SMEs want share of State contracts

Small businesses want the Government to save them from the hard business environment by compelling large firms that win tenders from the State to sub-contract to them.

This sentiment was expressed by Kenya National Alliance of Street Vendors and Informal Traders (KENASVIT) Chairperson Anthony Kwache. “We want the Government to cushion small businesses from the current difficult economic period by compelling big government contractors and big businesses to sub-contract small players,” said Mr Kwache.

KENASVIT is dissatisfied with the fact that even though the Kenyan economy seems to be growing consistently, whereby big businesses are declaring profits, small businesses are suffering due to lack of inclusive growth. “Small business owners are experiencing a downturn in business since the beginning of 2016 and it is time the government intervened to save these businesses that provide more than 80 per cent of jobs annually through sub-contracting,” added Kwache.

KENASVIT Business Consultant Kennedy Okumu also stresses that big businesses will always be assured of a sustained supply chain, and reduced cost of production and distribution costs. He said that sub-contracting was the only way to go for small businesses to be empowered to access sizable markets and negotiate favourable payment terms.

“Besides cushioning small businesses, sub-contracting is a quick and easy way to create a multiplier effect that could trigger industrialisation as it has done in other economies such as India, Malaysia, Thailand, and Indonesia,” says Mr Okumu.

KENASVIT argues that to encourage sub-contracting, the Micro and Small Enterprise Authority (MSEA) should work with the corporate sector through private sector associations and other non-State actors to develop a programme that facilitates sub-contracting linkages.