Wednesday, April 22, 2009

Speech by H.H the Vice President,Lt.Gen. Mompati S. Merafhe, MP, at the Official opening of the Botswana S.M.M.E Conference and Fair

source: Republic of Botswana (22/4/09): TAUTONA TIMES no 11 of 2009
The Weekly Electronic Press Circular of the Office of the President
Democracy, Development, Dignity and Discipline


[Salutations]…Ladies and Gentlemen

1. I am very pleased to have been invited to officially open this historic Small, Medium and Micro Enterprises (SMME) Conference and Fair. This occasion is important for two main reasons. One of these is that this SMME Conference and Fair provides a platform for the robust exchange of ideas and experiences in the development of Small, Medium and Micro Enterprises (SMMEs).

2. The other reason is that it provides an opportunity for SMMEs from Botswana and the Southern African region to show-case their products and services. This conference and fair is historic because it is the first time in Botswana’s economic development efforts that such a rich, colossal, composite and multi-faceted event of this magnitude has been conceived, designed and hosted with the SMMEs in mind.

3. Director of Ceremonies, Ladies and Gentlemen, I am delighted that LEA has embarked on such a milestone as to host this SMME Conference and Fair, whose theme is; Capacity Building for SMME Promotion Agencies In the SADC Region”. This conference and fair is intended to bring together key SMME development and support institutions within the SADC Region to develop networks of solution-oriented relations, thus building capacity for regional SMME sector development and support.

4. Among the other objectives of this Conference and Fair are:

* To showcase SMME concepts, products and services for marketing and market penetration purposes;

* To recognise and reward achievement among SMMEs;

* To provide a forum for stakeholders to discuss a common theme, share best practices and develop relevant solutions for capacity building.

5. Director of Ceremonies, this Conference and Fair has several components. Firstly, there is the Conference, which will see SMME professionals presenting papers on various issues related to the main theme. Secondly, there will be the Exhibition showcasing SMME products and services mainly from Botswana and others from the Region. Thirdly, there will be the SMME workshops, which are designed to provide information and knowledge that could be of immediate use to SMMEs. All these will take place concurrently.

6. In addition to these three main components, there will be other activities that will enrich the participants’ experiences. I am sure that the participants have been provided with information about these other activities. I am informed for instance that there will be Excursions to the actual premises of the exhibiting enterprises, a Buyer/Seller Forum, as well as other facilities like a Network Lounge to enable participants to optimise networking opportunities. Last but not least, there will be functions including the Welcome Cocktail Function, the SMME Networking Breakfast, as well as the Formal Awards Dinner.

7. Director, of Ceremonies, allow me to commend the Local Enterprise Authority (LEA), for this bold, ambitious and timely initiative. I can think of many reasons why this event is timely.

8. The current global financial and economic crisis provides a scenario that forces us to take yet another closer look at small businesses. The crisis has led to economic activity experiencing progressive decline at a global level.

9. It is now common knowledge that developed countries are going through the worst recession in the sixty years since the end of World War II. Consumer spending in these important markets has dramatically declined. Households there have been plagued with the curse of shrinking values of properties as well as decline in the values of their financial investments.

10. Inevitably, Botswana has also suffered due to a decline in demand for its major export commodity, namely diamonds. While the impact on Botswana exports will be broad-based, implications for the diamond sector warrant special mention.

11. For the first time since Botswana started mining diamonds, three mines which closed for the 2008 Christmas holidays had to remain practically shut until this very month of April. Two other mines are to remain shut for the whole of this year. While these are part of austerity measures to save costs, they will however, have devastating consequences on direct and indirect employment and on the SMMEs that depend on servicing the mines and their employees.

12. Director of Ceremonies, other ramifications for Botswana have translated into the Standard and Poor (S&P) credit rating agency revising Botswana’s credit outlook from stable to negative citing as a reason “rapidly deteriorating public finances”. According to the Agency’s February 2009 Report, a decline in gem prices has significantly undermined Botswana’s economic growth prospects and external balances. The same S & P Report continued and I quote: “The outlook revision reflects our view that economic policy challenges for Botswana are rising because of the severe contraction of the country’s key commodity markets, which had spurred many years of strong economic growth, abundant fiscal revenues and asset accumulation”.

13. It is big business that drives the diamond sector in Botswana and indeed globally. It makes sense, therefore, to examine what alternatives exist in the small business sector.

14. Director of ceremonies, it was in the United States where the current global economic woes and financial turmoil first manifested themselves. It is also in that economy, where we can glean interesting lessons provided by the SMMEs. In the United States, small business employs the majority of private sector workers. In a two year period during the 1990s, businesses with five or fewer employees created more than a million net new jobs. In the year 2005, businesses with fewer than 10 employees accounted for 70% of the private sector employees.

15. Small businesses there provide 55% of all innovations, and about fourteen times the number of patents per employee than large patenting companies. Bill Gates started Microsoft at home, as a small business. Stephen Jobs of Macintosh Computer, under the Apple label, also started in a garage. Both men have since gone on to completely transform the business world and human interactions, and are now global icons. I therefore challenge our SMMEs to take inspiration from these live examples of success stories and do their best to turn any hurdles and challenges experienced into opportunities.

16. Director of Ceremonies, Our Government has long declared that the private sector is the engine of economic growth. And we have over the years worked hard to create a conducive environment for business to thrive and create wealth.

17. Some of our major efforts in recent years have been focussed on removing administrative and regulatory bottlenecks that impede performance of the private sector. An outcome of these efforts has been considerable improvement in Botswana’s competiveness ranking in the global arena.

18. This steady progress has been recognised and confirmed by, among others, the 2009 World Bank’s “Doing Business” Report which has ranked Botswana as one of the top ten global business regulations reformers and one of the only three in Africa, the others being Burkina Faso and Senegal.

19. We have learnt to appreciate the critical role that SMMEs can play in our economic development. It is for this reason that my Government established the Local Enterprise Authority (LEA) whose mandate is to facilitate and promote entrepreneurship and enterprise development within the entire SMME sector in the country. We will say that LEA is successfully delivering on this pivotal transformation role when the public and all stakeholders, including SMMEs themselves, experience a significant and positive trajectory in the accomplishment of, among others, the following:

• the promotion of citizen entrepreneurship, and development of a competitive SMME community;
• the diversification of the Botswana economy, away from dependence on diamonds;
• the creation of sustainable employment opportunities.

20. Ladies and Gentlemen, to improve on the chances of these and other key result areas in its mandate being delivered, LEA has adopted a niche approach focusing on Agriculture, Tourism, Manufacturing and Services. In the past two years of its existence, LEA has successfully: assisted more than 6100 enterprises through its various products and service provisions of which 3298 have received training on different business and technical courses; and submitted 435 business plans for funding to the value of P257 million of which 165 have been approved at a value of P63 million whilst 194, valued at P138 million are under consideration.

21. Ladies and Gentlemen, this Conference and Fair could not have been held at a more opportune time. It comes soon after the establishment of the SADC Free Trade Area in August 2008. Tariffs within the bloc have gone down significantly as 85% of the goods will now be traded duty-free. Whilst this presents an opportunity for SMMEs to expand trade and grow internationally, it also poses a challenge as competition is undoubtedly going to increase. It is therefore imperative that our SMMEs receive maximum exposure and capacity building to enhance their chances of being both domestically and internationally competitive.

22. This SMME Conference and Fair is aimed at providing such exposure and capacity building particularly for our domestic SMMEs. I therefore, urge you all to take full advantage of it.

23. Director of ceremonies, let me in conclusion, wish all delegates, exhibitors, speakers and participants in this Conference and Fair, a fruitful and profitable engagement. It is now my distinct honour and privilege to declare the Botswana 2009 SMME Conference and Fair officially opened. PULA! PULA!

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