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NCCI's Support Programmes
Background
John Ali Ipinge
The SME sector has been and still is a major driving force in the economy in terms of income and employment generation. It provides some form of employment and incomes to close to 160,000 people, approximately one-third of the nation’s workforce.
The recent estimates indicate that small business sector provides full-time employment for upwards of 60,000 people, ranking it alongside Government which is the country’s biggest employer. The majority of SMEs are mainly found in the retailing sector selling foodstuff and household products, which in essence indicates a skewed sectoral development with no or small real value addition.
Definition of Small Businesses in Namibia
| Criteria | |||
| Sector | Employment | Turnover Less than N$ 000 |
Capital Employed Less than N$ 000 |
| Manufacturing | Less than 10 persons | 1,000 | 500 |
| All other Businesses |
Less than 5 persons | 250 | 100 |
Source: Namibia: Policy and Programmes, 1997
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The small business activities vary between informal, unregistered sector, which are in majority, and formal established businesses. The level of income generation differs considerably between the formal and informal sector, the fact being that most informal operating entrepreneurs enter the business as a last resort rather than a first option to self-employment, whilst formal sector businesses are large in terms of both employment and incomes.
The situation of SMEs in Namibia, except the informal sector, is very favourable, if one compares it with other countries in the sub-region; however, much still needs to be done to develop this sector, if the objectives of the National Development Plan (NDP1) are to be achieved.
Namibian SME Policy and Programmes
In September 1997, the Namibian Government launched an SME Policy and Programmes with the aims to:
- facilitate the growth of income generating activities and increase average earnings of SMEs;
- increase employment opportunities, through job creation and self-employment;
- spread economic empowerment to the disadvantaged section of the community and realize full entrepreneurial potential of the Namibian people.
Various incentives mechanisms are in place to assist entrepreneurs in developing their businesses and generate investment projects. For instance, SMEs are now able to claim the same higher depreciation as manufacturers; SMEs with annual turnover below N$ 50,000 need not charge General Sales Tax (GST); some SMEs with specified inputs will be exempted from paying GST.
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On De-regulation
Much of the legislation, which discriminated against SMEs, has already been repealed, the concentration is now on decentralizing the process of issuing licenses and permits. This process will involve the Local Authorities in setting up one-stop shop centres around the whole country.
Pro-active Programmes
Various pro-active programmes have been designed some of which are already being implemented:
- Financial programmes – Credit Guarantee Scheme, Wholesale Financing, Venture Capital, Revolving Credit Fund, etc.
- Training – Business Management and Technical Skills
- Sites and Premises – Managed Workshops or Incubator Units, Common Facility Centres
- Markets – Provision of Market Sites for SMEs, Trade Missions and Trade Fair Participation, Vendor Development Programme
- Technology Transfer
Chamber's Support Programmes to SMEs
The Namibia Chamber of Commerce and Industry was established in 1990 as a voice of private sector in Namibia, with affiliated regional and local chambers of commerce from all over the country. A new chamber system structure was recently approved at the chamber's 1998 Annual General Meeting, which provides for the establishment of branch offices that will ensure better service delivery, greater outreach, and wider business representation in the whole country. The new chamber system structure will help to integrate the previous fragmented chamber movement in Namibia.
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Chamber Membership
- 17 affiliated regional and local chambers of commerce and business forums representing mainly small business
- 14 associate members
- Over 100 corporate members
A new chamber membership fee is proposed which comes with the implementation of the new one chamber movement structure for Namibia. A sliding scale fee will be put in place that depends on the size of the business, number of employees, turnover and the sector in which the business operates.
Chamber Services to SMEs
In broad the NCCI provides service to the SMEs in the areas of:
- Policy development
- Advocacy, lobbying and representation
- Information
- Business advice
- Other specialized services
Specialized services offered include:
- Business contacts
- Business plan design and formulation
- Trade fairs participation
- Outward and inward trade missions
- Business management training
- Small businesses database
- Business linkages facilitation
- Newsletters
- Seminars and forums on SME development
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Constraints
In addition to the problem of insufficient capacity within our organization, which seems to be an universal problem within voluntary membership chambers of commerce, there are some pertinent issues related to:
- SME programme expansion
- Service outreach
- Cost recovery of services offered to SME sector
- Developmental vs. commercial role of the chamber
The chamber is increasingly getting concerned about the expectations directed at the chamber when it comes to service delivery. As we all know, development is a costly exercise and government should not expect chambers to perform those duties without subsidies and/or capital injection in those programmes.
© Friedrich Ebert Stiftung | technical support | net edition fes-library | November 1999
