Namibia’s economic future depends on MSMEs

In 2017, United Nations General Assembly designated 27 June as the day the crucial role played by micro, small and medium enterprises (MSMEs) in an economy should be recognised.

The UN also designated 21 August as World Entrepreneurs’ Day to recognise the importance of entrepreneurs as wealth and job creators.

Many believe the informal sector, and more broadly MSMEs, have long been neglected, with their important economic contributions somewhat overlooked; they should be acknowledged throughout the year, not just on two days.

Does the sector have enough recognition in Namibia? And what is the MSME sector’s future in this country?

Let us take a closer look at the sector’s role and significance.

The entrepreneurial journey for most will begin with identifying a need in their local community, and acquiring resources, often with the assistance of the three Fs (family, friends, and fools), to fulfil or satisfy that need.

Emerging entrepreneurs take risks by opening a business in the hopes of success, but most soon discover that pursuing business is a learning experience.

In fact, novice entrepreneurs learn the hard way that an unwillingness or inability to work hard and smart will result in failure.

Namibia’s business environment is rather unfriendly at times, and doesn’t always allow enterprises in general, and MSMEs specifically, to thrive.

Despite this, in Namibia the absence of MSMEs operating long hours every day of the week to service customers would be catastrophic. Owner-managed micro- and small businesses provide much-needed goods, essential daily needs and services in townships of cities and to local communities in towns, villages, and rural settlements nationwide.

Often, the wealth created by a small home-based firm supplements the family’s income, but for most Namibians who own a small business, it is their only source of income.

Early stage entrepreneurs have no alternative but to be diligent and focused from day one to ensure their business ventures succeed.

Measured by job creation, this sector is undoubtedly crucial: in Namibia, seven out of every 10 income-paying jobs are created by MSMEs.

Despite the fact that foreign direct investment has a positive impact on Namibia’s economic well-being, it is important to acknowledge that our long-term economic well-being relies not only on the MSME sector’s wealth and job creation, but also on a combination of crucial factors.

Conglomerates did appear overnight as fully-fledged corporate firms with multiple branches and numerous business divisions.
They started where many others do: as small proprietor-owned enterprises.

This is another compelling reason why Namibia must develop its MSMEs; the large enterprises of tomorrow will be nurtured in this sector.

Most entrepreneurs begin their journey as a micro enterprise or home-based business operating in the informal sector and over the course of a period of time, they move to the formal sector grow and become large enterprises.

For many Namibians, a job with a small local enterprise provides their first paid work experience and all too often this and other developmental roles of Namibia’s MSME sector go unrecognised.

Namibia’s MSME sector has been the nation’s entrepreneurship and enterprise development incubator and must be supported to continue doing so.

• – Danny Meyer is reachable at danny@smecompete.com