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Africa SMME Conference

Africa SMME Conference. 23 October 2008 Cape Town Presenter: Mrs Wawa Damane. The Role of Government in Small Enterprise Development. Lessons from three developing countries. Contents. The role of government in small enterprise development Comparative perspectives of 3 countries Brazil

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Africa SMME Conference

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  1. Africa SMME Conference 23 October 2008 Cape Town Presenter: Mrs Wawa Damane

  2. The Role of Government in Small Enterprise Development Lessons from three developing countries

  3. Contents • The role of government in small enterprise development • Comparative perspectives of 3 countries • Brazil • India • South Africa • Key lessons • Conclusion

  4. The Role of Government • Two schools of thought • Minimum involvement of government in service delivery • Greater involvement of government in service delivery • Creating an enabling environment • Policies must be clear and unambiguous • Implementing institutions well resourced • Enabling regulatory environment • Efficient and reliable administration

  5. Case Study: Brazil • Small businesses comprise 98% of all enterprises • The population is ±170 million people • Number of small enterprises is 4.5million which, contribute 21% of GDP (US$ 7billion) • Recently developed a comprehensive legislation for small businesses • Key Institutions: Sebrae; CACB • Business development services • Innovation and technology promotion • Finance-Risk capital and micro finance • Incubation

  6. Case Study: India • Population is over 1 billion people • Has a ministry for small scale industries • Small businesses comprise ± 90% of all enterprises • Recently did a comprehensive review of legislation for small businesses • Key Institutions: National Small Industries Corporation, SIDBI, CII • Financing • Industrial extension services • Technology support • Technical Training

  7. Case Study: South Africa • Small businesses comprise 95% of all enterprises • The population is ± 44 million people • Number of small enterprises is ± 2.8 million • Current legislation developed in 1996 with some amendments in 2001 and 2004 • Key institutions • SEDA (Business development services) • KHULA (Finance) • SAMAF (Micro Finance) • IDC (Financing) • Provincial development corporations

  8. Key Lessons • Clarity of vision and policy supported by good planning and administration is essential for success • A champion for government is needed to drive the vision • Partnership between government and small business associations provide more sustainable interventions e.g. 400 industrial clusters in India, 2570 focus groups in Brazil comprising of 33000 SMMES, Mozambique 16 and South Africa 26 focus groups • Funding models for institutions should provide for long term intervention with sustainability as a goal e.g. 0,3% of pay roll contribution by SMMES is used to fund SEBRAE in Brazil

  9. Conclusion • Countries where government has wisely intervened have shown results over time • Emerging examples of public private partnerships enable government to reach more SMMEs in a cost effective manner.

  10. Thank You!

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