Small to Medium Enterprises (SMEs), which contribute an estimated 40% to the country’s total gross domestic product, are reeling from lack of access to funding and export documentation.
These teething problems are suffocating expansion, players have said.
In his 2014 national budget, Finance minister Patrick Chinamasa said the old economy was dead and a new one had been born, urging financial institutions to support small to medium-sized enterprises.
SMEs who spoke to businessdigest feel the parent ministry is not doing enough to facilitate the sector’s growth as access to finance and export documents to European markets remain a pipe dream.
Organo Seven (OS) managing director David Mukomana decried lack of commitment from the parent ministry as well as Zimtrade in expediting the process of obtaining the export certification for SMEs.
“The other problem is on European Union certification.
Honey and bees wax is considered animal products. We require listing to export to the European Union.
I got an order in March this year to export bees wax to the EU market but the issue of certification is frustrating us,” he said.
Mukomana said his company got an order to export 50 metric tonnes of bees wax to Denmark and Canada by December but the certification process in an abstacle.
According to Mukomana, who buys honey from farmers dotted across the country, there is growing interest by companies in EU especially from the United Kingdom to import honey from Zimbabwe because of its organic nature.
OS is a member of the Zimbabwe Organic Producers and Processers Association — a grouping that brings together organic producers, promoters and processors for the development of organic agriculture in Zimbabwe.
“The first challenge is the issue of financing, as an SME that’s the biggest challenge. If we had access to affordable finance, we would be able to make our products readily available. The funding is expensive and is not enough,” he said.
Zimbabwe hosted the 4th Apiculture Expo Africa last October which raised bee keeping awareness in the country the practice is now attracting more interest in the country.
Honey industry contributes more than US$200 billion to the global economy through crop pollination and production of honey and beeswax among other products.
Economist Kipson Gundani said it was saddening that local institutions were failing to remove hurdles for SMEs, support and build their capacity.
“One would have thought that access bottle necks are at the European end and not here.
However, this may suggest that we have a weak institutional and regulatory environment and lack support to build capacity of small firms,” he said.
“The only economically sensible reason for restricting exports is when the product is a necessity and is in short supply at home of which I doubt if that is the case with honey.”
OS has the capacity to process 10 tonnes of raw honey into 1 tonne of bees wax.
Other apiculture products are honey, propolis, pollen, royal jelly and bee venom.
By 2018, OS intends to be a fully-fledged bee keeping firm with a commercial farm consisting of up to 5000 hives.
Ethiopia’s export values of honey- Africa’s largest exporter of honey have increased significantly rising from a value of US$13 634 in 2003/4 to US$900 000 in 2009/10.
Tripple Plus Jewellery, a local SME which designs and manufactures jewellery is struggling with huge overhead costs.
Company’s managing director Melody Siziba said access to loans from the ministry of SMEs is characterised by nepotism as the same people benefit every year.
“Every year the same people get funding through banks and SMEs. You submit your paper work and you are told there is no money. We end up being fed up,” she said.
Siziba blasted Zimbabwe Revenue Authority officials (Zimra) for not co-operating when it comes to tax clearance, saying they resort to harassment, thereby scaring away clients.
The company has the capacity to manufacture 500 units of jewellery per month but is suffocating from cheap imports and lack of fresh capital.
The company gets gold to manufacture jewellery from Fidelity Printers and Refinery as well as from its gold claims in Umzingwane and Esigodini.
Siziba said the firm requires fresh capital of US$100 000 to replace the old machinery to increase capacity.
As big corporates are struggling to stay afloat, SMEs are the new economy estimated to be employing 5,7 million people.
Summerrand Alternative Energy, a dealer of domestic solar and electrical installations, said despite a huge demand for solar products access to capital is stifling business growth.
“We don’t have access to loans because we don’t keep money in the bank.
All the money is spent on goods. It’s still a challenge,” Summerrand said.
Summerrand provides solar street lights, solar panels, invertors, biogas and solar tiles mainly imported outside the country.
“Duty is unfavourable. Even though Zimra has exempted some goods, it is still expensive. Price we give to the last person will be expensive,”added the company.
CBZ Holdings last month unveiled a US$10 million facility to stimulate and support growth in the SMEs and for micro finance sectors to try and tap into the SMEs market.
Under this facility, loans ranging up to US$100 000 per project, will attract an interest rate of between 6% and 12%.