the role of institutions in smes development in botswana

www.theinternationaljournal.org > RJEBS: Volume: 05, Number: 08, JUne-2016

The Role of Institutions in SMEs Development in Botswana: A Qualitative Analysis

Lillian Mookodi (Associate Researcher, Botswana Institute For Development Policy Analysis )

Nathan Francis Okurut( Lecturer, The University of Botswana)

Njoku Ama (Lecturer, The University of Botswana)

Contact Address

BIDPA House; 134 Tshwene Drive

Gaborone International Finance Park; Kgale Hill

Private Bag BR 29

ABSTRACT

Small and Medium Enterprises (SMEs) play a critical role in promoting inclusive growth through the

creation of employment opportunities especially for the poor. Further, the SME Sector helps

economies achieve industrial and economic development. Many economies are therefore

implementing strategies that promote; facilitate and support entrepreneurship. In addition, issues of

institutional development have in recent years been emphasized especially in the developing countries;

which make the study of institutions and how they promote/discourage SME entrepreneurship is

critical to fill in the implementation gaps. Botswana like other countries has taken some initiatives to

support the SME sector. This includes adoption of policies like the Small Business Act; Industrial

Development Policy; and the Policy on Small; Micro and Medium Enterprises. The country has also

established a number of institutions to support the SME sector; these include the Local Enterprise

Authority, Department of Industrial Affairs, Department of Vocational Education and Training, and

Botswana Bureau of Standards. This study therefore implored content analysis and a “focus group

discussion chat model” to investigate the extent to which institutions have been responsive to the

growth needs of female owned and male owned SMMEs; and in the process highlights the constraints

faced by these institutions and propose what could be done to enhance institutional capacity.

KEY WORDS: Small and Medium Enterprises; Development; Entrepreneurship; Institution

Jun-16

LIST OF ACRONYMS/ABBREVIATIONS

AIDS Acquired Immune Deficiency Syndrome

BIDPA Botswana Institute for Development Policy Analysis

BIH Botswana innovation Hub

BOCCIM Botswana Confederation of Commerce, Industry and Manpower

BOCONGO Botswana Council of Non-Governmental Organisations

BOBS Botswana Bureau of Standards

BWP Botswana Pula

CA Content Analysis

CEDA Citizen Entrepreneurial Development Agency

DIA Department of Industrial Affairs

DVET Department of Vocational Education and Training

EDD Economic Diversification Drive

FGDs Focus Group Discussions

FSVC First Steps Venture Centre

GAD Gender Affairs Department


GDP Gross Domestic Product

GoB Government of Botswana

HIV Human Immunodeficiency Virus

ICT Information and Communications Technology

IDP Industrial Development Policy

KIIs Key Informants Interviews

LEA Local Enterprise Authority

MoA Ministry of Agriculture

MTI Ministry of Trade & Industry

NDP National Development Plan

NGOs Non-Governmental Organisations

NFTRC National Food Technology Research Center

OP Office of the President

SBA Small Business Act

SMMEs Small, Micro and Medium Enterprises

SEPAC Small Enterprise Promotion Advisory Council

UNIDO United Nations Industrial Development Organization

WIBA Women in Business Botswana

YFF Young Farmers Fund

1. INTRODUCTION

Regardless of having been among the poorest countries in the world at independence, through fiscal

discipline and good governance, Botswana transformed from the per capita GDP of US$ 70 in 1966 to

a per capita GDP of US$ 8,533 in 2011. The growth rate has reduced extreme poverty from 23.4

percent in 2003 to 6.4 percent in 2009/2010 (NDP 10; Statistics Botswana, 2011). However, Botswana

has to address issues of HIV/AIDS, high income inequalities; and high unemployment in order to meet

the national development goals. These issues have led Botswana to pursue a policy of economic

diversification and amongst the strategy‟s goals are to provide support and conducive operational

environment for Small, Micro and Medium Enterprises (SMMEs1). The justification of this effort is

that research has proven that SMEs play a significant role in the self-help efforts of the marginalized

and vulnerable groups such as the unemployed youth, female-headed households, and the disabled in

both urban and rural areas to meet their basic needs. (BIDPA, 1998; 2007). Government of Botswana

(GoB) has therefore taken some initiatives to support the SMME sector. This includes adoption of the

Small Business Act (SBA); Industrial Development Policy (IDP); the Policy on Small; Micro and

Medium Enterprises. GoB also established a number of institutions to support the SMME sector; these

include the Local Enterprise Authority (LEA), Department of Industrial Affairs (DIA), Department of

Vocational Education and Training (DVET), and Botswana Bureau of Standards (BOBS). However,

issues of institutional development and how they support SMEs growth has been less researched.

Therefore, the study of institutions and how they promote/discourage SME entrepreneurship in

Botswana is critical to fill in the implementation gaps.

1 SMMEs - Small, Micro and Medium Enterprises in Botswana‟s context.


1.1 Objectives of the Study

The overarching aim of this study was to explore how institutions in Botswana have contributed to the

development and growth of SMMEs; guided by the following specific objectives:

(i) Examining how institutional policies and operational procedures have contributed to the

development and growth of SMMEs in Botswana.

(ii) Investigating the policies, legal and regulatory constraints faced by institutions in promoting

the development and growth of SMMEs.

(iii) Identifying key challenges faced by institutions in assisting the SMME sector.

(iv) Proposing policy recommendations that can address the constraints faced by institutions and

SMMEs.

This paper is organised in five sections. The next section describes the research design; while section

three discusses the results. On the other hand section four concludes the paper and proposes possible

policy actions.

2. RESEARCH DESIGN

The objective of this study was to examine how institutional policies and operational procedures have

contributed to the development and growth of the SMMEs in Botswana. To achieve this objective, the

research employed a qualitative approach; and the mediums used to collect data were Focus Group

Discussions (FGDs) and Key Informants Interviews (KIIs). Content Analysis (CA) was then applied

on the KIIs semi structured question answers while a Focus Group Research Model Flow Chart

(adopted from Lifvendahl, 1994) was applied to on the FGDs‟ notes. The research design is

summarized in Figure 1 below.

The classification of SMMEs in

Botswana is as follows (GoB, 1998):

i. Micro-enterprise: an enterprise which

has less than six workers including the

owner and an annual turnover of less

than BWP60 000.

ii. Small- enterprise:: an enterprise that

employ less than 25 paid employees,

and have an annual turnover of between

BWP 60,000 and BWP1,500,000.

iii. Medium sized- enterprise: an enterprise

that employ less than 100 paid

employees, and have an annual turnover

of between BWP1 500 001 and BWP

8,000,000.


Figure 1: Research Design- Qualitative Approach

PREMILIMINARY STAGE: At this stage, researchers carried out a comprehensive literature

documentation of local, regional and international work previously carried out on the subject. This

stage assisted the team to identify twenty eight institutions in Botswana that play a role in the

development of the SMME sector either through entrepreneurial development or funding. However;

twenty three institutions participated because five have been closed down for various reasons. The

identified stakeholders included Government Institutions; Parastatals; Commercial Banks; and the

Private Sector Institutions. The key informants identified from the institutions covered a variety of

personnel and these include: Strategy Managers; Public Relations Officers; Executive Directors;

Project Coordinators; Client Service Managers. See Figure 2 for stakeholder classification.

Figure 2: Participated Stakeholders


STAGE 1: Following the preliminary stage, a semi structured questionnaire was designed to guide

KIIs with above mentioned personnel. Further, recordings of the interviews were made to be

collaboratively used with the notes.

STAGE 2: After collection of the qualitative data at stage 1, ccontent analysis of the semi structured

interviews and notes collected from the KIIs followed. This was supplemented by the drawing of the

FGD Model Flow Chart to analyse the data notes collected through FGDs.

2.1 Content Analysis and its Relevance

Content analysis technique was applied to examine the special characteristics from the KIIs notes;

texts and recordings. This method was used based on the argument that interviews or field notes and

diverse types of unobtrusive data are often not acquiescent to analysis until the information the notes

convey has been condensed and made systematically comparable. It is however imperative to point out

that a number of researches have argued against content analysis while some have supported this

method. Among others, Silverman (1993; 2006) argued that content analysis is limited to counts of

textual elements thus more reductionistic. On the other hand, Berelson (1952) argued that content

analysis has been used in a dizzying array of fields, ranging from marketing and media studies, to

literature and rhetoric, ethnography and cultural studies, gender and age issues, sociology and political

science, psychology and cognitive science, and many others. He asserted that content analysis reflects

a close relationship of socio and psycho-linguistics, and plays an integral role in the development of

artificial intelligence. Similarly, Abrahamson (1983, pp.286) indicated that “content analysis can be

fruitfully employed to examine virtually any type of communication” whether quantitative or

qualitative. Further, Glassner and Loughlin (1987) argued that content analysis is an effective

qualitative analysis method that gives “counts” of textual elements and a means of identifying,

oragnising, indexing and retrieving data. For the purpose of this paper, content analysis was chosen

due to its advantages as it looks directly at communication through texts or transcripts, and hence gets

at the central aspect of social interaction. CA also allows for both quantitative and qualitative

operations (mixed methods). Through analysis of texts, one can acquire valuable historical/cultural

insights over time; and it provides insight into complex models of human thought and language use.

Content Analysis Steps Taken in data Analysis

i. After completion of the KIIs, the collected information was made in text (field notes and

transcriptions of the field recordings)

ii. Further, all the semi structured questionnaires were scanned and sorted by the identified themes,

similar phrases, patterns and commonalities

iii. Codes were then identified in this data and affixed to sets of notes

iv. These codes were then transformed into themes

v. The identified patterns were then discussed in light of previous research (reference made to

documented literature in the preliminary stage

vi. A short report was then written based on the findings of the interviews

2.3 Focus Group Discussions (FGDs)

Following one-on-one interviews with the key informants/personnel, three Focus Groups were formed

as follows: 1- officers from institutions that offer only training or skills development; 2- officers from

institutions that offer financial assistance and 3- combination of institutions that offer training and

those provides funds. See Figure 3 below.


Figure 3: Focus Groups

The Focus Group Discussion Process

The FGDs process adopted the “Focus Group Research Model Flow Chart” from Lifvendahl (1994)

with modifications and figure 4 below summarises the process.


Figure 4: The Focus Group Discussion Process

3. STUDY RESULTS

Table 1: Summary of KIIs Results

Institutions/ Participants Views Similar

Characteristics/

Words/Meaning

Sub-Themes Main Theme

Services Provided


Examples of Verbatim Loans or

credit access

Capacity

Building

Entrepreneurial

Development

NFTRC: “…National Food Technology Research

Centre offers training and all our services to clients

regardless of Gender, religion or age...”

Training on

business management

Improved

Access to Finance

Financial

Assistance

Business Botswana: „…Through training both

rural/urban entrepreneurs , we have increased their

production and service delivery”

Training on

financial management

LEA: “…Training in different business operation skills

e.g book-keeping…” Start up and

operational finance

Policies/ Operational procedures enhance or constrained the growth SMMEs

Examples of Verbatim Enhanced

Marketing Skills

Improvement

in Business Skills

Growth in

Business Skills

NFTRC: “…NFTRC impact is seen by the number of

SMES it has trained since it was accredited by BOTA

and has supported several SMES some of which are

now ISO 9001 compliant, Kelosika and Wilde fruits

come to mind. Additionally, lobbying for cottage

industry has facilitated Council to inspect trained

people from poverty eradication to qualify to tender

and supply schools...”

Enhanced

Networking Skills

Improvement

in Marketing Skills

Growth in

Mgt Skills

LEA: “…The training that LEA does has improved the

operations of 70% of SMMEs that are registered under

LEA...”

Enhanced

Management Skills

Improved

Quality and

productivity

Growth in

Marketing Skills

Enhanced

Quality and

Productivity

Growth in

Quality of Products

Growth in

Productivity

Products/services provided by institutions contributed to growth SMMEs

Examples of Verbatim Improved

employment creation

Economic

Diversification

Enhanced

Business Skills

Facilitation

of high standards

products

Improved

Productivity

Enhanced

Mgt Skills

Gender Affairs: “…The grant directly contributes to the

growth of SMEs because it actually helps in creating

and developing the SMEs, in the last five years we have

supported over 850 women and men to the value of

P28 848 000.00”

Increase in

food security

Improved food

security

Enhanced

Marketing Skills

CEDA: “…CEDA provides funding for the

development of citizen owned businesses” Improved

Productivity Enhanced

Quality of Products

Growth in

Productivity

Challenges Faced Institutions To assist the growth of the sector

Examples of Verbatim Misuse of

inputs and/

abandoning of

businesses is high

Guidelines/policies

difficult to implement

Inadequate

Coordination of

Institutions

WIBA: “…Lack of resources and finance so as to

reach out to the rest of the country thus it impedes our

efforts to expand our network”

Land

Acquisition very

difficult

Fragmentation of

policies

Inadequate

collaboration of

Institutions


NFTRC 1: “…Market issues, raw material availability,

training in business management, fragmented

legislation governing the food industry are among the

highlighted problems by the SMEs in the recent needs

assessment study of NFTRC”

Fragmented

Policies (e.g. land, reg.

of companies, trading

licenses)

Duplication of

efforts by institutions

Inadequate

funds and resources

NFTRC 2: “…Requirements needed for one to be

registered as company is one of the costs that small

businesses complain about and are concerned that it

leads to increased cost and increased legal

requirements that they need to meet…”

Duplication

of Efforts Between

Institutions

Competition

among institutions and

lack of entrepreneurial

culture

Incoherent

licensing, registration

of companies and

trading policies

LEA: “…There is a lot of duplication of efforts

between LEA and other institutions thus constraining

growth and wasting resources”

Lack of

infrastructure

Poor Coordination

in the SME sector

In adequate

land

CEDA: “…There is poor data on SMMEs in Botswana

both at sectoral/ institutional level and at national

level…”

Lack of

funding High Taxes

CEDA “…There is low entrepreneurship culture in

Botswana thus mentoring takes too long in some

instances…”

Misuse of

benefits by

beneficiaries especially

in the Agriculture

Sector

Abandoning

of businesses by

SMMEs

Low profits

due to inadequate

markets, therefore

leading to un-serviced

loans.

Proposed Policy Recommendations to Enhance performance of institutions on the development of SMEs

… Gender considerations should be highly practiced

because women are still lagging behind… Gender

considerations

Strengthened

Coordination

Strengthening

Coordination and

Collaboration of

Institutions

…Land ownership should be seriously taken into

consideration… Land ownership Strengthened

Collaboration

Enhancement of

Networking;

Clustering and Market

Access

Legal system/binding documentation in place living

…For example the move to allow poor people to operate

bread making businesses from their home is a good

move but can be applied to safe and hygienic places for

meat businesses especially small stock;

Legal

system/binding

documentation

Increased

Marketing

Increased

Lobbying for Women

Inclusion Across all

Sectors As

Entrepreneurs

…..Put in place an infant industry policy for emerging

business There is need for

a comprehensive data

set on SMMEs within

the institutions

Introduction

of legal policy

Enhancing

Entrepreneurship

Culture; and SMMEs

Database


… need for collaboration between institutions that are

helping the SME development… CEDA, LEA,

BOCCIM, BOCONGO work together with Government

sectors and development partners like the UN agencies

to avoid counteracting each other‟s efforts… business

skills… BOBS to solve the issue of affordability of

standards and certification of products; …subsidies

towards SMMEs certification to strengthen market

penetration…;

collaboration

between institutions

Documents

Enhancement of

Partnerships by

SMMEs

subsidies towards

SMMEs certification to

strengthen market

penetration

Synergy of

policies

…collaboration between the key institutions LEA,

CEDA, BOBs and MTI); … Need for a strong

coordination body; There is need for powerful

coordination and synergy of the institutions;

Need for

collaboration between

the key institutions

Entrepreneurship should be made part of the Botswana

Curriculum; …empower students with technical skills… Need for a strong

coordination body

Need for political will and support for all the

institutions… Entrepreneurship

should be made part of

the Botswana

Curriculum

Need for a comprehensive data ….; Botswana should set

up big markets for different sectors e.g. agriculture,

manufacturing, etc where producers can easily see;

international marketing agents abroad to avoid losses by

producers

Need for political

will and support for all

the institutions

infant industry

policy for emerging

business

3.2 FGDs Results Summary

Table 2: Summary of the FGDs Results

Guidelines Similar Characteristics

Consensus

Reached (Yes/No)

FGD

1

FDG

2

FDG

3

What is your opinion on

the importance of the

SME Sector in the

development of

Botswana's Economy?

How?

Economic Growth Promotion…..Employment

Creation….Boosts Private Sector…Innovation and

Productivity Growth…Reduces Poverty...

Yes Yes Yes

What are the services

that your Institution has

offered to the SMMEs

Training in Business skills…Training in Management

Skills… Training in Book keeping…Marketing of

products…Funding… Advocacy…

Yes Yes Yes

In what ways have

these services you

Assisted in the growth of SMMEs increase in

employment creation….Better Managers…Increased

Yes Yes Yes


offered helpful to the

SMMEs?

survival rate…Increase access in

accreditation…Built in capacity…Entrepreneurial

Development….

In what ways do you

feel the services fell

short in assisting the

SMMEs?

Crowded institutions towards one goal but no

diversification…No growth of the Sector and low

diversification….Implementation issues????.....

Yes Yes Yes

What are the challenges

you have experienced

while assisting the

SMEs,, and how have

you solved them?

Examples allowed.

Inadequate funding…Lack of serviced land….Low

coordination of institutions…Inadequate

collaboration…Inadequate market…Low

entrepreneurship culture…High rentals for some

SMEs…Conflicting policies…Ambiguous processes

when registering companies….

Yes Yes Yes

What are the

recommendations that

you think can improve

the effectiveness of

institutions that assist

SMMEs

More Capacity building in investment/trading

skills…..so that SMMEs can respond quickly to

international markets…Effective Business Support

System to increase competitiveness….Development of

Innovative Solutions to collateral

issues….Development of export support systems that

provide information about specific markets and

potential customers and partners…Improve policy

coherence…Improve coordination…

Yes Yes Yes

Is there anything else

we haven‟t discussed

yet that you think is

important for the

development of the

SMME Sector?

More research needed…..to advice policy and

improve the sector in order to assist in diversifying

the economy

Yes Yes No

3.3 Results Discussion

Based on the study results, it is unquestionable that institutional support is imperative in SMME sector

development in Botswana; as they enhance entrepreneurial development and also provide funding for

SMMEs.

3.3.1 Entrepreneurial Development

Institutions that provide entrepreneurial development include LEA, DIA, BOBS, FSVC, NFTRC,

BOCCIM, BOCONGO, and WIBA. These institutions provide one common service which is business

skill training. These institutions have played a major role in the development of the SMME sector by

providing among others: training on business management; enhancement of technology adoption;

training on technical skills; provision of advisory services; monitoring of services to ensure

sustainability; marketing support through shows, exhibitions, and networking seminars. These

institutions also facilitate access to business relationships and resources; provide certification to

improve local, regional and international competitiveness; and promotion of standards and quality

assurance measures.

Through provision of these services, institutions have positively impacted on the growth of SMMES.

For example through trade missions link ups, SMMEs found suppliers, partners, and benchmarked

against similar businesses and have accessed new markets locally, regionally and internationally.

These institutions have run several workshops for entrepreneurs, which have instilled sound business

management/survival tips, e.g. WIBA has done that for women in business; and has also helped


women to venture into sectors like Agriculture, ICT, and Green Technology, which have been male

dominated. On the other hand, Business Botswana (used to be BOCCIM) is currently the coordinating

body of all the institutions, and has trained around 239 members in 2012 on industrial disputes,

customer service and supervisory skills (BOCCIM, 2012). Further through collaboration with MTI,

after dairy was identified as a priority area through the Economic Diversification Drive (EDD), two

major milk processing plants have been set up and are expected to boost lagging production in this

category. In addition to that, during the NDP 10 (2009/10 – 2015/16) period LEA managed to

negotiate for the leather sector to be funded through the Office of the President. The institution has

also registered 114 new SMMEs in 2013/14. Moreover in collaboration with Ministry of Education

and Skills Development has managed to workshop 26 058 students from senior secondary schools and

technical colleges on entrepreneurship awareness in order to inculcate entrepreneurial spirit (LEA,

2014). At regional level, SMMEs in Botswana have benefitted from SEPAC's support through access

to markets, export opportunities and public procurement; streamlined regulations and legal controls;

and improved access to business networking and lobbying.

3.3.2 Entrepreneurial Development Challenges

Even though these institutions have made some achievements there also exist challenges that deter the

Institutions support to the SMMEs, and among them are: lack of resources and finance so as to reach

out to the rest of the country by most of these institutions impedes their efforts to expand networking

assistance to the SMMEs; fragmentation of policies has come out strongly as an impediment for

institutions e.g. licensing, registration of companies, and land acquisition; high tax rates are said to be

quite steep especially at start up phase of SMMEs; lack of serviced land or necessary infrastructure;

and zero limit on repatriation of profits by foreign companies results in inadequate liquidity in the

economy, leading to high costs of production or operation for businesses which is a predicament for

the SMMEs

3.4 Financial Support The second major theme deduced from the results is financial support offered by institutions to

SMMEs. The main financial supporter is CEDA. Other financial providers are Gender Affairs

Department (GAD), Department of Crop Production, Poverty Eradication Unit, Youth Department,

and Commercial Banks. These institutions directly contribute to the growth of SMMEs because they

provide start up finance, operational finance and training on different skills. For example, the Gender

Affairs Department(GAD) in the last five years have supported over 850 women and men to the value

of P28 848 000.00. CEDA also approved 1042 loan applications valued at BWP 581 million for

SMMEs by September 2003 which created about 7000 jobs (CEDA, 2003). Further by March 2009,

CEDA approved 292 projects with a value of P 189.6 million. Moreover since CEDA also administers

that Young Farmers Fund (YFF), in 2009 the institution approved 188 projects valued at P76 000. This

has improved the agriculture sector SMMEs with horticulture in the fore-front at 30% followed by

cattle breeding at 23 % (CEDA, 2009).

3.4.1 Financial Support Challenges

Despite achievements made on financial provision, there are challenges endured during the process

and implementation of projects and some of them are: stringent requirements for business licenses and

inflexible requirements by Banks when SMMEs try to open Bank Accounts have been slowing down

progress. This shows lack of collaboration as it should be easy for an entrepreneur who has been

trained and offered funds by CEDA to open an account at any bank which assists SMMEs as well, but

that is not the case. Institutions also pointed out that there is inadequate coordination within

government, private sector and NGOs; there is also inadequate resources and funds especially in rural

areas and this has negatively interfered or hampered the assistance to rural entrepreneurs

Given the major challenge as lack of financial support that entrepreneurial development institutions

face, financial sectors should collaborate with non-financial institutions more and help finance


SMMEs. Further, these institutions should help educate the lower business owners especially women

in areas of financial literacy (in terms of asset ownership and risk taking). Government should also set

aside more funds to assist SMMEs. Institutions like Business Botswana should continue excessively

lobbying for the production of the policies that are biased towards SMME development, for example

the Citizen Economic Empowerment Act. On the other hand Government should consider lowering tax

rates, especially at start up phase of businesses. Despite the assistance that SMEs are getting from

SEPAC, there is still need for favourable customs laws that favour and make cross boarder trading

easier; e.g. standardized cross border trade licenses and low prices for permits as well as consistency in

application of these in the SADC regions.

3. CONCLUSIONS AND RECOMMENDATIONS

4.1 Conclusion

Given the above findings, it is critical that Botswana continues supporting the SMME sector given its

benefits of economic growth, employment creation an economic diversification. The study results

signifies that institutions support is essential for the development of the SMMEs as they enhance

entrepreneurial development (training; monitoring; marketing, etc) and provide financial support

(provision of set up or operational funds). Institutions assist SMMEs with finance through their sub-

sidised loans; training entrepreneurs and have in a way inculcated new technology adaptation. They

have also played an important role by offering marketing services for SMMEs to access local; regional

and international markets where possible. Further some SMMEs have acquired certifications, thus

helping them to produce quality products that are competitive as they meet international standards

Beside the positive impact made by the institutions, this research also realised some gaps and

challenges faced by these institutions. Among others, there is lack of coordination of institutions which

in many cases has resulted in efforts duplication and competition for clients between some institutions.

Additionally, insufficient collaboration between institutions has also proven to be a major issue

(especially government institutions). However, it is believed that this is work in progress since

Business Botswana has been for the past five years performing the coordination role.

Another exceptional weakness is the lack of entrepreneurship culture in Botswana which has led to

relapsing of potential businesses. Other issues such as lack of information or data on SMMEs in

Botswana at sectoral and national level has not made it easy to measure the impact of SMME

development policies. On the other hand fragmentation of policies has lowered the institutions

intensions to assist SMMEs; e.g. the Land Policy; Licensing Act and the Registration of Companies

Act. Lastly, the escalating issue of lack of serviced land or infrastructure has affected the good

intentions by the Government and private sector SMMEs especially the youth.

4.2 Recommendations

I. Strengthening Coordination and Collaboration of Institutions

Even though Business Botswana is currently leading the coordination role, there is need for the

Government to encourage all the sectors to collaborate and work together under the leadership of

Business Botswana. To achieve this, there is need to synergize the available SMME sector

development policies; and to adopt the Small Business Act by all institutions. What this says for

policy is that there is need for embed strategies toward the private sector and SMMEs in Botswana‟s

broader national development plans and the national vision: SMEs associations should be encouraged

to participate effectively in national dialogues e.g. the Vision 2036 consultations that help set the

strategic frameworks for development, so that the contribution, policy and support needs of SMEs are

fully recognised as central to growth, employment and poverty eradication. This will also promote

policy coherence at national and regional level: it is essential to support working towards “whole of

government” approaches so that investment and trade policies are standardised and aligned with

development objectives and policies to avoid conflicting policies and strategies.


II. Enhancement of Networking; Clustering and Market Access

Access to markets has come up as one of the major issues which impede SMME growth therefore;

both Government and private sector should encourage networking by the entrepreneurs. SMME should

be encouraged to join associations in order to learn from other players in different industries. Further,

SMMEs should be encouraged to form clusters (rather than operating as individuals) in order to

mitigate against shortage of land; enhance market access and technology adoption. This can be

benchmarked from countries like Honduras, Nicaragua, Mexico, and Jamaica. UNIDO (1999) indicate

that these countries embarked on SME networks through the establishment of specialized institutions

acting as a networking promotion agencies. These agencies identified groups of enterprises with

similar which characteristics and growth constraints and helped them establish common development

projects; and helped growing the SME sectors in those countries. In the case of Nicaragua, an

important move was of local capacity building. Experienced consultants were brought in to capacitate

national consultants with no experience and no direct knowledge of cluster or network practices or

policies. This then assisted the nationals to understand the importance of clustering and networking

and improved the SME. Since clustering has proved to work in a number of countries as it is believed

to produce agglomeration benefits that spillover to both small and large enterprises. Thus, at policy

level this can be enhanced by providing a robust infrastructure; and lowering taxes to businesses at

start up phases to clustered SMMEs. Additionally, there is need at policy level to streamline the

regulatory and legal environments; and also to strengthen SME capacities to improve their

competitiveness in domestic, regional and global markets and expedition to financial resources access.

Encouraging and supporting the private sector associations and enterprises to be able to provide

information on markets and standards, advice on strategies, and access to technology and innovation

coupled with appropriate financing packages

III. Enhancement of Partnerships by SMMEs

Beside clustering and networking both Government and private sector should find ways to encourage

partnerships between entrepreneurs specifically having the less experienced small, and micro

entrepreneurs partnering with the established medium enterprises for benchmarking and growth

purposes. Further local entrepreneurs can be trained and subsequently encouraged to engage in

commercial partnerships with larger companies locally, regionally or with multinational companies.

Benchmarking can be done in some African and Asian countries; For example, the National Center for

APEC and the APEC Business Advisory Council (2014) indicates that a venture between Qualcomm

and Grameen Foundation has utilized mobile technology to successfully create a number of small

businesses in Indonesia.

IV. Enhancing Entrepreneurship Culture; and SMMEs Database

Policy action to cultivate business start-up culture and positive attitudes towards business foundation

in Botswana is needed. Government and private institutions should augment research on finding the

interactions between diverse factors of influence, start-up related mindset and business foundation

activities; then use the research empirical results in building entrepreneurial culture in Botswana.

V. Increased Lobbying for Women Inclusion Across all Sectors As Entrepreneurs

In Botswana statistics shows that there are more male entrepreneurs than their female counterparts

(BOCCIM, 2014). Further enterprises that are owed by men do have a better survival rate that those

owned by women (Gwebu, 2003). Government should therefore, empower and support the institutions

lobbying for women entrepreneurs support. Through public- private partnership institutions should

raise the level of understanding of the barriers affecting women‟s access to finance, as well as the

opportunities that financial inclusion can open up to women especially in rural areas; identify and

build public/private momentum around the policy, regulatory, and private sector actions to address

these barriers.


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