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Badilisha Lugha KISWAHILI

Mid-sized enterprises have huge potential for boosting economies

31st July 2011

For obvious reasons, the event to announce the top 100 best performers in the mid-sized private enterprises business category, which took place a few days ago, got less than its fair share of local media publicity.

We say the reasons are well known, although unwarranted, given the fact that most media outlets tend to give prominence to political stories, including those revolving around what the controversial Rostam Aziz calls “gutter politics”.

The project of making a survey on mid-sized companies in order to establish and recognise the first 100 ones leading the pack is a brainchild of Mwananchi Communications Limited, working in partnership with KPGM Tanzania audit firm. We are told the survey attracted participation of more than 200 enterprises, ready to venture and compete.

Why do we say the initiative is important and deserves more media publicity in future than it got this time round? Let it be noted at this juncture that the idea by the private sector operators to find out how mid-sized businesses are performing has come at a time when even the government is preoccupied with a similar mission. In short, the government backed national baseline survey on Small and Medium Enterprises (SMEs) is in the pipeline, and the results are expected to be out soon.

Both surveys have short and long term implications, as well as benefits to the enterprises involved and society stakeholders in this sector. The Ministry of Trade and Industries conservatively estimates that there are more than 2 million SMEs in the country.

There is no doubt that the baseline survey results are likely to establish that the number of SMEs in the land is significant, and provide livelihood to a good number of Tanzanians as well as offering a wide range of services to other society members. Given the alarming rate of unemployment at home and elsewhere, any activities contributing to the alleviation of this social problem ought to be taken seriously.

Economic observers rightly note that most foreign commodities dumped in the local market, both genuine and counterfeit ones, are produced by SMEs in Asia, China and other Far East countries. The lesson here is that SMEs need not be taken for granted.

If they can boost the economy in other places, why can’t their potential be exploited here? Surely, the inflow of foreign commodities which do not require sophisticated technology to manufacture can only be curtailed if there is an alternative option.

Secondly, it is rightly envisaged that Tanzanians can make inroads into the East African regional trade by identifying commodities which can be produced at a comparative competitive advantage by mid-sized enterprises and strategically exploit the potential inherent in this big market, destined to increase when South Sudan gets on board. The Mwananchi/KPMG survey has shown that some of the winners are good enough to compete regionally.

It is little wonder then that some of the winning enterprises have categorically stated that what they have achieved is a big morale booster, and a source of more confidence. They now feel the sky is the limit and encouraged to commit themselves to more ambitious targets.

Given the fact that some Tanzanians, by nurture not by nature, have been victims of uncalled for inferiority complex where competing with other East Africans in many aspects is concerned, any initiative which can positively change this mentality should be warmly embraced.

Experts in the dynamics of underdeveloped economies will also tell you that a vibrant SMEs sector serves as a cornerstone for building a future industrial base in the countries concerned.

For societies which are neither technologically advanced nor financially strong, entertaining the idea that their economic advancement can begin with basing on heavy industries may easily amount to chasing a mirage, experts further contend.

It is also observed that the agricultural sector in the developing world, which is the backbone of the economy in most of these marginalised countries, is destined to gain from this approach. The possibility of exporting processed products, thanks to making use of SMEs, is not farfetched.

Let us hope that our economic planners will make use of some of the vital information gained from the survey under discussion and use it to, among other things, empower the SMEs in our midst for the good a wider society.

Henry Muhanika is a Media Consultant

[email protected]

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