Kiyapili Sibanda, Business Reporter
SMALL to Medium Enterprises and Co-operative Development Minister, Sithembiso Nyoni, says 200 000 informal businesses were formally registered since January this year with 600 000 jobs created in the sector alone.
In an interview Minister Nyoni said SMEs have become a critical economic pillar in Zimbabwe, employing hundreds of thousands of people at a time when big corporates are limping in the face of a myriad of challenges in a harsh economic environment.
“Since January this year we went around with Zimra to register SMEs from being informal traders to formal traders. We registered more than 200 000 players and this meant 600 000 jobs were created and no other sector has done that,” said Minister Nyoni.
“They (SMEs) play a very crucial role in the economy and they are the economy themselves.”
The minister made reference to a recent statement by the Zimbabwe Revenue Authority (Zimra) that SMEs were contributing 20 percent of tax collections and 70 percent of the Gross Domestic Product (GDP) in the country.
Studies have also shown that SMEs were fast becoming key drivers of domestic growth and job creation in the country and across the globe. As such, the Buy Zimbabwe Campaign has called on all stakeholders to increase support to nurture small business as part of measures to grow the revenue base for the country.
Buy Zimbabwe chief executive officer Mr Munyaradzi Hwengwere said building a solid tax base lies in enhancing economic inclusivity and capacity on domestic players.
“The thing is very simple, you can only build a tax base on the capacity of a local industry that is functioning and taking care of small businesses. A functioning industry and recognition of small businesses would gainfully create wealth in the country,” he said.
Mr Hwengwere said if local industries, especially small businesses, were nurtured appropriately, more businesses will pay tax and that would assist the Government in financing more capital projects.
He said it was important for consumers to buy local products so as to assist viability of domestic companies.
“Consumers should value locally produced products and make sure that the market grows. This creates good revenue in the country as consumers will be buying and spending their incomes in their own economy,” said Mr Hwengwere.
Finance and Economic Development Minister Patrick Chinamasa always stresses the need for improved export oriented production to increase foreign exchange and curb imports. Last year, Zimra missed its revenue collection target by four percent to $3.4 billion, falling below the targeted $3.6 billion.
The tax collector has blamed reduced revenues on the general slow performance in the economy and high levels of non-compliance, smuggling and corruption.