Micro, Small and Medium Enterprises (MSMEs) cut across all sectors of Zambia’s economy, provide one of the most prolific sources of employment, wealth creation and are a breeding ground for industries.
The development of MSMEs is viewed as one of the sustainable ways of reducing the levels of poverty and improving the quality of life of households through wealth and job creation. The contribution of MSMEs to economic growth and sustainable development is now widely acknowledged. MSMEs are believed to deepen the manufacturing sector, foster competitiveness and help in achieving a more equitable distribution of the benefits of economic growth, thereby helping in alleviating some of the problems associated with uneven income distribution. MSMEs achieve this by generating more employment for limited capital investment, acting as a ‘seedbed’ for the development of entrepreneurial talent, playing and supplying the lower income groups with inexpensive consumer goods and services. MSME also act as a buffer in times of economic recession.
Zambia recognized the need to diversify her economy and reduce over-dependency on mining exports. The preferred strategy was production of Non Traditional Export (NTE) products and creation of MSMEs. This approach encouraged firms to produce for the domestic market. However, the capacity to grow and export was still very limited.
Through an Act of Parliament, Government established the Small Industries Development Organisation (SIDO) to promote MSME sector. SIDO was established to cater for financing needs of small-scale companies as defined in the SID Act. In 1996, SIDO was transformed into Small Enterprises Development Board (SEDB) through the Small Enterprise Development (SED) Act of 1996 and, in 2006 it was amalgamated into the Zambia Development Agency (ZDA) Act No. 11 of 2006 as an MSE Division.
However, in the absence of an MSME Policy, development of the sector and coordination of development interventions has remained a major challenge to this country. It was anticipated that the challenges facing the MSME sector would be resolved through strengthening of the capacity of MSE Division of the ZDA, establishment of an independent National Council for Micro, Small and Medium Enterprise Development and the implementation of the provisions of the MSME Policy.
This Policy provides for the active support and participation of all key stakeholders in MSME development. The hallmark of this Policy is partnership and an enabling environment. It expires in 2019 and is under review. Kindly download below and give feedback on way forward.