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Leake Hangala_ Namibia - SME's in Infrastructure - INTRODUCTION

VIEWS: 330 PAGES: 25

									      Infrastructure Investment Conference

             28 & 29 October 2010 - Nairobi, Kenya


SME’s in Infrastructure - Namibian Experience

                         By
                Dr. Leake S Hangala
                Executive Chairman
                  Hangala Group
Hangala Group Structure
                                         Content




•   Facts on Namibia
•   Namibia SME
•   Policy and institutional framework
•   Challenges facing SME
•   Success stories
•   What is needed for SME success
•   Conclusion
                            Facts on Namibia

•     Independence       21.03.1990
•     Population         2,099,000 (2010 estimate)
•     GDP(nominal)       US$10.480 billion
•     GDP per capita     US$4,135 (2009)
•     Contributors to GDP:
                                      Mining & Energy
                   10.40%


                             6%       Agriculture

                              3.50%   Fishing

    46.60%                            Manufacturing and
                             13.50%   Infrastructure
                                      Tourism


                      10%             Other
                                 Namibia SME’s – GRN Policy


Definition:
   • Micro enterprises:                     0-5    employees
   • Small enterprises:                     6-30   employees
   • Medium enterprises:                    31-100 employees
   • Large enterprises:                     100+ employees

− Promoting regional business development programmes

− Facilitate business linkages between large domestic & foreign firms – SMEs

− Support for commercial institutions supporting SMEs - banks

− Support initiatives to extend public sector contracts to SMEs

− Assistance for SMEs to increase technical & managerial skills through training
  centres
                                   Namibia SME’s




Who is doing what to develop Namibia’s SME sector?
                                      Who is doing what – GRN



• Ministry of Trade & Industry:
  (i) Business Services Support Programme (BSSP) – funds bus. plans & feasibility
  studies, trade fair participation, export promotion, matchmaking activity &
  grants to buy equipment &

  (ii) infrastructure through Namibia Development Corporation (NDC) in form
   of incubation centres & open markets



• Ministry of Finance:
  Procurement of goods & services by public sector – tender preferences
                                               Who is doing what



State-Owned Enterprises:
  Tender preferences – exclusivity in acceptance of bids & pricing
  preferences


• Local Government/Municipalities:
  Tender & general procurement preferences
             Who is doing what – Donors & Academics




• Educational Institutions:

University of Namibia & Polytechnic

 An academic approach that promotes entrepreneurship,
incubation, research & development, & education & training through the
Centre for Entrepreneurial Development (CED) & Namibian Business Innovation
Centre (NBIC)
          Who is doing what – Donors & Academics



• International Donor or Development Community:

  Deutscher Entwicklungsdienst (DED) – Support of a number of public
  and private sector partners by way of a diverse array of public private
  enterprise (PPP) programmes
  German Technical Cooperation (GTZ) – support of a number of public &
  private sector partners through a Partnership for Economic Growth
  (PEG) programme

  European Commission (EC) – various economic capacity building
  programmes
  Others like for example USAID, US Peace Corp, FINAID & LUX-
  Development - various economic capacity building programmes
                Who is doing what – Financial Sector & NGO’s


• Financial sector
  First National Bank (FNB) – Established an SME Bus. Unit to reduce
  bureaucracy & relax security/collateral requirements, credit lines from
  DBN & NORSAD Fund to expand portfolio. Additionally

  Bank Windhoek – Also operates a SME Bus.

  Development Bank of Namibia (DNB) – Wholesale of funds for on
  lending to SME sector through FNB & Bank Windhoek, Developed
  various products including bridging finance & grant scheme


• Non-governmental Organizations (NGOs):
  Various programmes aimed to promote entrepreneurship & migration
  from informal to formal sector
      Who is doing what – private sector (cont.)



• Service providers
  SMEs Compete – Social entrepreneurship firm that provides business
  capacity building support including advisory service, mentorship,
  training for entrepreneur & staff, market access facilitation & marketing
  support generally.

• Namibia Chamber of Commerce & Industry (NCCI)
  National business sector representative body that is a voluntary
  association. Advocacy & lobby role for SME sector & operates an SME
  Help Desk
                Challenges facing SME’s in Namibia

• Access to funding
   – Asset finance
   – Working Capital funding

• Absence of skills
   –   Bookkeeping
   –   Costing & Pricing
   –   Business plans
   –   Marketing
   –   Tendering

• Cost of doing business
   –   Utilities
   –   Transport
   –   Business Registration
   –   Bureaucracy & Laws
                         Challenges facing SME’s in Namibia



•   Open Economy
    – Foreign investment
    – No protection for locals
    – Big corporations

• Absence of business & partnership culture
    –   Historical
    –   Individualist approach
    –   Educational system
    –   Lack of information
    –   Low level of ICT skills
                                                       Success Stories


Micro-to-Mega
Programme developed by SMEs Compete with support of Pupkewitz
MegaBuild (leading building material & hardware supplier). Model that
provides business opportunities for entrepreneurs - outlets where such
services don’t exist
                                          Success Stories (cont.)


Building Contractor Support Programme
Facility created by SMEs Compete that helps builders fund equipment
purchases & eliminate high cost of renting
                                                Success Stories (cont.)


Getting it Right!
Kambwa Trading started & is owned by David. S.
David.

Initially engaged in agricultural services & tractor
repairs but in 2005 ventured into road construction
sector.

Forms strategic alliance with large local & foreign
firms.
                       What is required for SME’s success

• Clear and consistent government SME’s policy and support
 Funding

   –   Tendering
   –   Building of facility
   –   Committed to provide services needed by SME
   –   Encouraging buying local
   –   Lowering the cost of doing business
   –   Encouraging and rewarding big corporates that support SME’s
   –   Reward success and good behavior


• Supportive Big Corporates

       - Source most of its goods and services from SME’s
       - Demand inclusion of SMEs in tenders
    What is required for SME’s success (cont)


 Ensuring that SMEs meet minimum performance standards

   – Pricing
   – Quality of goods and services
   – Assurance and timely delivery


• Corporation and collaboration between and among SME’s
   –   Joint Ventures
   –   Training and Skills development
   –   Marketing
   –   Entrepreneurial development focus
   –   Accelerate participation by black Namibians in main stream
       economy
          Types of Infrastructure



• Construction

• Electrification

• Telecommunication
             Helping Entrepreneurs




Daniel Iihemba of a village near Rundu in the
Kavango Region providing light engineering
service(welding & fabrication) previously only
available 120km away
     Helping Entrepreneurs (cont.)




Oskar Siyoka of Sibinda village near
Katima Mulilo in Caprivi Region provides
battery charging service using solar panel
bought with micro-loan
           SMEs important in our economy


- Largest business grouping in most of our countries

- Self-Employed

- Their money circulate locally

- Potential to reduce unemployment
Thank You

								
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