SME order faces stern test

Trade experts, economists and small and medium enterprises (SMEs) have said the SME order will work only if government ministries, departments and agencies (MDAs) become flexible and patriotic enough to embrace change.

The sentiments from the stakeholders comes a week after President Lazarus Chakwera directed in his national address that all MDAs should begin to adhere to the SME order by buying goods and services produced by local SMEs.

The President said Malawi can be built by empowering local SMEs to do business with government as opposed to leaving a few established big businesses to monopolise the procurement and supply of goods and services to government.

The SME Order, gazetted on December 14 last year, provides a preferential list of basic government businesses to benefit local SMEs and encourages more small businesses operating informally to formalise their businesses and help to broaden the country’s tax base.

Chamber for Small and Medium Businesses Association executive secretary James Chiutsi while describing the directive as a win for SMEs, who have been failing to supply goods and services to the government, said the order has gaps.

He mentioned issues of SMEs capacity inadequacies such as capital and quality issues among others which require serious government support to rectify if the Order was to reap economic benefits.

He said: “We all know that in the past SMEs have remained one or two years without being paid after supplying goods and services to government, we hope the Presidential directive will address this issue.

“In terms of capital requirements, we believe the government through the National Economic Empowerment Fund (Neef) Malawi Agricultural Investment and Industrial Corporation (Maiic) among others will make efforts to provide cheap capital”.

On addressing quality and capacity issues, Chiutsi banked on the Malawi Bureau of Standards and Small and Medium Enterprises Development Institute to address the gaps through capacity building.

Minister of Trade Sosten Gwengwe has since allayed all the fears from stakeholders, saying all government agencies will pull efforts together to make the order work.

“The Ministry of Finance has prioritised clearance of previous arrears and prompt payments to avoid building new arrears. Businesses need liquidity and Treasury is handling this head on,” he said.