“SMEs are still prime but not yet protected” – Experts say.
Small and Medium sized enterprises (SMEs) have been affected by unfair taxation and insubordination from larger firms, experts have noted. However, with all the taint and maim the market has continuously given them, they still hold the top position in the contribution of the nation’s Gross Domestic Product. More so, fear and lack benevolence from the stakeholders in the economy during this Covid-19 period has seen many SMEs closing.
- Why MSMEs are still winning in the Kenyan Economy
- Mombasa MSMEs on Fire as Kongowea Burns
- Eid ul Adha – Mombasa Business
KAM Boot camp
The Kenya Association of Manufacturers organized an interactive boot camp between business leaders and economic experts on Wednesday (21.7.2021) at a Nairobi city hotel with the aim of championing SME production in the country.
The boot camp which comes only a few days after the former Prime Minister Raila Odinga aroused a heated conversation regarding the empowerment of young entrepreneurs has again elicited some engaging interactions relating to the SMEs.
According to some of the experts, the Kenyan economy has shrunk by the current regulations that are being advocated by the government on the economic recovery pathway. Which has seen SMEs suffer since they provide the biggest margin in the country’s GDP.
The principal officer Buyer-Power, competition authority of Kenya Mr. Arnold Okang described an efficient market with consideration of the Kenyan atmosphere to be a market where there are no barriers from other players in the economy.
“These contacts end up fixing prices and often affect the economic power of SMEs. Players in the economy need to communicate,” noted Okang.
Strength of SMEs
Despite the economic challenges, SMEs in the country have had to enjoy a huge benefit from the government and different external financers such as the World Bank.
“We all want to pay taxes, but that’s a delicate matter as the government for the middle ground. The government reduced the tax rate during the peak of the Covid period last year. While some were reversed we still maintained the ones for the informal sectors, the turnover taxes, it went down from 3% to 1% and is still like that,” said Ms. Lena Olum who is the Chief Manager Policy and tax advisory in the KRA.
According to the Kenya national chamber of commerce and industry (KNCCI) the Kenya Vision 2030, the long-term development blueprint that seeks to transform Kenya into a newly industrializing, high middle-income country, recognizes the key role of small and medium-sized enterprises (SMEs) in attaining its goals. Similarly, SMEs are considered as the ‘bedrock’ for manufacturing and have been identified as central enablers towards realizing the ‘Big Four’ transformational agenda under the manufacturing pillar.
At the international level, SMEs are considered critical in achieving the United Nations 2030 Agenda on Sustainable Development and its Goals – especially Goal 1 (end poverty in all its forms everywhere), Goal 8 (promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all) and Goal 9 (build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation).
At the regional and continental levels, SMEs will play an important role in increasing intraregional and interregional trade as envisaged in the regional economic blocs, especially the recently launched African Continental Free Trade Area.
KNCCI also portrays Kenyan economy is flourishing: growing 5.9% in 2018, compared to 4.9% the previous year. With its growing population, strong educational system, improved business confidence, vibrant private sector and innovative financial sector, the country has the potential to expand even more. Macroeconomic and governance reforms in the past decade have driven this strong economic performance. But for this growth to be inclusive, it must reach all parts of the country.
Do you have a groundbreaking story you would like us to publish? Please reach us through our email news TIPS to email@example.com or WhatsApp +254712410460. You can also subscribe to get the latest news article on this www.msamag.com