Presentation on theme: "PROMOTION STRATEGY FOR SMEs, POLICY FRAMEWORK FOR ENABLING ENVIRONMENT SADC EXPERIENCE VOLOLONIAINA RALIVAO ALISOA."— Presentation transcript:
1 PROMOTION STRATEGY FOR SMEs, POLICY FRAMEWORK FOR ENABLING ENVIRONMENT SADC EXPERIENCE VOLOLONIAINA RALIVAO ALISOA
2 INTRODUCTIONSADC is composed of 15 countries at various levels of industrial development. Among the Member States with a total of more than 250 million inhabitants, there are large differences in size, economic development, trade patterns and factor endowmentsSADC comprises least developed countries, developing countries and one Newly Industrialized Country (NIC), South Africa, which accounts for over two-thirds of the region’s economy.Despite a relatively small market size, SADC region can still reap significant gains from regional integration , provided supply side constraints are adequately addressed.
3 INTRODUCTIONThe structure of SADC countries output is typical for a developing region where large shares of GDP originate from primary sectorsMost countries in the region are characterized by the predominance of small industrial units, which mostly produce for the national and regional marketsThe industrial base of the SADC region is characterized by a significant number of small and medium enterprises (SMEs) operating in the informal sector.
4 INTRODUCTIONThe small and medium-sized manufacturing enterprises play an increasingly important role in employment and wealth creation through value-addition and diversification of exports
5 The SADC industrial Challenge Trade Protocol ratified in 2001 with the purpose of increasing intra-regional trade through liberalization of industrial trade flowsRegional Indicative Strategic Development Plan (RISDP) was developed in 2003 with the goal to ‘Diversify the industrial structure and exports with more emphasis on value addition across all sectors by 2015 with the following specific targetsDiversify (increase of non traditional exports) and sustain export growth rates by at least 5 percent annually;Increase in intra-regional trade to at least 35 percent by 2008;Increase manufacturing sector percentage share of GDP to 25 percent by 2015.FTA established in 2008
6 The SADC Industrial Challenge In spite of implementation of the Trade Protocol for the past 8 years and the eventual establishment of FTA , intra SADC trade declined from almost 11% of all trade in 2000 to around 9% in 2008 against the 35 % RISDP target. This appears to suggest that market opening alone is not sufficient to ensure sustainable regional industrial sector growth
7 Industrial Performance in the SADC Region Macroeconomic Highlights of the RegionOn average, SADC as a region recorded growth rate of 3.5 % in 2003, 5.9% in 2006 and 6% in 2007Manufacturing Sector Performance in the RegionManufacturing Sector Share in Total GDP (South Africa and Mauritius have sizeable manufacturing sectors , at 24% and 23% of GDP) . The SADC countries are at varied levels of development in terms of MVAValue of SADC Manufactured Exports ( EU is the first client of SADC )
8 Industrial Performance in the SADC Region Diversification Level of Exports ( after six years of implementation of the Trade Protocol, the structure of the ten products is mostly the same, with the top 5 in the same order)Intra SADC Trade ( SA exported to all MS, Swaziland had the highest share of exports destined for SADC in both periods, Tanzania’s export increased from 5’8 % in 2000 to 18.9% in 2006)
9 COMMON CHALLENGES FACED BY INDUSTRIES IN SADC Standards and Quality:Reliance on Low Tech Commodity exportsTechnological and Productive Capacities:High Costs of Doing BusinessInstitutions and regulations:Private Sector Size and CapacityHuman capital and skillsAccess to financial resourcesEnvironment and Climate change
10 INITIATIVES IN SUPPORT OF INDUSTRIAL DEVELOPMENT National Policies on IndustryThe Southern African Coordination Community (SADCC) created in 1980 prioritized regional cooperation in industrialization as a major tool for development and eradication of povertyThe Transformation of SADCC into the Southern African Development Community ( SADC) in 1992The context of trade liberalisation and globalization process and the joining of Namibia, South Africa and Mauritius as members of SADC and its transformation from Conference to Community, dictated the need for a new policy on IndustryDraft SADC Industrial Development Policy developed and presented to the Ministers of Trade and Industry meeting in 2001
11 INITIATIVES IN SUPPORT OF INDUSTRIAL DEVELOPMENT 2003 : Adoption of RISDP2004 : 9 SADC priority sectors identified based on the following criteria:Ability to increase value addedComparative advantageJob CreationForeign Exchange generationAbility to promote regional integrationsector specific analysis, including value chain analysis was undertaken with a view to producing sector specific strategies.
12 INITIATIVES IN SUPPORT OF INDUSTRIAL DEVELOPMENT 2006 Strategies for the 9 priority sector developedAgro food processingFisheriesForestryTextiles and GarmentsLeather and Leather ProductsProcessing of Mineral (metallic and non-metallic) productsPharmaceuticals and ChemicalsMachinery and EquipmentServices
13 INITIATIVES IN SUPPORT OF INDUSTRIAL DEVELOPMENT 2009 Draft SADC IP updated taking into account RISDP, the strategies of the 9 sectors, the financial crises…the experience of the Tiger economies, the others RECs…, the National Policies
14 DRAFT SADC IP GENERAL STRATEGIES FOR INDUSTRIAL DEVELOPMENT 1 Regional Stability and Security2 Macroeconomic Stability3 Regional Market Access4 Investment Promotion5 Industrial Finance and Credit6 Product Standards and Quality7 Technology Transfer and Upgrading8 Infrastructure
15 DRAFT SADC IP 9 Small and Medium Enterprises Promotion 10 Information Exchange11 Industrial and Technical Skills Development12 Environment and Sustainable Development13 Gender Mainstreaming14 Competition Policy and Law15 Regional Supply Chains Promotion16 National Policies Harmonisation
16 DRAFT SADC IP SECTOR SPECIFIC OBJECTIVES AND STRATEGIES 1 Agro-Food Processing2 Minerals Processing3 Leather and Leather Products4 Forestry, Wood and Wood Products5 Fisheries6 Pharmaceuticals7 Textiles and Clothing8 Machinery and Equipment9 Services
17 Small and Medium Enterprises Promotion Foster the cross-border vertical and horizontal inter-firm linkages amongst SMEs clusters and strength such networks and alliances for regional cooperation in order to boost competitiveness and regional exports,Intensify development of SMEs clusters engaged in export productsFacilitate enhancing of supply chain linkages between SMEs and large export oriented enterprises.Create a SADC SMEs NetworkProvide special programmes to strengthen entrepreneurship development support institutions that meet the needs of entrepreneurs with regional focus ( especially women entrepreneurs)
18 Small and Medium Enterprises Promotion Develop skills development programmes to promote application of technology, technical skills acquisition and technology diffusion from the SADC region.Undertake industrial upgrading and modernization programme in all SADC Member StatesPromote the production and domestic beneficiation of alternative products where SADC may have a competitive advantageEncourage partnerships , including joint ventures and subcontracting arrangements between SMEs and larger enterprises at national and regional levels and to identify opportunities in these areasIdentify and amend the laws and regulations as appropriate to facilitate participation of SMEs in industrial production
19 Other Industry – related Initiatives undertaken by SADC Secretariat The performance of the industrial sector has been influenced by a number of factors such as political and civil stability to macroeconomic stability, investment climate, human capital formation, financial and capital markets, as well as product standard , among others. To this effect, SADC has endeavoured to apply synergies from regional integration through development and adoption of Protocols, Declarations and Memorandums of Understanding to improve these factors and therefore enhance the performance of the sector.
20 Other Industry – related Initiatives undertaken by SADC Secretariat Declaration on Agriculture and Food SecurityDeclaration on Competition PolicyDeclaration on HIV and AIDSDeclaration on Information and Communication TechnologiesDeclaration on Productivity Memorandum of Understanding on Cooperation in Taxation and Related MattersMemorandum of Understanding on Macroeconomic ConvergenceMemorandum of Understanding on SQAM
21 Other Industry – related Initiatives undertaken by SADC Secretariat Protocol on Education and TrainingProtocol on FisheriesProtocol on ForestryProtocol on HealthProtocol on MiningRevised Protocol on Shared WatercoursesProtocol on TradeProtocol on Transport, Communications and MeteorologyProtocol on EnergyProtocol on the Facilitation of Movement of Persons
22 Other Industry – related Initiatives undertaken by SADC Secretariat Protocol on TechnologyProtocol Against CorruptionProtocol on Politics, Defence and Security CooperationProtocol on Finance and InvestmentProtocol on Gender and DevelopmentProtocol on Gender
23 Implementation of Protocol Protocol on TradeImplementation of FTA ( Tripartite FTA)SADC, in collaboration with COMESA and EAC, has developed an online NTB reporting and monitoring mechanism.Substantial progress has been made in the development of various instruments to enhance customs cooperation and trade facilitation
24 Implementation of Protocol Protocol on Finance and InvestmentThe Development Finance Institutions (DFI) in SADC countries are coordinated at regional level under the Development Finance Institutions Sub-committee whose secretariat is the Development Finance Resource Centre (DFRC). Through SME Development as a core focal area, the DFRC gives support to SADC DFIs in their programmes to provide finance and business support services to SMEs.Through the DFRC, SADC is in the process of establishing the SADC Project Preparation and Development Fund which is the first stage in the process of establishing the SADC Development Fund. It is envisaged that there will be a window in this fund to assist SMEs and private sector prepare industrial bankable projects as well as financing industrial development infrastructure
25 Implementation of Protocol Protocol on TechnologyDraft Cooperation Framework between Industry and Sciences and Technology CentersThe SADC Standardization, Quality Assurance, Accreditation and MetrologyIndustrial Upgrading and Modernization Programme (IUMP)
26 Implementation of Protocol Protocol on Transport and CommunicationSpatial Development Corridors have opened investment opportunities for both domestic and foreign private investors.SADC has developed several development corridors and SDI in the region: Maputo Development Corridor (Mozambique and South Africa), Beira Development Corridor (Zimbabwe/Mozambique), Limpopo Valley (Mozambique/Zimbabwe/South Africa), Trans-Limpopo (Zimbabwe/South Africa), Okavango Upper Zambezi International Tourism Initiative (Zimbabwe/Zambia/Botswana/Namibia/Angola) and Zambezi Valley (Zimbabwe/Mozambique/Zambia/Malawi) to mention a few with great potential
27 Key SADC Infrastructure Projects The Zimbabwe-Zambia-Botswana-Namibia Inter-connection ProjectObjective: To provide an alternative route for power flows to Namibia and relieving transmission congestion on the central transmission corridorThe North-South Corridor Project ( COMESA-EAC-SADC)Objective: To reduce the costs of doing business across borders so as to improve competitiveness of the countries that are served by the NSCThe SADC Region Information Infrastructure ( SRII)Objective: to provide National, Regional and International broadband connectivity for the SADC MS using terrestrial broadband optic fibre technology, wireless solutions and submarine cables
28 Key SADC Infrastructure Projects The Kunene Trans-boundary Water Supply ProjectThe project is a joint water supply and sanitation project between Angola and Namibia. It involves the rehabilitation and expansion of existing water supply scheme between the 2 countries
29 LADIES AND GENTLEMEN THANK YOU FOR YOUR ATTENTION