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MSMEs best bet to revive economy in post-COVID-19 era

By Bernard Ngore | September 3rd 2020 at 14:54:08 GMT +0300

Eng. Bernard Ngore chairman Kebs Board

Micro, Small, and Medium Enterprises (MSMEs) can have a significant function in improving production capacity and build the economy and social resilience for any country.

In Kenya, the MSME sector created 840,600 new jobs in 2018 and contributed up to Sh3.37 trillion out of Sh9.97 trillion, Gross Domestic Product which was 34 per cent of GDP.

Statistics from the Kenya National Bureau of Statistics (KNBS) also indicate that in the same year, the informal sector, which accounted for 83.6 per cent of the total employment, created 762,100 new jobs. This made the sector the biggest contributor, as MSMES are embedded in all economic drivers such as tourism, agriculture, and manufacturing.

Although the economic growth and employment experienced a significant slowdown as a result of the Covid-19 outbreak, the pandemic presents an opportunity to build back better with the support of MSMEs to strengthen Kenya's production capacity.

This will propel the sector to the center stage of Kenya’s economic development and social stability through job creation and poverty eradication in a post COVID-19 era.

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It is said that reward sweetens labour. That is why it is refreshing that the government, through the Kenya Bureau of Standards (KEBS,) has unveiled support programs with its development partners that include UNIDO, The European Union and the World Bank specifically targeting MSMEs.

In furtherance of the aspirations of the Kenya Vision 2030 and the Big Four Agenda, Kebs through its National Standards Council has approved an MSME policy that aims to provide a coordinated approach to support the MSE agenda.

This according to KEBS Board will provide timely, accessible, and affordable services through a prioritisation approach that promotes innovations, market access, and emerging technologies amongst the MSMEs.

With the Africa Continental Free Trade Agreement (AfCFTA) coming into force and with our locally produced goods already facing competition from a barrage of imports especially from China, it comes as a breath of fresh air that KEBS has rolled out a robust strategy aimed at supporting the MSME sector to attain the necessary standards to make them competitive locally and beyond.

In a post-COVID-19 era, it is such creative solutions that will make it easier for Kenyan MSMEs to produce quality goods that can compete in the market of 1.2 billion people that will be opened up once AfCFTA is in place by January 2021.

Quality is never an accident, it is always the result of high intention, sincere effort, intelligent direction, and skilful execution. It represents the wise choice of many alternatives and by Kebs positioning itself to contribute more in promoting the MSME sector, the government has made one such choice.

With the government turning to incubation centres in order to cushion the economy against job losses as a result of the pandemic, the MSME sector in Kenya is bound to grow rapidly. This calls for the timely development of standards, the use of appropriate methodologies for delivery of standards as provided for in the Standards Development procedures, review of Product Certification cycle time, and turnaround time to be able to meet the needs of these MSMEs.

If there is one thing that the coronavirus pandemic has taught us, it is the fact that technology can play a great part in keeping the economy running while keeping people safe. That is why it is imperative that MSMEs are enabled to tide-over the problems of technological backwardness and enhance their access to new technologies.

Among the measures, Kebs in co-operation with other stakeholders in the national innovation ecosystem intend to put in place to give Kenyan MSMEs the technological edge are the adoption of ICT and adaption to the digital revolution. This shall include exploiting opportunities for the ongoing digital revolution like cloud computing and data analytics to improve efficiency.

Kebs also plans to upgrade workforce skills in MSMEs in order to support both the generation of new in-house innovation and the absorption of new knowledge sourced through collaborations with external partners while ensuring that the Research and Development policy is inclusive of MSMEs.

Access to finance is another main challenge facing MSMEs and especially at the startup level. The MSME sector is disadvantaged in comparison to larger businesses due to their comparatively higher costs of compliance.

The fact that KEBS shall provide negotiated discounted rates and charges for the MSE sector will go a long way in jumpstarting the economy from the effects of the pandemic. All costing structures for services offered by KEBS to the MSE sector shall provide differentiated costing.

You cannot cure a new malady with old remedies. The coronavirus pandemic has exposed sections of the soft underbelly of our MSME sector and failure to address the problems revealed would be letting a crisis go to waste. By paying special attention to the MSME sector, KEBS is setting the standard in setting standards.

The author is the Chairman of KEBS Board


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