Transcript Slide 1

The dichotomy within the institutional Framework
of SMME development in Botswana
23 October2008
SMEs make up 95% of all companies in
Botswana
Annual
turnover
Employment
> P5m
> 100
Medium
1.5m-5m
25 – 100
Small
60k-1.5m
6 – 25
Micro
< 60k
<6
Large
2
SMEs contribute 42% to total GDP.
5 % (Large
58%
(Large Enterprises)
Enterprise)
42%
(SMMEs)
95% SMMEs
Firms
3
Contribution
to GDP
Institutional Framework
SME
Development
•Local Enterprise
Authority (LEA)
•Citizen
Entrepreneurial
Development Agency
(CEDA)
•Rural Industries
Promotions Company
(RIPCO)
Cross Cutting Mandate
•Botswana National
Productivity Centre (BNPC)
•Botswana Bureau of
Standards (BOBS)
•National Development Bank
(NDB)
•Botswana Technology
Centre (BOTEC)
•Botswana Tourism Board
(BTB)
Dr. Gordon Murray: University of Exeter
Large Enterprises
Development
•Botswana Development
Corporation (BDC)
•International Financial
Services Centre (IFSC)
•Botswana Export
Development and
Investment Authority
(BEDIA)
Current SMME Participatory map Botswana
Policy
Formulation &
legislation
Implementing policy
Finance
Credit
Accreditations
Standards
Training
Technology
Investment
Support
Infrastructure
(space provision)
Beneficiary
Ministry of Trade and Industry
Ministry of Finance and Development Planning
Ministry of Agriculture
Ministry of Labour and Home Affairs
Ministry of Communications Science and technology
Ministry of Local Government
Ministry of Education
CEDA, LEA, BECI, NDB, BDC, BEDIA,BNYC,BOBS, BNPC,
BOTEC,NFRTC, RIPCO (B), UNIVERSITY, JAB, BOTA
Venture
Capital,
The
Business
Clinic
WFHB
Consultants
BIDPA
Advocacy
BOCCIM
Enterprise
Botswana
SEPROT
District and town councils
SMME
Local Enterprise Authority
•
LEA was established in 2004 with the following broad functions;
• provide business development services e.g. screening, business planning
facilitation, training and mentoring.
• identify business opportunities for existing & future SMMEs
• promote domestic and international linkages, especially between SMMEs
and Government, large business entities and other SMMEs
• Encourage exploitation of government & large firm procurement
opportunities
• facilitate access to finance, standards via competitive improvement
programs e.t.c, infrastructure, and changes in regulations
• facilitate technology adoption & diffusion
• promote general entrepreneurship and SMME awareness.”
Deliverables of LEA
•
•
•
•
foster citizen entrepreneurship and empowerment,
achieve economic diversification,
promote exports,
encourage the development of a competitive and sustainable SMME
community,
• create sustainable employment opportunities,
• promote the development of vertical integration and horizontal linkages
between SMMEs and the primary industries in agriculture, mining and
tourism and
• improve efficiency in the delivery of services to businesses.
Deliverables
•
•
•
•
•
•
The deliverables of LEA are broad, cross cutting and demand a wide implementation span.
Based on a comparison between the expected deliverables and the functions there is a
disequilibrium in the continuum of implementation for the achievement of results.
The challenge therefore is, “how do we structure the institutional framework within
Botswana to bring equilibrium and also ensure effective implementation of SMME
development strategies?”.
LEA is charged with the overall development of the SMME sector in Botswana and it is
housed in the Ministry of Trade and Industry.
In the implementation of its mandate it is expected to collaborate with other key players as
shown in the participatory map of SMME in Botswana.
These key players are located in different Ministries guided by their own statutory obligations
and mandates.
Current Challenges
• While this may appear an acceptable institutional scenario, this poses
considerable challenges, these being;
1.
2.
3.
4.
Lack of coherence in implementing SMME specific interventions.
Inability to prioritise targets and strategic focus
Inefficient and ineffective service delivery
lack of a national coordinating mechanism in the development of the SMME
sector.
5. Weak institutional relations and synergies resulting in silo effect.
6. Narrow policy framework
A comprehensive & integrated
approach is required
Training
Finance
BOTA/UB/LEA
CEDA/NDB/LEA
Product Devt/
Technology
Marketing
RIPCO/BOTEC/LEA
Advocacy
BOCCIM/BEMA/LEA
10
BTB/BEDIA/LEA
Chile SMME Participatory Map
Chile Experience
•
•
•
•
•
In Chile the SMME Agenda is coordinated by the Chile Economic Development
Agency (CORFO.)
It is responsible for policy advice, coordination and implementation.
CORFO develops and implements SMME development strategies and coordinates
activities of institutions who play a role in SMME development in Chile.
CORFO also serves as a good source of important information and the main data
point for SMMEs.
This well coordinated and focused delivery framework and strategy has resulted in
Chile achieving a high rating in terms of entrepreneurship and SMME development.
Thailand SME Participatory Map
Main Agencies for SMEs Development & Promotion
Develop strategies for SME development & promotion
 Decide on target sectors & definition for SMEs
 Coordinate SMME development & implementation
 An SMEs Information Center & advocate of suitable enabling environment
OSMEP
Policy
Regional
MOTS
Imply
MOF
MOC
MOAC
MOS T
MOI
S ME BANK
S ICGC
S upport
•Support credit to SMEs
•Credit Guarantee
OPDC
• To develop
resources to
SMEs
IEAT
MOL
MOC
MOPH
OSMEP
SME BANK
ONE-ASSET
•VC
SPECIALIZED
S ME THAI
INSTITUE
• To promote • To develop
industries &
technology &
entrepreneur employees
IS MED
FTPI
•Training & develop
labour force
TIS I
IS O
BOI
To create investment
• Standard to SME & • Policy
for SMEs
International Standard • Benefit forSMEs
DIW
FTI , TCC
SMEs Entre pre neur
Association
•To establish
• To support & promote
environment& community • Private sector to promote 2
Industrial Estate
Authority for SMEs
SMEs
Thailand and other Countries experience
•
•
•
In Thailand the Office of Small and Medium Enterprises Promotion (OSMEP) is
responsible policy development, coordination and the development of strategies
for SMME promotion and development.
While not an implementing agency it coordinates all the SMME implementing
agencies.
The Small Business Administration in the US plays an implementing, coordinating
and advocacy role.
LEA suggested SMME Participatory map for Botswana
Policy
Formulation &
legislation
Implementing policy
Finance
Credit
Accreditations
Standards
Training
Technology
Investment
Support
Infrastructure
(space provision)
Beneficiary
Ministry of
Ministry of
Ministry of
Ministry of
Ministry of
Ministry of
Trade and Industry
Finance and Development training
Agriculture
Labour and Home Affairs
Communication Science and technology
Local Government
LEA
(Implement, Coordinate and Ensure Delivery of SMME Development)
CEDA, BECI, NDB, BDC, BEDIA,BNYC,BOBS, BNPC,
BOTEC,NFRTC, RIPCO (B), UNIVERSITY, JAB, BOTA
Venture
Capital,
The
Business
Clinic
WFHB
Consul
tants
BIDPA
Enterprise
Botswana
Advocacy
BOCCIM
BMO
&
Associations
SEPROT
District and town councils
SMME
Way forward
•
•
•
•
•
Our experience on SMME development in Botswana is that a lack of well coordinated SMME
development agenda makes it very difficult to efficiently and effectively serve the SMMEs.
Countries that have a well coordinated SMME development Framework like Chile, Thailand,
Taiwan, Netherlands and South Korea consistently achieve higher TEA and FEA in the Global
Entrepreneurship Monitor (GEM) reports.
We believe that SMMEs can be assisted more effectively through a one-stop-authority, of a
similar nature to OSMEP in Thailand and CORFO in Chile. This Authority should be responsible
for SMME development strategies, implementation and coordination of all SMME
development activities in the Country. A streamlined and well coordinated framework will
make it easier to Monitor and evaluate performance and effectiveness of all institutions and
programmes.
We are currently proposing changes of similar nature to our SMME participatory map.
This will also make it easier to mainstream entrepreneurship and SMME issues within the
government policies.
Thank You