Programmes in place for informal sector support

Source: Programmes in place for informal sector support | The Herald July 10, 2019

Fradreck Gorwe
The Government through the Ministry of Women Affairs, Community, Small and Medium Enterprises Development has lined up a number of programmes to support the informal sector, having noted with great concern the immense contribution by the sector to the country’s economy.

“The Government recognises the immense contribution that the SMEs and informal sector is making to the national economy.

“The sector provides employment to over 80 percent of the country’s working population and contributes above 60 percent of National Gross Domestic Product (GDP).

“The ministry implements a number of programmes to create an enabling environment and improve the ease of doing business for the sector,” said the ministry in a press  statement.

The informal sector had long been reputed for its quest for recognition and consideration when it comes to treatment and support mechanisms. Programmes drawn for the rescue entail; “Lobbying for user friendly services and regulations for SMEs and the informal sector including but not limited to taxation, business registration and licencing; Promoting access to markets, finance and technology; Linking SMEs vertically to large corporates and horizontally with other SMEs along various key value chains such as agriculture, manufacturing, mining and services; Facilitating ease of movement among Cross Border Traders; Developing strategies for social protection for SMEs and the informal sector, and providing the platform for engagement between the sector and the Government,” added the statement.

The methodologies articulated above seek to ensure closure to Informal sector grievances among which trends unconducive regulatory environment, deterrent taxes, rare opportunities for synergies with larger corporates, perceived relegation from procurement processes and a suppressed market share.

Impetus behind these enhanced efforts to improve the informal sector’s welfare was the recent dialogue between 13 SMEs and informal sector associations, and Government ministries and agencies.

The parties had agreed on resolutions to mitigate certain of the challenges bedevilling the Informal sector.

They resolved to ensure inclusion of the sector in the Tripartite Negotiating Forum; simplification of taxation systems; the establishment of a social protection scheme which suit the circumstances of the sector.

They had also agreed to put in place modalities for ring-fencing public procurement from SMEs and the informal sector, and to work with local authorities to ensure improved working environment for SMEs and the informal sector.

Strategies to improve the ease of doing business for the informal sector are in line with the Government’s steps towards an inclusive economy characterised by inclusive business for inclusive growth.

An inclusive business model is a commercially viable model that benefits low-income communities by including them in a company’s value chain on the demand side as clients or on the supply side as producers, entrepreneurs or employees in a sustainable way.

“The Government acknowledges the challenges being experienced by the sector and will continue its efforts towards solving them,” read further the statement.