Common Market for East and Southern Africa (Comesa) Business Council (CBC) has bemoaned low active participation of the small and medium enterprises (SMEs) and businesses in national and regional value chains which it says hinders industrialisation and industry policy.
Speaking during the opening of the Comesa Business Council (CBC) training workshop on local sourcing for partnerships in Blantyre on Tuesday, CBC policy advocacy officer Kudzai Madzivanyika said value chains offer opportunities to transform economies by developing and expanding new activities and building dynamic and competitive manufacturing, agriculture and service sectors.
Madzivanyika said there is a positive correlation between participation in value chains and economic and industrial growth rates.
“Africa captures a small share of global value-added trade, and intra-regional trade still remains low on average around 10 percent of total trade. The shallowness of regional supply chains can be gauged by the fact that Africa sources 88 percent of its imported inputs from outside the region, as it has specialised mainly in exporting commodities to world market,” she said.
The expert said in addition to infrastructural constraints, market access, standards and quality issues and structural constraints such as participation is dented by the fragmentation of production cycles particularly in the hands of a large number of fragmented SMEs.
“This should be viewed within the background that Africa at large and Comesa in particular, is pre-dominantly Agricultural based, with 80 percent of the employment base made up of SMEs.
“The same can be said about Malawi. It is important that effective strategies are put in place to strengthen the participation of SMEs in supply and value chains at national, regional and global level”, she explained.
Malawi Chambers of Confederation of Commerce and Industry (MCCCI) chief operating officer Chimwemwe Luhanga said the chamber cannot deal with all the challenges facing SMEs, let alone those operating in the tourism sector, as such it will target two of the most teething challenges recognised as obstacles to SME expansion and growth; food safety management and markets.
The Investment Climate Facility for Africa, USAID-IPAA, in collaboration with the public and private sector bodies, are supporting the project which is being implemented in six countries namely Ethiopia, Kenya, Zambia, Rwanda, Uganda and Malawi.