botswana private sector development

Private Sector Development Program

A Government of Botswana initiative supported by the European Union and the Centre for the Development of Enterprise and

Business Botswana

Program Implementation Status

Gaborone, Botswana November 2015

European Union Government of Botswana

Overview of the Program

PSDP was developed following the adoption of the Private Sector Development Strategy initiated by Business Botswana

PSDP is a flagship program aiming to stimulate and sustain growth through diversification of the economy

Main focus of the program is “capacity building” of institutions & human resources that support the private sector.

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Program Stakeholders and Respective Contribution

• Key stakeholders Contracting Authority: EU through 10th EDF (2.3 Million) Supervising Agency- Ministry of Trade & Industry (MTI) Executing Agency- CDE ( Euro 500,000 to support the Program Coordinating Unit

Program Monitoring - Business Botswana (BB)

• In-kind support: MTI: Delegated staff on trade and program offices Business Botswana: Delegated staff on internal monitoring and Evaluation

• Fund mobilization: Chanel Corporate Foundation( France): support to Women Entrepreneurship Development

(WED) Technical Barriers to Trade program (TBT): on going discussion on capacity building of

Botswana Bureau of Standard (BOBS)

• Partners: Managers without Borders Senior Experten Services Technical Barriers to Trade (TBT) Program addresses Non-Tariff Barriers (NTBs) Tokafala

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Management Committee (Chaired by the in MTI), members include EU Delegation, NAO, CDE, MTI, Business Botswana and IOs).The MC will meet on a monthly basis for; - Overall policy guidance and support to the program

- Ensure the compliance of the PSDP implementation with the signed Contribution Agreement. - Discuss and approve/endorse planned activities proposed by the coordinating unit

Coordinating Unit

The Team Coordinator will work closely with the Executing Agency.

He will manage and coach the PSDP staff under the following

duties;

Manual of Procedures, Annual Work plan and Budget

Prepare and update the manual of procedures and work plan

including budget to be submitted for approval to EU Delegation,

CDE, and MTI

Propose evaluation committee members (tendering and call for

proposals)

Market Consultation/Tendering

Preparation and submission of market consultation dossier to the

Executing Agency

Elaboration of contract for the successful bidder (service or grant

contracts) to be approved and signed and by Executing Agency

Follow-up on activities of awarded contract

Assistance to the implementation of capacity building activities

Development of database and selection of experts to implement

the program activities

Coordinating all activities to mobilise financial resources in support

of SMMEs

Report monthly to the Executing Agency

Prepare and present on-going activities (technical and financial

reports)

Communication and Visibility

Promotion of PSDP to media, Public and Private sector stakeholders

e.g. Brochures, newsletters and magazine articles

Process payments of expertise and other service suppliers

Keep records of all financial transactions under the program

Monitoring and Evaluation

Assistance the Executing Agency and BOCCIM on the monitoring

and evaluation tools of the program

Executing Agency (CDE) Facilitation/Secretariat

- Administer funds - Coaching the coordinating unit team - Launch call for proposals and market consultation dossier -Approval of evaluation committee members

- Administrative compliance of offers, verification of technical offers and technical grid from evaluators, opening of financial bid and verification whether it fulfills the instructions, information on the successful bidder or unsuccessful tender -Approval of market consultation and tender dossiers - Organizing and information meeting for shortlisted service providers - Approval and signature of successful service provider contracts - Notification to successful bidder and award of contract - Requesting annual EDF funding based on the work plan

Beneficiaries ( Intermediary Organizations)

The IOs will work closely with the

Coordinating Unit in all activities of the

program. Their duties will include the

following;

Implementation of annual work plan and

budget prepared by the coordinating unit to

select pertinent activities

Identification and selection of activities to

be implemented in the program

Implementing activities approved by the

evaluation committee including;

sector studies

value chain and cluster support

training workshops and seminars for

SMMEs and IOs

capacity building for SMMEs (business

competitiveness enhancement,

management and staff upgrading,

communications strategies and

marketing plan, technical and business

planning preparation for mobilizing

investment finance, access to markets,

green energy solutions)

Ministry of Trade and Industry (MTI) Supervision of program Implementation

European Union

Contracting Authority

Business Botswana (internal Monitoring and evaluation)

Monitor the efficiency of PSDP with regards to PSDS

Organizational Structure for PSDP Botswana

N.B: Reporting Collaboration in implementation of activities

PSDP Priority Sectors

• PSDP is assisting SMMEs and CBOs in four priority sectors based on PSDS priorities and outcome of stakeholders consultations

• The sectors have exporting potential in support of economic diversification.

Manufacturing including Agro-industries

Tourism Construction and public works

Information & Communication technology

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Objectives and strategic linkages

The program has a strong link with two strategies: the PSDS and the Economic Diversification Drive Strategy

Result Area 1: Capacitate SMMEs and CBOs and conduct value chain studies

Result Area 2: Enhance the service delivery of Intermediary Organizations (IOs) especially Business Botswana to be the lead private sector voice (Apex body)

Result Area 3: Reduce red tape and access to financing in the business environment

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Organization and PSDP interventions

Results Area 2. Service delivery of IOs & BDSPs

enhanced

Results Area 1. Capacity building and

competitiveness of SMMEs & CBOs including value chains

strengthened

Results Area 3. Business environment for enterprises

improved.

PSDP is structured around 3

interlinked components

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Implementation approach

- Analysis of 8 value chains in agro-industries & tourism sectors

- Sector Support to Construction & Public works & ITC

- Audits of SMMEs & evaluation of IOs (Diagnostic of baseline situation)

- Capacity building need Assessment of beneficiaries in priority sectors

- Development of Market intelligence Information system

- Assessment (Review cost of doing business) - Enhance MTI’s expertise to manage the PSDS - Trade facilitation & access to trade finance - Establishment of a Microfinance policy framework -Assist BITC to implement Export Development program (EDP) & Global Expo to improve investment environment

- Establish Business Botswana as an APEX body of all sector associations

- Build the capacity of SMMEs (group training, individual coaching/mentoring

- Improving networking of IOs and SMMEs.

- Women participation in Economic development (WED program)

Value chain

development

Enabling

environment for

Enterprise

Development

Capacity

building of

SMMEs , CBOs,

IOs & BDSPs

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Implementation phases

• Based on broad stakeholders consultation, implementation is three-phased:

Consultation

Intervention

Preparation

April-Sep 2013 Mobilization of partners and resources

April 14-Dec 16 • Capacity building of

SMMEs & CBOs • Capacity Building of IOs &

TSIs • Collaboration with MTI on

ease of doing business

Oct –March 2014 Framework Studies: • Value chains & sector analysis • Audits of SMEs • Market intelligence • Trade & Finance • Apex body • M&E

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• 7 Value Chains (VC) Completed: • Beef • Dairy • Goat • Poultry • Horticulture • Leather • Piggery

• 1 Tourism VC: ongoing

Completed VC shared with stakeholders

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PSDP Result Area 1: Value Chains

SMME Selection

• Expression of Interest was made in January 2014 resulting in a total of 171 applicants of which 128 met the program criteria

• A technical evaluation was carried by the program stakeholders (BB, CDE, EUD, MFDP, MTI and the PSDP CU) on 5 June 2014 which selected 100 organizations as program beneficiaries: • 70 SMEs • 28 Micro Enterprises • 2 CBO’s

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PSDP Result Area 1: Capacitation of 70 SMMEs and 30 CBOs

Distribution of PSDP Beneficiaries

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1 5 1

49

1 1

2

4 1

2

3

11

1

6

1 1

2

1

2

1

1 1 1 1 Bokaa

Francistown

Gabane

Gaborone

Kachikau

Kang

Kasane

Kazungula

Letlhakane

Lobatse

Mahalapye

Maun

Mmopane

Mogoditshane

Molepolole

Palapye

SMME Audit

• The CU undertook a diagnostic of all SMMEs in order to identify the beneficiary challenges toward their respective strategic, process and support level areas of need.

• With a view of ensuring sustainability and meeting the Result Area 2 objective of capacitating IOs, the PSDP capacitated the following IOs:

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10

3

6

4

13

5

1

3

2

1

6

4 3

BNPC BOCCIM BIH BITC LEA CEDA HATAB HRDC BOBS PEEPA BIDPA CDE-PSDP BDSP

SMME Audit Results

Most companies audited lack expertise or skills in the areas of strategic management and financial literacy both instrumental towards the success of any organization as prioritized below by sector:

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Business Sector Challenge # 1 Challenge #2 Challenge #3

Manufacturing Marketing and Sales Finance Production & Operations

Agro Industry Quality Management Production & Operations Marketing and Sales /Finance

Const. & P.W. Finance Marketing & Sales Strategic Management

ICT Marketing & Sales Finance Strategic Management / HR

Hotel & Tourism Finance Marketing & Sales Strategic Management / HR

SMME Roadmap Methodology A beneficiary roadmap to facilitate access to market, access to finance and increased competitiveness was developed.

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SMME Categorization Due to the differing organizational needs (size and scope) of the 100 beneficiaries, the CU categorized them as follows to ensure their technical assistance caters to their specific needs.

• HiPos: these are organizations with the potential to make significant gains in all pillars of the program irrespective of turnover, staff complement and operational sector - in total there are 30 HiPos. Please refer to annex 3 for a full list.

• SME: any sector independent small medium enterprise with a minimum turnover of 1.5MIL – 5MIL BWP60 in total.

• SMME: any sector independent Micro or Community Based Organization (CBO) with a minimum turnover of 1,499,999 MIL BWP and a staff complement of 1 – 14 people – 28 Micros and 2 CBOs.

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70

30

28

2

100

0 20 40 60 80 100 120

Beneficiary Categorization

Beneficiaries CBO MICRO HiPos SME

PSDP SMME Implementation

To date the PSDP has implemented 1,618,833 Mil Euro in ameliorating 67 of the 100 beneficiary SMMEs towards playing a larger role in the economy of Botswana; with the majority of budget directed to local service providers.

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PSDP SMME Interventions

The above mentioned funds were invested in IO partner collaborative initiatives, where possible with the following list of service providers.

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BB BIH BITC BNPC BTO CEDA HATAB LEA NDB PSDP Standard Charted Bank Tokafala

EDF Training

Diagnostic Audit Training

Diagnostic Audits

Technical Sector

Management

Local Mentors

Energy Management

Construction & Public Works

Technical Barriers to Trade

Occupational Safety & Health

Beef Sector Assistance

Business Management Training

Value Chains

Beef PPD

Tsodilo Initiatives

Upgrading Honey Associations

Global Expo

HiPo Support

SMME Observations and Lessons Learned

• A good 90%+ of the beneficiaries have secured and worked their way through government assistance funds such as the Financial Assistance Plan (FAP), Botswana Development Corporation (BDC) unsecured equity investments / grants, international donor grants and CEDA soft loans.

• Most if not all beneficiaries applied to the program in search of grants and or soft loans; and they continue to request financial assistance despite the clear and consistent message that the Program does not provide funding and or financing.

• Some companies are in serious financial distress such that they need financial bailouts before any operational support.

• Do not realize the full potential of the EDD program.

• There is a total lack of cluster collaboration or enterprise networks - i.e. business clubs.

• There is a general dependency on government tenders

• Some companies believe that an EDD and PPADB certificate should guarantee government business.

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• A schism between business owners and staff was noted because business owners do not have:

• Entrepreneurial spirit

• Any tolerance for risk

• Any innovation

• Requisite business and or staff / HR management skills

• A significant number of beneficiary promoters are not dedicated to their organizations; they do not work for themselves on a fulltime basis.

• Requisite communications with staff - i.e. strategy, performance, market / competitors, etc...

• There is a general dependency on:

• Consultants via the requests for long term / permanent consultancies

• SMME Staff have:

• No loyalty

• No patience in developing their career

• High staff turnover

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• Over time beneficiaries:

• Commitment to the program wanes with the need for extensive follow-ups / reminders from the PSDP Team.

• Some companies do not respond to written or telephone correspondence from consultants

• Do not readily share pertinent company information with the PSDP or consultants. This is due mostly to the fact that PSDP beneficiaries a family owned and are therefore averse to bringing insiders into their business.

• The following was observed of manufacturers:

• SMMES incurred high costs on internationally sourced materials despite being able to source locally.

• Machinery equipment supply and maintenance are a challenge as they are sourced internationally and there is no local technical back up support and or parts.

• Plant layout, material flow and housekeeping are persistently poor.

• Issues of record keeping and costing in most enterprises are evident

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Mid-Term Review Observations and Lessons Learned

•Segment the population of beneficiaries to better serve their needs

•Adapt experts/audit teams to size and complexity • Prepare dissemination of best practices and

success stories

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Objectives

• Establish Business Botswana as an apex body of all sector associations

• Capacity building of BITC

• Capacity building for BOBS on Quality and Certification

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PSDP Result Area 2: Capacity Building and Sensitization of SMMEs, CBOs, IOs and BDSPs

Business Botswana As an Apex Body

• New constitution established and Adopted

• Newly designed, established and adopted financial membership model

• Business Botswana representative capacitated in Europe by the Belgium and the Paris Chamber of Commerce on the following:

• chamber establishment and management

• implementation of association charters • Entrepreneurship services including specific women focused services

• Identified a senior expert to assist with transition of Business Botswana to an apex body.

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Capacity Building of BITC

• BITC Export Development Program: assisted BITC on Export

Development and Promotion and assisted BECI on credit insurance

• BITC sector approach assistance: analyzed the BITC strategic Plan and elaborated an action plan to implement 2 priority sectors (ICT and industrial minerals) with the view to attract potential partners / investors

• Staff missions: • Geneva, Switzerland based International Trade Development training

• Export and Investment Promotion training

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Capacity Building of BOBS

• BOBS ISO 22000 Training: BOBS regulatory section staff were taken through ISO 22000 training on compulsory food standards. An Examination was administered and all participants passed and received certificates.

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Intermediary Organization Observations and Lessons Learned

• Difficulties understanding CDE-PSDP procurement and payment processes:

• preparation

• Implementation

• payment

• Difficulties securing high level management for strategic collaborative meetings

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PSDP Lessons Learned and Observations

Intermediary Organization Observations and Lessons Learned

•Focus on a limited number of core institutions •Ensure that IOs have built-in incentives •Ensure that private sector institutions are duly

represented

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Mid-Term Review Lessons Learned and Observations

Activities

• Capacity building on trade and specific negotiation skills

• Development of the micro finance policy framework

• Develop and implement an innovative trade finance scheme for SMMEs to provide access to finance solutions

• Improve Business Environment

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PSDP Result Area 3: Creating an Enabling Environment for Enterprise Development

Capacity building on trade and specific

negotiation skills Conducted

• Trade in Services Statistics: Reviewed key trade in services principles; data collection; BOP classification

• Trade in Services: Reviewed GATS scheduling; Horizontal Approaches: Domestic Regulation; Competition Policy; E-commerce; Subsidies Safeguard rules, etc.

• Trade in Services in general with focus on tourism and transport

• Competition rules training on how to develop common competition negotiation positions and how to implement cross-border agreements

• Negotiation skills training especially for the private sector and conducting awareness workshops on skills needed in developing negotiation positions

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Micro Finance Policy Framework

• A micro finance policy framework has been developed and submitted (June 2014) to the relevant stakeholders for presentation to the parliament.

• A Micro Finance Act to be developed.

• Terms of reference for recruitment of an expert to assist with the drafting of the Act have been developed and approved.

• During the February 2015 MC meeting, it was recommended that the PSDP not pursue any further action regarding micro finance activities.

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Develop and implement an innovative trade finance scheme for SMMEs to provide access to finance solutions

• Facilitated discussions between European Investment Bank (EIB) and BancABC

• Reviewed Registration and Tax Compliance laws

• Reviewed of Labor Laws and recommend labor productivity improvement strategies

• EIB signed a Euro 25 million loan agreement with Bank ABC to run the finance facility for local SMEs.

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Mid-Term Review Lessons Learned and Observations

•Consider the relevance and effectiveness of the component

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Objective

• Recruitment of a service provider for the design of PSDP Monitoring and Evaluation (M&E) System

• Design and implement PSDP Communication and Visibility Plan

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Component 4: Monitoring & Evaluation and Visibility


• Service provider recruited in June 2014 to develop and maintain the M&E System and portal.

• The Web portal is live and is updated regularly

• Trained Business Botswana staff on the maintenance of the M&E system

• Portal is housed on Business Botswana premises

• Internal M&E evaluation on-going via templates developed by M&E experts.

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Component 4: Program Management and Visibility

Communication and Visibility

• Trained Business Botswana and PSDP partners on leveraging C&V

• Communication and Visibility plan approved.

• PSDP Newsletter produced

• Four (4) press releases of major events completed.

• Radio interview of PSDP team on Gabs FM.

• CNBC Africa interview of two (2) PSDP experts

• 14 PSDP article published in Sunday Standard to date including various program sectorial interventions (construction, tourism, ICT, and manufacturing) and Women Entrepreneurship Development programme.

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Component 4: Program Management and Visibility

Country wide selection of women entrepreneurs in: • Leather (2) • Tourism (5) • Agro – industries (12) • Manufacturing (7) • Textile-Fashion-Design (7) Very passionate and interesting group of individuals forming support structures for each other WED is part of Private Sector Development Programme (PSDP) Botswana

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Women Entrepreneurial Development (WED) supported by Chanel Corporate Foundation

Implementation Progress-Completed Activities (SMME Diagnosis and Grouped Assistance)

Project/Activity Date Status Outputs

SMMEs Diagnosis January 2014-May 2014 30 SMME audits

completed by BITC in

collaboration with selected

staff from other IOs

(BNPC, HATAB,

BOCCIM, BIDPA)

Activity completed with 30 audit

reports including

recommendations per company

Business Management Training

for WED

July 2014-September 2014 30 SMMEs participated in

one week training on

Business management

The training modules

covered; Business

management foundation

skills, supervisory concept

and skills, accounting and

finance, marketing and

sales

The activity has been completed

and report produced. The seminar

largely met the expectations of

the participants as indicated in

the rating by participants (98%)

Business Planning October 2014-November 2014 About 30 SMMES

participated in one week

training on Business

Planning

The training modules

covered; marketing

strategy, risk analysis and

sales forecast, funding

requirements and financial

forecasts

The activity has been completed

and a report with

recommendations for top

performers produced. From the

participants, 10 Business plans

are to be finalised and submitted

to Financial Institutions for

funding.

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Implementation Progress-Completed Activities (Individual Coaching in Agro-Industries)

The below tasks and outputs were produced: • Review of production sequences and equipment, as well as

the finalization of production parameters in order to automate and increase production.

• Testing of new products with the public and potential customers was done to gauge customer response to a product.

• Product costing and break- even analysis was also undertaken in order to understand the current situation and enable beneficiary business owners to work out a pricing strategy based on true figures.

• The companies were also introduced to food safety management

• Energy saving devices in food production were also recommended in order to streamline production processes and maximize energy efficiency.

• With regards crop production, better pest management was introduced to enable more crops being brought to the market.

• Revamping of their website and development of promotional tools for effective marketing.

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Implementation Progress-Completed Activities (Individual Coaching in Tourism)

The below tasks and outputs were produced:

• Change in communication output from traditional to development of online social media tools (trip advisor, booking.com, google maps)

• Communication strategy developed

• Quality check for improving the grading developed

• Action list developed for the companies to implement the recommendations

• Creation of a Facebook company page and twitter profile

• Facilitation of employment by Linkages with University/Vocational Training Institutions 11/3/2016


Turnaround strategy

January 2015-December 2015

BNPC to implement interventions on 30 audited SMMEs

Profiling of the 30 companies and interim report prepared

The work started in January 2015 and the inception report has been submitted. 8 companies have been identified for the Turnaround strategy, while 15 are being for hybrid services including record keeping and costing. Furthermore 7 remaining companies are recommended for stabilisation and consolidation.

Linkage to Finance

April 2015-December2015

Business plans under preparation, to be submitted to financial institutions for funding

10 SMMEs benefiting from the intervention Business plans expected to be submitted to Financial Institutions for funding Cleaning and set up of accounts for SMMEs

Fashion and Design Expert

April 2015-March 2016 The consultant will assist with Product techniques, marketing and sales

7 SMMEs under the textile sector to be assisted for improving their competitiveness The second mission expected in mid November 2015

Jewellery Expert April 2015-March 2016 The consultant will assist with products design and assessment of the profile of potential clients, assistance on marketing (branding and packaging).

Companies still working on the action plan recommended by the consultant. Partnership agreement signed between Oodi Colle of Applied Arts and Technology-OCAAT (Botswana) and BJO Formation (France). The Project will support 2 students and 2 lecturers per year. OCAAT has finalized the selection of 2 students undergoing a 2 weeks training at BJO Formation on Jewelry making.

Implementation Progress-Ongoing Activities

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WED Leather Expert Objectives To provide individual coaching and mentoring to 2 SMMEs in the Leather sector with the view to improve their competitiveness and markets. Service Provider Atelier Du Sartel (France)

January 2015-February 2016

Tasks

Assessment of the

present design and

products hand in hand

with the business

owner (normally they

are designers and

producers at the same

time).

Status Contract extended to February 2016. Awaiting dates of the second mission.

Outputs Companies still working on the action plan recommended by the consultant. Furthermore, a benchmarking mission is expected for Lebang Setso, where the manager will get training from the consultant in Paris. Leather SME factory

WED Training Missions (Leather sector , students exchange in Jewelry sector)

September 2015-December 2015

Tasks a. Benchmarking

Mission for Lebang Setso:

b. Training for 2 students from OCAAT

Outputs -Mission report with recommendations for Lebang Setso produced. -Networks for essential leather contacts in Paris prepared.

Participation at the CHANEL Corporate Foundation seminar - Training on knowledge management - Presentation of Lebang Setso and WED programme status - Networking Skills transfer and field visits to leather workshops - Meeting with Leather manufacturing professionals to acquire skills - Visit to Leather design studios - Visit to leather sampling studios - Visit to Leather design school

Implementation Progress-Ongoing Activities

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Foreseen activities

03/11/2016

• Standardization and certification

of products and services

(Botswana Bureau of

Standards)

• Set up of accounting systems

• Support to WIBA (Botswana

Women in Business

Association)

• Social and business networking

(March 2016)

• Benchmarking missions for

Textile companies

Consultant / Expert Observations and Lessons Learned

• Difficulties securing appropriate consultants

• General lack of local knowledge and or cultural challenges for international consultants

• Lack of sector knowledge and reporting from local experts

• Some reporting does not meet CDE-PSDP expectations and requires improvements

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Coordinating Unit Observations and Lessons Learned

• Burdensome administrative procedures and processes leaving little time for operational issues - assessment of interventions and reports and follow up of actions, etc...

• PSDP strongly collaborated with BB, BITC, BNPC, BTO, HATAB, CEDA, BIH and BIDPA

• Collaborative efforts between the Program, LEA and BEMA is paramount

• Implementation of some of the value chains can be implemented by IOs

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• There is great satisfaction with the PSDP interventions.

• Clear lines of responsibility for implementation. Also implementation must form part of each activity.

• Policy issues should be pushed by BB and there should be more contact with MTI.

• SME Diagnostics by Service Providers:

• Accessibility challenges for SMMEs in remote areas (consider taking advantage of technology).

• Gaps in keeping contact post-intervention

• Time for audits too long

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• SMME Beneficiaries: • Intervention impacted positively on SMMEs (increased revenue, employment

etc.)

• Prospect of investor confidence

• Time spent on interventions too short

• Time taken between audit and intervention too long.

• Some SMMEs thought intervention involved financial assistance and would prefer such assistance in future

• More marketing of PSDP through Radio, Daily News etc.

• Avoid duplication of efforts with projects already being undertaken by contracted Service Providers

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•PSDP beneficiaries have expressed deep gratitude for the interventions that been made do date.

•A number of beneficiaries have seen positive improvements in their business. Some are reporting:

•Increased turnover and profitability

•Employment of more personnel

•While others have gained confidence in running their businesses.

•In addition, entrepreneurs are hopeful that more time be allocated to handholding support towards growth as they expand their operations. They are willing to consider contributing financially to the abovementioned support.

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Focus Areas

•Refocus the activities to increase potential impact:

•SMMEs and Value Chains opportunities

•Business Botswana and BITC must leverage BNPC

sector expertise

•No more Business environment (under the same project)

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Mid-Term Review Recommendations

Improved SMME Support (Continued)

• Ensure adequate support to identified SMMEs to better address their needs:

• TOR for each SMME to be supported further

• Consider charging a cost sharing fee or contribution to local costs to beneficiaries

• Create workshops for beneficiaries leading to business clubs

• Organize sector workshops further to VCs including sector associations or leading to Sector association build up

• Build on promising VC starting with pilot projects

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Governance (Continued)

• Improve PSDP Governance and Management to facilitate project activities:

• Advance Progress report

• Prepare a «yearly» plan (including exit strategy and related activities)

• Consider need for PSDP extension, budget? Executing Agency?

• Improve M&E

• Prepare and plan for CDE closure, meanwhile reduce administrative delays through CDE SA-RFO empowerment

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Exit Strategy (Continued)

• Prepare an EXIT STRATEGY to strengthen potential sustainability and not lose capacity:

• Design and plan the exit strategy in conjunction with identified IOs

• Support IOs Action Plans in this regard

• Continue supporting Business Botswana as the private sector APEX Institution to take over responsibility for: • SMME support through business audit training (Private BDS)

• Promising VC sectors support via Sector associations build up (with BNPC sector expertise) based on initial Pilot projects.

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PSDP Accomplishment

• As of November 2015 the PSDP has implemented 1,618,833 Mil Euro toward the recruitment of 29 consultant, both local and international, to assist beneficiaries in the Agro-Industry, Construction and Public Works, ICT, Manufacturing, Textiles and Tourism sectors.

• To date the Program has assisted 63 beneficiaries by ameliorating their potential in playing a larger role in the economy of Botswana via IO collaborative initiatives, where possible; with the majority of the funds directed to local service providers.

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SMME Observation (Risk Mitigation)

• The overall observation regarding PSDP beneficiaries is that beneficiaries are generally at an early development stage challenged with basic needs stemming from the fact that business owners do not have the requisite ground level business skills – financial and business management basics.

• Without business or finance qualifications many PSDP business owners are further challenged with risk mitigation resulting in the inability to take calculated risks towards growth.

• A business strategy is possible only if the business owner / promoter understands how to mitigate risk. This is why the majority of the existing business plans / strategies are produced by external consultants to secure funding; however, in most cases management is not intimate with the details leading to poor performance and or bankruptcy.

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Adverse effect of Government Initiatives

• Government developed several initiatives in support of SMMEs. However, it created dependencies within the private sector affecting in-house growth and innovation.

• Business owners are able to come up with a business idea without the knowhow to bring it to life. There is no proactive mentoring to assist SMMEs / SMEs that have had funding approved. Known instances of mentoring have only been initiated once beneficiaries are in danger of financial collapse; if at all, perpetuating treatment of the symptoms instead of the condition.

• In summation, few PSDP SMMEs have the competency to draft a comprehensive business strategy and management to effectively drive it.

• This explains the lack of innovation towards new markets, segments and or new products and services development.

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Market Conditions & Quality Management Systems

• Despite their relative challenges some organizations have been able to realize:

• Significant revenue growth without quality controls, ISO certification guaranteeing quality products and or services.

• This phenomena is directly due to the commensurate level of Botswana consumers. The consumer market has been developing relatively at the same pace as SMMEs and SMEs

• However, it has been observed that consumers becoming more aware of other their purchasing power via access to regional and international markets. The more informed consumer market is steadily applying pressure on local businesses towards much needed quality controls (ISO certification) introducing and or increasing competitiveness.

• The African, Caribbean and Pacific group of states - European Union Technical Barriers to Trade (ACP-EU TBT) Program slated to produce a National Quality Policy and strengthen Botswana's Quality Infrastructure(QI) towards compliance with the World Trade Organization (WTO) / TBT requirements is appropriately timed to meet the growing demands of a more educated consumer.

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Beneficiary Perseverance & Quality Management Systems

• HiPos were mentored by European service providers. The PSDP has been pleased with the consultant's competencies who assisted beneficiaries with the same work ethic as those from their home countries. The beneficiaries were well versed in exploiting the recommendations provided by European and local service providers.

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Conclusion

Overall the CU has been fully operational and adapting to the needs of the beneficiaries while guiding service providers to ensure beneficiary impact; and, extracting the associated lessons learned. It is however recommended that future programs of this nature must have a post loan support component to ensure the continued and increased participation of SMMEs in the local economy.

11/3/2016


11/3/2016

Thank you !

Thapelo L. Lippe

Program Coordinator

Email: [email protected]

Nnyaladzi Malaki Monyamane

Program Assistant

Email: [email protected]

Geographical Address:

CDE Regional Office for Southern Africa

Plot 54351, Exponential Building

Central Business District (CBD)

Gaborone, Botswana

Tel. +267 3191230

Fax. +267 3191271

Web: http://www.cde.int

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Contacts

mailto:[email protected]

mailto:[email protected]

http://www.cde.int/