We don’t need Ministry of Small & Medium Enterprises
Dear editor,
AS Patriots for Economic Progress (PeP) we strongly believe that the creation of
the new Ministry for Small & Medium Enterprises is an unnecessary duplication to the mandate of the Ministry of
Commerce, Trade and Industry .
The Small Enterprises Development Act of 1996 defines an SME as an enterprise with
an annual turnover of not more than K80 million.
This means that when you look at the nature of business entities operating in Zambia, more than 90 percent of them can be classified as SMEs.
On the other hand, the mandate of advancing the interests of Zambian businesses falls under the Ministry of Commerce , Trade and Industry. This
means that with the creation of the new Ministry of Small & Medium Enterprises, there
will be a 90 percent overlap between the two ministries, as they will be servicing the same
entities in the economy.
PeP’s view is that if President Hakainde Hichilema wanted to create an additional ministry to advance the interests of
minorities in the economy, he should have considered creating a Ministry for the Informal Sector.
Several World Bank studies have revealed that the country’s ry’s informal sector accounts
for at least 40 percent of our economy and is made up of marketeers, street vendors and
other traders in the grey economy .
Additionally, the informal sector is not captured in the measurement of the country’s Gross Domestic Product
(GDP) and its participants do not have adequate access to the banking system.
This means that the informal sector players face unique challenges which require the
intervention of Government through the establishment of a dedicated ministry.
We therefore call upon President Hichilema to consider abolishing the Ministry of Small & Medium Enterprises and instead replace it with a Ministry for the Informal Sector.
Such a move will achieve two key benefits; firstly it will help address the duplication that
exists between the Ministry of Small & Medium Enterprises and the Ministry of Commerce,
Trade and Industry.
Secondly, it will help to address the special needs of players in the informal sector and
help them to transition to the formal sector.
Such a scenario would significantly contribute to the much needed growth of our
economy and result in the creation of the much needed employment especially for the youth.
SEAN E. TEMBO,President,Patriots for Economic Progress.
