Micro, small, and medium enterprises (MSMEs) form the basic linkage between manufacturing and poverty reduction. However, before this can be realized, the many challenges facing MSMEs must be addressed. The Proudly Zambian campaign (PZC) emerges as a useful initiative in this regard. Initiated in 2004 by the Ministry of Commerce, Trade, and Industry, the Campaign has a primary objective to spur job creation and economic development by promoting the production and consumption of high-quality Zambian products.
Firstly, MSMEs in Zambia face a significant challenge when it comes to accessing finance. These small businesses often encounter difficulties in securing sufficient funding from banks and financial institutions due to the risks associated with lending to small enterprises. As a result, their ability to invest in technology, infrastructure, and skilled labour is constrained, ultimately impeding their potential for growth. According to The World BankMSMEs account for approximately 90% of businesses and over 50% of employment worldwide. Unlike large firms, however, MSMEs are less likely to obtain bank loans and often rely on internal funds or support from friends and family. Consequently, the International Finance Corporation (IFC) puts this funding deficit at $5.2 trillion. To address this challenge, PZC has committed to collaborating with various stakeholders to facilitate access to finance and funding opportunities for MSMEs. This is achieved through connecting MSMEs with financial institutions, thereby establishing targeted funding mechanisms.
The second limitation has to do with the adoption of new technologies and digital tools crucial for enhancing efficiency, productivity, and competitiveness. Resource limitations and a lack of technical expertise often hinder Zambian MSMEs from embracing and integrating these technologies into their operations. As a result, they face a technological gap that puts them at a disadvantage in the market. The PZC aims to bridge this gap by promoting the adoption of technology and facilitating access to training and capacity-building programs. Through collaborations with relevant organizations, the campaign will equip MSMEs with the necessary knowledge and support to effectively embrace and leverage technology, thereby enhancing their operations and competitive edge.
Thirdly, the sector experiences difficulties in both attracting and retaining skilled workers. This is due to limited access to quality education and training programs as well as an inability to compete with more established firms for the few skilled personnel. Ultimately, this adversely affects the ability to innovate, expand operations, and meet market demands. The PZC intends to partner with educational institutions and vocational training centers to develop programs tailored to the needs of MSMEs. As a case in point, the Zambia Association of Manufacturers recently signed an MOU with ZCAS University recently. By promoting initiatives for skill development, the campaign will significantly improve the availability of skilled labor, empowering MSMEs to tap into the talents and expertise necessary for their growth and success.
Finally, accessing both domestic and international markets has proved a cumbersome hurdle for small business in Zambia. Limited marketing capabilities, lack of market information, and inadequate networking opportunities restrict these firms’ ability to reach customers and expand their customer base. PZC facilitates market access by creating platforms for MSMEs to showcase their products and connect with potential customers and buyers.
As a cross-cutting remedial measure to the aforementioned challenges, PZC plays a vital role in enhancing the brand recognition and reputation of Zambian MSMEs. By highlighting success stories, quality standards, and unique aspects of Zambian products and services, the campaign boosts consumer confidence and trust. This increased trust leads to a higher demand for Zambian products, allowing MSMEs to expand their customer base and increase market share. The campaign’s efforts also contribute to the overall image of Zambian products and services, both locally and internationally, which further strengthens the position of MSMEs in the market.
As I conclude, the MSME sector in Zambia is grappling with several challenges. Nonetheless, the Proudly Zambian Campaign has the power to mitigate these obstacles. By promoting local entrepreneurship, encouraging market access, and enhancing brand recognition, amongst other interventions, MSMEs are empowered to thrive and contribute to sustainable economic development, setting our country on course to truly industrialize and meet our development aspirations.
The Author is an Intern under the Proudly Zambian Campaign of the Zambia Association of Manufacturers
