Factors affecting the growth of micro and small manufacturing enterprises in Botswana

Moaisi, Dulu (Stellenbosch : Stellenbosch University, 2005-12)

Thesis (MBA)--Stellenbosch University, 2005.

Thesis

ENGLISH ABSTRACT: Micro and small manufacturing enterprises are linked to the reduction of poverty, unemployment, economic revamping and diversification of economic activities that add value. Previously, government policies totally excluded MSEs, in favour of large industries, which for now, in most countries have not been able to meet economic objectives. Realising the contribution advanced by MSEs, countries have come up with attempts to have well-established small industry sectors. Governments in different countries have started to develop strategies and modalities to develop, strengthen, and sustain the sector. In general terms the MSE manufacturing sector is characterised by a number of constraints, for example lack of capital, lowly educated entrepreneurs, non-availability of skills, and technological know-how. As such countries are faced with a daunting task of addressing these constraints to promote the MSE sector. The Botswana government, like other countries, has had policies and initiatives since 1982 to support the sector. This is due to the fact that the country embraces the fact that the sector can be a solution to the growing unemployment and economic diversification, which are the country's long-term objectives. Developing MSEs requires having a more proactive strategy and an enabling environment for the prosperity of the sector despite a number of hurdles associated with their development. All countries have institutions to support their MSEs by advancing financial and non-financial initiatives, embedded in MSE pOlicies or the general industrial policy_ What is important is that any initiative undertaken should be collaborated with the rest of the existing economic system to have a holistic institutional discipline, with the aim of achieving the desired economic objectives. Countries continuously re-shape and re-design their strategies to suit the changing economic environment. It is clear that there is no one and for all strategy universally available to address constraints associated with the MSE manufacturing sector for different countries. Individual countries have got to design their strategies in accordance with their existing economic environment, expected benefits from the sector, and objectives. It is therefore not surprising that the government of Botswana, after several attempts to solely support the MSE manufacturing sector, financially and non- financially for more than twenty years, now acknowledges that it has to collaborate with the private and parastatal organisations to have an effective and efficient support system in place. The government has previously experienced a number of setbacks when solely promoting the sector. In most cases the country's manufacturing MSEs had very short life spans. This resulted in loss of jobs and far much less than expected contribution to the overall economy. The study also highlights strategies that the government of Botswana can consider to avoid having an exodus of MSEs that are not sustainable.

AFRIKAANSE OPSOMMING: Mikro en klein ondernemings (MKOs) in die vervaardigingsektor word deesdae in verband gebring met die vermindering van armoede, werkloosheid, ekonomiese vernuwing en die diversifikasie van ekonomiese aktiwiteite wat waarde toevoeg. In die verlede het regeringsbeleid MKOs heeltemal uitgesluit ten gunste van groot ondernemings wat tot nou toe nog nie in staat was om in die meeste lande ekonomiese doelwitte te bereik nie. Lande het egter mettertyd besef watter bydrae MKOs kan lewer en het pogings aangewend om gesonde kleinsakesektore te vestig. Regerings in verskillende lande het begin om strategiee en modaliteite te ontwikkel om hierdie sektor te ontwikkel, te versterk en in stand te hou. Die MKO-vervaardigingsektor word oor die algemeen gekenmerk deur 'n aantal beperkinge, byvoorbeeld gebrek aan kapitaal, swak opgeleide entrepreneurs, gebrek aan vaardighede en tegnologiese kennis. Hierdie lande staar die taak in die gesig om aandag aan hierdie beperkinge te skenk ten einde die MKO-sektor te bevorder. Die regering van Botswana, soos ook in ander lande, het sedert 1982 beleid en inisiatiewe ontwikkel om hierdie sektor te bevorder. Dit kan toegeskryf word aan die feit dat hierdie land erken dat die MKO-sektor die oplossing kan bied vir groeiende werkloosheid en ekonomiese diversifikasie wat deel uitmaak van die land se langtermyndoelwitte. 'n Meer proaktiewe strategie en 'n bemagtigende omgewing is nodig om MKOs te ontwikkel vir die welvaart van die sektor, ten spyte van 'n aantal struikelblokke wat met hul ontwikkeling verband hou. Die meeste lande het instellings om hul MKO's te ondersteun deur die aanmoediging van finansiele en nie-finansiele inisiatiewe, vasgelê in MKO-beleid of die algemene nywerheidsbeleid. Wat van belang is, is dat enige inisiatief wat onderneem word, in samewerking met die res van die ekonomiese sektor gedoen word ten einde 'n holisties-institusionele dissipline te ontwikkel sodat die verlangde ekonomiese doelwitte bereik kan word. Lande pas gedurig hul strategiee aan en herontwerp dit om by die veranderende ekonomiese omgewing aan te pas. Dit is duidelik dat daar nie 'n universele strategie bestaan om die beperkinge aan te pak wat met die MKO-vervaardigingsektor in verskillende lande verband hou nie. Individuele lande moet hul strategiee ontwerp ooreenkomstig hul bestaande ekonomiese omgewing, die verwagte voordele van die sektor, en hul doelstellings. Dit is dus nie verrassend dat die regering van Botswana, na verskeie pogings oor 'n tydperk van meer as twintig jaar om op hul eie die MKO-vervaardigingsektor finansieel en niefinansieel te ondersteun, nou erken dat hulle met privaat en semistaatsorganisasies moet saamwerk om 'n doeltreffende en doelmatige ondersteuningstelsel daar te stel. Die regering het voorheen 'n paar terugslae beleef toe hulle die sektor op hul eie wou ondersteun. In die meeste gevalle was die lewensduur van die land se MKOs in die vervaardigingsektor van korte duur. Dit het gelei tot werksverlies en geen of min bydrae tot die algehele ekonomie. Hierdie studie beklemtoon ook die strategiee wat die regering van Botswana kan oorweeg ten einde 'n uittog van MKOs wat nie volhoubaar is nie, te verhoed.

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