Small and Medium Enterprises (SMEs) have called for a coherence in regional policies to enable a desired growth and contribution in creating jobs and incomes in East Africa Community(EAC).
The call was made this Monday January 30, 2023 by EAC youth and women entrepreneurs who are holding a two-day workshop in Kigali to discuss daunting challenges faced in the SMES sector in the region despite having an East Africa Youth Charter, and the East Africa SME Portal.
The Regional Workshop for SMEs, Women and Youth Entrepreneurs convened over 30 people from business membership organizations and SMEs from all East African countries.
John Bosco Kalisa the Executive Director of the East African Business Council (EABC) said that since the establishment of the EAC youth charter and portal, nothing has been done to establish a unifying policy on SMEs.
“There is a need for national SMEs policies to be aligned and Governments to offer special incentives to accelerate SME development and empowerment to do business and trade effectively,” Kalisa said.
Despite SMES making up to 90% of businesses, employing 60% with a GDP of $300billion in EAC, Kalisa said that the current status of grading SMEs in the region is not uniform in each member state and each has its own standards of measuring what qualifies as an SMES.
He said, for example, Rwanda uses the yardstick (measure) of taxes, while Kenya uses the standard of number of jobs created, and yet other countries use the amount of capital generated over years.
“If we have the same standards and agree on exemptions of taxes, but also provide incentives to SMEs, we will see most of the daunting challenges addressed,” Kalisa said.
Case studies in EAC SME Sector show that most of the players have challenges in access to finance, to markets due to non-tariff trade barriers and are set back by national based policies which don’t allow them to grow and do business outside.
Dennis Karera, the EABC Vice Chairman said that the first move for youth, women and entrepreneurs should strive to be bankable by enhancing integrity, reliability and hard work.
Karera said SMEs should be empowered to trade under African Continental Free Trade Area Agreements (AfCFTA) but also enhance market intelligence and data on opportunities in other African countries, and enhance the aggregation of products to boost sustainability and reliability of supply.
Former EALA Member of Parliament (MP) Maasay Pamela Simon, who was until last month behind the EAC Simplified Trade Regime for Women Cross Border Trades, said that at the regional level the EAC has already established a committee in charge of policies and policy implementation and this concern will be tabled at EAC Ministers to their respective Heads of States.
Mary Ngechu, EABC SME Goodwill Ambassador said the EAC bloc needs an SME think-tank to foster the development of the sector and unlock challenges of quality, market access and trade requirements that youth, women and entrepreneurs face.
The outcomes of the workshop, which include access to affordable and alternative financing, information on opportunities and creating SMES think-tanks and role models, will be submitted as a working document for the EAC and partners to address as a way forward.
On the side of donors, Lamech Wesonga, the GIZ Economic Policy Advisor (AfCFTA -Trade in Goods Advisor to the EAC) said the region is the most proactive economic community in Africa and committed to enabling the block address the current challenges but reiterated GIZ’s commitment to supporting the Governments and the private sector to champion the AfCFTA and SME agenda.