“The New Imperative for SMME Development in the SADC Region – Cooperation and Collaboration of SMME Development

Institutions.”

Date: 13th October 2011

Presenter: Mpho KelosiwangPosition: Executive Coordinator

Introduction• In the last three decades African countries have pursued regional integration

arrangements to accelerate their economic development.• The Southern African Development Community (SADC) has also joined in on these

objectives.• The change in SADC is interesting, in that originally SADC motives were;

Independence, security, regional solidarity and the fight against apartheid. • Today SADC's main goals are to form common political interests and support

greater trade and investment flows between members. • In order to realise the above goals, In August 2008, eleven of the 14 member

states of SADC officially launched a free trade area (FTA). • The theme of the event was - "SADC Free Trade Area for Growth, Development

and Wealth Creation."• FTA agreement is part of the SADC's ongoing efforts to deepen long-term regional

integration in order to accelerate economic growth and reduce poverty for the millions of people living on the continent.

SADC FTA• The SADC FTA originally covers eleven of the 14

member states which represents a regional market worth about $360-billion, benefiting a total population of 170-million people.

• When Angola and Congo DR join the FTA, they add add a further US$71 billion and 77 million people to the SADC market. Increasing the SADC Regional market worth to $431 billion and 247 million people.

• The SADC FTA programme also included the following– establishing a Customs Union by 2010, – a Common Market by 2015, – a monetary Union by 2016,– and a single currency by 2018.

• The Free Trade Area is supposed to lead to more economic integration of the member states involved through making goods much cheaper, stimulating greater production as well as consumption.

Regional Integration & Role of SMMEs• On the positive side - Regional integration can foster competition, subsidiarity, access

to wider market (via trade), larger and diversified investment and production, socio-economic and political stability and bargaining power for the countries involved.

• On the negative side -integration can be complicated by perceived or real gains or losses among the members that may lead to disputes and a sense of “loss” of national sovereignty.

• We do agree with the then (2008) Chairperson of SADC, Thabo Mbeki, who urged SADC member states to assess how best they could advance the integration effort and the region's trade performance, noting that the most serious constraints to growing the region were underdeveloped structures and supply capacity.

• It is our view that sustainable regional integration cannot be achieved without the full participation of SMMEs in the process of wealth creation in the SADC region.

• However there is doubt if SADC SMMEs can take advantage of the potential opportunities SADC free trade affords them and successfully compete given the numerous problems they are beset with. One of the challenges facing SADC today is to facilitate the engagement of the majority of the economically active people into sustainable socio-economic activities.

SMME Development as National Agenda.• It is our belief that Small, Micro and Medium Enterprises (SMMEs), if structured

well and given adequate support to spur on their development and growth, hold the future as significant contributors to SADC regional economic integration and growth.

• The challenge therefore is, “how do we structure the environment within these countries (and regionally) to ensure that the contribution of the SMME sector to economic development is much greater than it currently is”. This is the theme of my delivery to you this morning.

• Nationally – It is paramount that the SMME Sector development becomes a national

agenda of every SADC member state driven from the highest possible echelon of government.

– This ensures that all faculties of government are geared towards delivery in terms of facilitating the development of the SMME sector.

– Government must also create parastatal institutions whose mandate(s) are bespoke to spearheading and championing the development of the SMME sector.

Collaboration of SMME Development institutions

Regionally•It is our view that in order for SADC to achieve its goals of regional integration and higher level objectives of economic growth, poverty alleviation and employment creation there is need to focus on regional approach to the promotion and development od SMMEs. •The first to enhance and encourage collaboration between national SMMEs Development Agencies and ultimately the formation of a regional organisation to facilitate the SADC wide collaboration on SMME Promotion and Development.•The objective of the association will be;

– To encourage the development of a harmonised SMME legal, regulatory and policy framework within the SADC region;

– To facilitate and enhance trade and investment between SMMEs in the SADC Region;– To promote business linkages and joint ventures amongst SADC SMMEs.– To facilitate the organisation of exhibitions and trade fairs in SADC Member countries

for the marketing of products and small project,– To facilitate the promotion of SMMEs entrepreneurial skills within the SADC Region.

Regional Integration & Role of SMMEs• The objective of the association will be -Continued;

6. To facilitate the exchange of information and experience on SMME promotion and Development among the member countries of SADC;

7. To encourage interaction among SADC SMME Development Agencies - Non Funding;

8. To maximise co-operation among the Member SMME Development Agencies- Non Funding,

9. To act as a reference/advisory body for the SADC secretariat and SADC member states on SMME promotion and development.

10.To promote capacity building of individuals and institutions concerned with SMME promotion in member states.

11.To undertake any other related activities.

Way ForwardIn light of the foregoing, and due to time constraints, I wish to hurriedly proceed to suggesting the way forward,1.Formation of a SADC SMME promotion and Development Association made up of the non funding SMME Development Agencies within SADC.2.Inclusion of SMME Promotion and Development as a NATIONAL DEVELOPMENT AGENDA of every SADC Member Country. 3.Inclusion of SMME Promotion and Development as a SADC DEVELOPMENT AGENDA

Thank You

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