Achieving National Development Goals through SMEs

One of the most viable strategies to achieve national development goals in both developing and developed nations is to promote SMEs. This sector accounts for 55% of GDP in developed economies and 35% in developing economies, said the Minister of Business, Enterprise and Cooperatives, Mr Soomilduth Bholah, this morning at Le Meriden Hotel in Pointe aux Piments.

The Minister was speaking at the opening of a workshop on Rules of Origin, Business and Export Development in the context of a project entitled ‘Strengthening Export Competitiveness for inclusive growth in Mauritius, especially with regard to the implementation of the IEPA’. The Secretary for Foreign Affairs (SFA) at the Ministry of Foreign Affairs, Regional Integration and International Trade, Ambassador Mrs Usha. Dwarka Canabady; the Charge d’Affaires, of the Delegation of the European Union to the Republic of Mauritius and to the Republic of Seychelles; and the Representative of TradeCom, Ms Paula Hippolyte-Bauwens, were also present.

In his address, Minister Bholah pointed out that African countries are bound to rely on SMEs to provide employment for their growing working age population as the number of new entrants into African labour markets increase, from 23 million a year in 2015 to an expected 32 million a year in 2030.

He recalled that, whatever the incentive framework set up by successive governments for SMEs, the Mauritian market, like those of most Small Island Developing States, is restricted. The sector will undoubtedly fail if no action is taken to enhance the business environment for exporting SMEs and to promote exports, cautioned Mr Bholah. According to him SMEs often deplore the detrimental effects of global trade on their business activity. On that score a change of perspective is necessary given that trade agreements now have to be viewed as opportunities to be seized, he pointed out.

The Minister also spoke of Government vision in transforming Mauritius into a strategic hub for international trade. High growth potential of SMEs as advocated by the SME Master Plan launched in 2017 will assume a greater role in the economy over the next ten years, he said. The sector, Mr Bholah pointed out , presents unique opportunities to create quality jobs, diversify and democratise the economy, leverage innovation and increase export earnings. Increasing market access and exports by providing SMEs with intelligence, market development supports and logistics to integrate the global supply chain are among the main objectives of this roadmap for the sector. Our ambition is to increase current exports from about 3% to about 18% by 2026, he added.

For her part, the SFA, Mrs Dwarka Canabady, outlined that in Mauritius, SMEs contribute about 40% of GDP and represent about 54.6% of total employment. Their contribution to exports however still remains at 3% and this should be matter of concern, she recalled. The question that should be addressed is how to support SMEs in developing not only export readiness, but also crossing the barrier, and finally entering into regional and international markets, she added.

There is no point in opening markets if those markets are not going to be avail of and the real test is not the opening of markets but whether small businesses which constitute of 40% of GDP will be able to cross that barrier from the domestic market into the regional market and into the international market, SFA said. She listed out incentives and initiatives undertaken by Mauritius over the years to promote SMEs, which include Leasing equipment modernisation scheme; fiscal incentives; and risk guarantee scheme; as well as the creation of SME Mauritius which provides tailor-made solutions.

Workshop’s Agenda

The two-day workshop is organised by the Ministry of Foreign Affairs, Regional Integration and International Trade, in collaboration with TradeCom. Presentations are focusing on the following: Manual on Rules of Origin; Business and Export Development; and Debrief on Project Implementation. An information session on the Economic Business Information Centre is also being held.

Mauritius obtained assistance from the TradeCom II Programme under the ACP Trade Capacity Building Programme, funded by the EU on the Project ‘Strengthening Export Competitiveness for inclusive growth in Mauritius, especially in the context of the IEPA Implementation’. The Project is being executed by a group of Consultants from Landell Mill ltd, a company based in London.

Project objectives

The goals are to assist Mauritius in enhancing its business environment for exporting SMEs and promoting exports on the EU market. Some 32 SMEs, engaged in different economic sectors, are benefitting from the assistance.

The elaboration of a manual on Rules of Origin also forms part of the project. The manual is meant to assist SMEs in Mauritius to determine whether their goods originate in Mauritius under the EU-ESA, COMESA FTA and SADC FTA.

Source: Government of Mauritius