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Use exhibitions for business, SMEs told

7th December 2012
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Gregory Teu

The government has urged local entrepreneurs to use various exhibitions organised countrywide to expand their businesses and market base.

This was said here yesterday by the Deputy Minister for Industry and Trade Gregory Teu, when opening the 10th SME exhibition for the Lake Zone.

The weeklong exhibitions which are being held at the Nyamagana Stadium have been organised by the Small Industries Development Organisation (SIDO).

He said there is a need for them to participate fully in various economic activities including exhibitions in order to increase their contribution to Growth Domestic Product (GDP)
At the moment he said the contribution of Small and Medium enterprise (SME) to the GDP is 27 per cent.

He said the government appreciates the contribution of the small scale entrepreneurs in the country’s economy and called on them to improve their products in order to penetrate foreign markets. Teu said five million people, which is 23 per cent of the total labour force in the country, are employed in the SMEs.

He assured the entrepreneurs of the government’s full support, adding that the government will continue to nurture them and create further conducive environment for them to operate.

SIDO Director Mike Laiser appealed to councils in the country to allocate areas for small scale entrepreneurs to operate.
Through its various programmes, he said, SIDO would continue to work with entrepreneurs in their endeavour to flourish and contribute more to the country’s economy.

A total of 300 entrepreneurs from Kenya, Uganda and the host Tanzania are taking part in the exhibition.
According to the Informal Sector Survey of done few years ago  micro enterprises operating in the informal sector alone consisted of more than 1.7 million businesses engaging about 3 million persons, that was, about 20 percent of the Tanzanian labour force.

Though data on the SME sector are rather sketchy and unreliable, it is reflected already in the above data that SME sector plays a crucial role in the economy.

Since SMEs tend to be labour-intensive, they create employment at relatively low levels of investment per job created.

At present, unemployment is a significant problem that Tanzania has to deal with. Estimates show that there are about 700,000 new entrants into the labour force every year. About 500,000 of these are school leavers with few marketable skills.

The public sector employs only about 40,000 of the new entrants into the labour market, leaving about 660,000 to join the unemployed or the underemployed reserve. Most of these persons end up in the SME sector, and especially in the informal sector.

Experts say given that situation and the fact that Tanzania is characterised by low rate of capital formation, SMEs are the best option to address this problem.

SMEs tend to be more effective in the utilisation of local resources using simple and affordable technology.

SMEs play a fundamental role in utilising and adding value to local resources. In addition, development of SMEs facilitates distribution of economic activities within the economy and thus fosters equitable income distribution.

However on other side SMEs have been urged to adopt the concept of franchise in business so that they could easily exploit Tanzania’s untapped potentials with the aid of firms from outside the country.

SOURCE: THE GUARDIAN