Picture credit: theelectionnetwork.com
The party that emerges as the winner of Kenya’s general election, to be held on 8 August, has an opportunity to supercharge job creation and economic growth by adopting policies that help Small & Medium Businesses to thrive
That’s according to Nikki Summers , Regional Director for Sage in East Africa, the market and technology leader for integrated accounting, HR & payroll, and payment systems. She says that the next government will have a strong framework and foundation to build on, following years of State investment in creating an enabling environment for entrepreneurs and business builders.
“With GDP expected to expand by around 6% this year , Kenya is on the right track for growth,” says Summers. “Improving the ease of doing business and following sound macro-economic policies will help ensure that this pace of growth continues, also offering an environment where Small & Medium Businesses can flourish.”
Summers says that Small & Medium Businesses deserve a special place in government policy because they contribute up to 80% of jobs in an emerging economy such as Kenya. As important as large infrastructure projects are, Small & Medium Businesses are the engines of job creation and the most efficient vehicle for redistributing and creating prosperity for the benefit of ordinary people, she adds.
“The new government should continue to follow the Kenya Vision 2030 blueprint, which recognises the crucial role of micro, small and medium business in industrial development,” says Summers. “It should also look at ways of strengthening its various small business funding efforts such as Uwezo Fund and the Youth and Women Enterprise Fund, since access to financing remains one of the most significant challenges for entrepreneurs and business builders.”
Improving small business survival rate
According to the Kenya National Bureau of Statistics (KNBS) around 2.2 million micro small and medium enterprises (MSMEs) shut down in the last five years. Some 30% reported that shortage of operating funds was the reason for their closure, highlighting the importance of sustainable financing in ensuring a healthy environment for small businesses.
“We also believe that technology could play a role in improving the sustainability of small Kenyan businesses and that government could encourage uptake of accounting solutions,” says Summers. “Accounting and payroll software could help entrepreneurs keep more accurate records, comply more easily with government and tax regulations and gain better visibility into financial performance. This could, in turn, improve their financial planning and their ability to manage cash flow.”
Summers says that the present governments’ policies of entrenching Buy-Kenya-Build-Kenya policy in public procurement are also to be welcomed. “The procurement budget is one of the best tools government has to help develop emerging businesses,” she adds. “By giving small businesses preferential treatment in tenders, paying them quickly for work they do, and helping them develop skills, government can help them grow their businesses to the next level.”
There should also be closer collaboration between small business forums, big business (including multinationals) and government in nurturing the small business sector. “We at Sage would welcome working with other large companies and government to create forums for education, recognising and rewarding small businesses,” says Summers.
“Mentoring programmes, where business builders can learn from established entrepreneurs and businesspeople, as well as platforms that connect small businesses to big business and government, could all help smaller businesses to grow and thrive.”