STATEMENT BY THE RT HON PRIME MINISTER
MR. AMBROSE MANDVULO DLAMINI
AT THE 25TH MEETING OF THE INTERGOVERNMENTAL COMMITTEE OF SENIOR OFFICIALS AND EXPERTS (ICSOE) OF
SOUTHERN AFRICA
ROYAL SWAZI SPA, EZULWINI
TUESDAY 10 SEPTEMBER 2019
Honourable Ministers
Members of the Diplomatic Corps
Executive Secretary of the United Nations Economic Commission for Africa (UNECA), Dr Vera Songwe;
SADC Executive Secretary, Dr Stergomena Lawrence Tax;
Permanent Secretaries and Senior Government Officials
Representatives of the African Union, SADC, and COMESA;
United Nations Resident Coordinator in Eswatini, Ms Nathalie Ndongo-Seh;
Representatives of United Nations Agencies in Southern Africa;
Representatives of OXFAM and other International and Non-Governmental Organizations;
Representatives of Private Sector, Civil Society Organizations, Academia and Research Institutions;
Members of the media;
Distinguished Ladies and Gentlemen
I’m honoured to be with you today on this 25th session of the Intergovernmental Committee of Senior Officials and Experts of Southern Africa. On behalf of His Majesty’s Government, I would like to extend a warm welcome to all our distinguished visitors and guests.
May I commend the United Nations Economic Commission for Africa for accepting our offer to host this meeting themed, ‘Strategies and policies for the integration of Micro, Small and Medium Scale Enterprises (MSMEs) in the industrialization process in Southern Africa.’ This theme highlights our shared interest in developing Micro, Small and Medium-sized Enterprises (MSMEs), and the crucial need for our countries to accelerate industrialization and structural transformation processes.
MSMEs are undeniably the heartbeat of many economies across the globe, especially in rapidly developing countries. They are a key engine of growth and an important source of job creation and innovation. They are the foundation for private sector growth and expansion. Their potential to promote domestic-led growth in new and existing industries and to strengthen the resilience of the economy in a competitive and challenging environment is beyond any doubt. Evidence shows that they not only promote industrial development but accelerate the achievement of wider socio-economic objectives. Many large enterprises commence their life cycle as start-ups, before scaling up into market leaders.
MSMEs are widely recognised as cornerstones for economic development with the potential to significantly accelerate industrialisation and high value addition processes provided that their entrepreneurial spirit is nurtured. Clearly, this is the reason why Eswatini and many governments and organizations are focussing on supporting their growth. This support comes through targeted schemes and resources and the facilitation of market access, helping them to develop and adopt new technologies and innovations.
We, in Eswatini, appreciate the strategic importance of the MSME sector to the sustainable economic development of our Nation. This is duly reflected in Government’s Vision 2022 – to position the country in the top 10% of the medium human development group of countries. Accordingly, we have developed a National Development Strategy (NDS) and a Strategic Roadmap that emphasizes the power of the sector to deliver broad-based and inclusive economic growth.
The MSME sector has a major role to play towards fulfilling the objectives of our Strategic Roadmap mainly in spurring economic growth, job creation and poverty alleviation. Currently, the MSME landscape in the country is highly skewed towards enterprises with low value addition. Our MSMEs operate predominantly in the wholesale and agricultural sectors, with about 40 per cent in the wholesale sector and 23 per cent in the agriculture sector. Only around 13 per cent operate in the manufacturing sector.
It is for this reason that we are implementing far reaching reforms to reverse this distribution pattern. This will help to significantly increase the share of high value firms. The current distribution of firms also suggests the crucial need to strengthen inter-sectoral linkages that will enable MSMEs to join the various value chains and contribute effectively to industrialisation and economic transformation processes, regardless of their primary sector of activity.
His Majesty’s Government, through the Ministry of Commerce, Industry and Trade (MCIT) recently conducted a review of our MSME National Policy. This strategic decision encapsulates our desire to trigger structural shifts towards an entrepreneurial economy. The review process was driven by our vision of making MSMEs competitive and of ensuring that the sector becomes the backbone of our economy.
The primary objective of the revised MSME National Policy is to create a modern, comprehensive, targeted and coherent framework that will create a highly profitable entrepreneurial sector, characterised by innovative, competitive and sustainable businesses, supported by an enabling institutional and regulatory environment. I believe that this new Policy framework will help to infuse resilience and productivity to the MSME sector through the emergence of innovative and globally competitive firms for value addition, job creation and sustainable economic growth.
Distinguished Guests, ladies and gentlemen, we are gathered here today because of our shared and common interest of enhancing socio-economic development in our region and that of the continent at large. We all recognise the need to industrialize and transform our economies through integration. This we cannot achieve without seeking effective ways to involve and empower our MSMEs.
Of course, we must capitalize on our achievements in the region. That also means we must assess the state and progress of our individual strategies and policies. Without any doubt, this is a gradual and continuous process. We need to share our experiences as well as new developments and prospects. You are well aware of the enormous potential and immense opportunities that are available in our region.
It is known to you that some of the major constraints that impede MSMEs’ contribution to industrial development, require a concerted and cooperative approach. These issues and challenges include, low penetration to regional and global markets, inability of MSMEs to leverage regional value chains, skills - including digital and management skills, and financial and infrastructure constraints, to mention just a few. Digital skills are of growing importance as an increasing number of activities and transactions along the value chains are digitized, especially with the advent of the fourth industrial revolution.
As you know, access to financing is one of the major constraints to MSME growth.
Generally, limited access to credit prevents firms, especially micro-enterprises from capitalising on economic benefits and opportunities, including higher productivity, the opportunity to upgrade to higher value-added production and greater demand for products.
Here in Eswatini, one of the mechanisms that we have introduced to ease access to finance to MSMEs is the Small-Scale Enterprise Loan Guarantee Scheme. Through this Scheme, businesses are able to obtain a guarantee for a loan up to a certain amount, with government providing a guarantee of about 95 per cent of the loan. It is not perfect, but we are working to improve it to ensure it is more impactful and effective. In fact, easing small business access to finance by using alternative and innovative financing schemes is part of our Micro Finance Policy, Financial Sector Development Implementation Plan and National Financial Inclusion Strategy.
Excellencies, Ladies and Gentlemen, as I conclude let me extend to you my best wishes for a successful and fruitful meeting. I look forward to hearing practical recommendations that can help us attain the goal of increased and effective participation by MSMEs in our efforts to spur industrialization and achieve sustainable economic growth and prosperity in our region.
It now gives me pleasure, on behalf of His Majesty’s Government, to declare this meeting officially open.
Thank you.