By Bahle Gama
As Micro, Small, and Medium Enterprises (MSMEs) continue to grow in the country, they contribute towards the gross domestic product (GDP).
According to the FinScope MSME survey for 2023 published in early May 2024 by the Centre for Financial Inclusion (CFI), MSMEs in the country have an estimated turnover of E1.2 billion (US$68 million) monthly.
They contribute over E582 million (US$32 million) to the GDP. This, however, is a decrease compared to 2017 when MSMEs contributed over E1.6 billion US$90 million.
This decrease was due to the effects of the Covid-19 pandemic among other things.
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The purpose of the survey was to assess the size and scope of MSMEs in Eswatini, to describe the levels and landscape of access to financial products and services (both formal and informal) as well and to track the level of financial access since 2017,
Identify the most binding constraints to MSMEs development and growth with a focus on access to financial markets and the drivers and barriers to financial access for MSMEs.
Further, to identify and describe different market segments with specific development needs in order to stimulate segment-related product innovation.
According to the survey, MSMEs have increased to 67,795 from an estimated 59,283 business owners in 2017. These employ over 92,000 people with 44,000 being full-time and over 5,000 part-time employees, as well as 8,422 seasonal employees.
33,195 business owners consider themselves employees.
CFI Acting CEO James Manyatsi stated that the growth in MSMEs is significant and encouraging because it means emaSwati are venturing into business which will in turn, contribute to the economic growth.
“However, we have seen a decline in MSMEs using bank services and we are yet to establish the cause. We have also noted the impact of the Covid-19 pandemic as well as the Russia/Ukraine war.
Some businesses are still lacking in some aspects, and require assistance to grow” he said.
He further stated that these businesses are still lacking and require assistance in growing their businesses.
According to the survey, 16 per cent of MSMEs were classified as essential services during the Covid-19 lockdown period.
Four in five MSMEs considered the pandemic to have had a negative NETT impact on their business while others considered it positive or no major impact.
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57 per cent of MSMEs were affected by the political and social unrest, in that 80 per cent of MSMEs considered the political and social unrest to have had a negative NETT impact on their business.
The banked business owner population also decreased to 52 per cent, largely driven by transactions of about 96 per cent, while bank account access decreased among the business owner population.
Meanwhile, usage for business purposes was higher with only 26 per cent of the banked business owners having the account in the business’s name.
An additional 25 per cent of business owners use over-the-counter (OTC) bank wallet services.
On another note, 94 per cent of MSMEs use some form of technology in their business.
The use of basic technology in business is driven by the ownership of the cell phone which gives access to communication and social media platforms for business.
Excluding cellphone usage, 23 per cent use some technology to run their business. Productivity technologies such as machinery that improve efficiency, for example, computers have low usage.
At the beginning of 2020, the government of Eswatini declared 2020 the year of Micro, Small Medium and Enterprises (MSMEs).
Corporate tax rate was cut from 27 per cent to 12 per cent, a bold step on the part of the government in creating employment through entrepreneurship and committing investment in the growth of SMEs.
