'Zim worst country for SMEs'

HARARE - Zimbabwe has been ranked as the least country in Africa with a favourable environment for Small to Medium Scale Enterprises (SMEs) to start and operate a business, a new study has revealed.

The latest survey by a South African-based research institution — ThinkRoom Consulting — in conjunction with Microsoft revealed that the variables in Zimbabwe did not favour start-ups despite the economy increasingly getting informal.

According to the report, Zimbabwe was ranked number last out of 12 countries after the country scored a 25 percent in terms of conduciveness of starting and conducting a business while Mauritius came first having scored 79 percent and South Africa came second after scoring 78 percent.

The study interrogated several variables including political stability, corruption, GDP trajectory, population below poverty datum line, literacy rate, overall ease of doing business, ease of starting a business and social hostilities.

Botswana was ranked third after the country scored 65 percent while Namibia had 62 percent on fourth place with Rwanda coming fifth with 59 percent followed by Ghana which had 57 percent.

The other countries surveyed were Zambia which scored 51 percent to land on spot seven; Kenya was on eighth position after scoring 47 percent followed by Nigeria which had 40 percent.

Uganda was on 10th position with 31 percent closely followed by Ethiopia which scored 30 percent then Zimbabwe with an appalling 25 percent.

ThinkRoom noted that the political stability in Zimbabwe was 34,2 percent, while social hostilities stood at 15 percent — which is way below average as the population below the poverty datum line is 72,3 percent.

The think tank also concluded that it takes about 90 days to start a business in Zimbabwe while in Mauritius it takes only six.

The rankings come as the country’s economy is now largely skewed towards the informal sector in the wake of massive job losses and company closures spurred by tight liquidity.

SMEs minister Sithembiso Nyoni recently said there was need to create and maintain an enabling environment to fully exploit SMEs’ untapped potential to achieve goals set in the country’s five-year economic blueprint.

Industry experts say the value of the report lies in the fact that it is a consolidated study that considers a holistic set of macro and micro-environmental factors that are relevant to SMEs and may have a direct or indirect influence on the conduciveness of a particular country to accommodate SME start-ups, as well as their operations.

It considers the macro-environment, SME environment, internet and mobile capacity, in addition to the infrastructure and logistics of each country in the study.

“The ability for SMEs to have access to online infrastructure is vital in the African market. It opens up opportunities for trade and e-commerce, and access to cloud-based software at a fraction of the cost of traditional IT infrastructure,” said Perry Kamel, Microsoft’s Senior Business Development Manager for the SME audience in Africa.

“Our work with Thinkroom and our SME audiences in Africa during Global Entrepreneurship Week has focused on getting businesses started and working online,” Kamel added.

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