- There is further need to invest in infrastructure development to improve transportation, logistics and communication networks for SMEs.
- This will reduce the cost of doing business and facilitate the movement of goods and services, according to the experts.
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The prevailing tough operating environment occasioned by heightened taxes and currency volatilities is taking a hit on Small and Medium-sized Enterprises in the country, industry experts now say.
It is on this basis the experts say the enterprises should shift their antennae more towards the global market to remain in business for longer.
They note that a huge potential for SMEs growth now lies in global competitiveness and export venture niches.
They spoke during Britam’s inaugural stakeholders forum in Nairobi, a platform that seeks to empower Kenya’s SMEs with insights on taxation and macroeconomic issues for informed decisions towards expansion and growth.
Agriculture commercialisation and public-private support for the enterprises' development are other key areas that SMEs were urged to prioritise.
According to Joyce Njogu, head of consulting and business development at the Kenya Association of Manufacturers (KAM), agribusiness holds a huge potential for Kenyans, but the country has not commercialised it enough.
“We need to make our growth ambitions big through innovations and commercialising the sector. There is a lot of value we can add to the agricultural sector but we lack ambition,” Njogu said.
She gave an example of the country’s tea sector, saying Kenya exports its tea at a cost of about $2,500 (Sh383,000) per tonne, a value she says is way below global benchmarks such as Japan which exports a tonne of tea at about $25,000 (Sh3.8 million).
“To help SMEs in such sectors, we need to open up the markets. The main challenge is that we have been made to think locally and not both regionally and internationally,” Njogu added.
Britam CEO Tom Gitogo concurred Njogu’s sentiments saying there is need to support especially young enterprises in areas such as access to affordable financing through government-backed loan programs, partnerships with financial institutions, and the development of alternative financing mechanisms.
"There is further need to invest in infrastructure development to improve transportation, logistics and communication networks for SMEs across the country. This will reduce the cost of doing business and facilitate the movement of goods and services,” Gitogo said.
Commenting on the tax environment, consulting firm PwC Kenya, said taxes are inevitable and Kenyan SMEs should not think of evading paying taxes because the system will eventually catch up with them which could then jeopardize their operations.
Britam’s SMEs stakeholders comes at a time when small businesses in the country are facing a myriad of challenges including the inability to access finance and markets, as well as the high cost of doing business that has seen many of them closing down shop.
Last year, the Communications Authority of Kenya (CA) noted that close to 80 per cent of SMEs often die within the first year of operation, while only three to five per cent make it beyond the one year period of survival.
“The remaining 15 per cent fall under the unpredictable category, who still have very low chances of survival,” CA said.