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Inside Southern African Trade (INSAT)

Southern Africa Global Competitiveness Hub

Issue 6, September 2006

SARPN acknowledges the Southern Africa Global Competitiveness Hub as the source of this document:
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Small and medium enterprises (SMEs) are the largest employers and largest contributors to gross domestic product (GDP) in developed and developing nations alike.

According to the UN Industrial Development Organization (UNIDO), “in overall economic development, a critically important role is played by micro, small and medium enterprises which, on average, make up for over 90 percent of enterprises in the world and account for 50-60 percent of employment – in particular in the developing world: SMEs are the emerging private sector in poor countries, and thus form the base for private sector-led growth.”

Southern Africa has seen a number of efforts to promulgate broad and comprehensive policies to advance SMEs. These have had mixed success, and it may be more effective for governments to shift their focus towards creating a better overall business environment that would make it easier for everyone, and especially for SMEs, to flourish.

Despite the challenges, there are encouraging examples of how SMEs are making increasing contributions to economic development and growth. A number of private-sector led initiatives have had great success, and there have been examples of where the market has responded to the needs of SMEs – in particular in the banking sector.

In this issue we explore the challenges faced by SMEs, as well as some success stories, from a number of angles.

We also feature an article that notes the changes in the relationship between the public and private sectors in Tanzania; an article on the recent SADC Annual Summit; as well as our regular sections.

We hope that you will enjoy this issue of INSAT and invite you to share your opinions and suggestions with us by writing to .

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