commitment to continue the implementation of social programmes, particularly those that create employment and improve livelihoods. A commitment of P85 million has been allocated in this respect.
- Furthermore, initiatives such as the Economic Inclusion Act, Entrepreneurship Policy, Minerals Policy and Middle-Class strategy, the government will prioritise inclusion of citizens in the economic development.
Conclusion
The development of Batswana entrepreneurs will directly tie in with the value chain development priority of the 2023/2024 budget. The legislative and policy framework is a welcome development in an area that has historically been fragmented. The obligation is on each market participant to familiarise themselves with the inclusion priority areas and to see how to support inclusion in their value chain.
The current sense in the market is a lack of clarity as to what exactly is required of the private sector, however opens the floor for dialogue. The Economic Inclusion Act sets the baseline and hopefully regulations to be published. under the Economic Inclusion Act will make it clearer for each sector how economic inclusion is to be achieved.