Calls for extensive formalisation of SMEs

By ZBC Reporter

THE Pan African Chamber of Commerce has called for extensive formalisation of Small to Medium Enterprises.

This follows the conducting of the inaugural Reserve Bank of Zimbabwe SMEs foreign currency auction which saw 40 bidders coming aboard despite this sector constituting a large chunk of local businesses.

Small to medium enterprises are Zimbabwe’s lifeblood in terms of driving economic activity and as such, were given relaxed participatory conditions by the central bank on the second platform of foreign currency auction as they were being crowded out by large entities on the mainstream auction system.

However, the initial auction this Thursday seemed lukewarm, according to statistics, with Pan African Chamber of Commerce Board member Mr Langton Mabhanga attributing this to information gaps as well as low levels of formalisation.

“The initiative by the central bank is a welcome development for local SMEs but we are taken aback by low participation of this critical sector, as this platform will see them getting forex at conventional rates that will support production. Low levels of participation point to the urgent need for education campaigns as well as for authorities to reduce tax requirements for these entities to be able to formalize their operation, he said.

A total of four hundred and sixty thousand United States dollars was disbursed with raw materials claiming almost half of the total amount at the auction system.