Export promotion for small and medium sized enterprises in Eritrea with focus on information provision, financing and network of main factors.

Abstract

The aim of this study was to evaluate the export promotion services of Eritrea according to the theories presented in chapter two and come up with recommendation suitable to the Eritrean case. It was found that national export promotion policies would not provide any benefits or lead to increased exports if they are not supported by export promotion policies and programmes at the industrial and enterprise level. Although the Eritrea's national economic policy states 'it is aimed for export-oriented growth', nothing has been done to upgrade the competitiveness of SMEs or increase their exports. The main reason is the unavailability of the export promotion programmes and policies at the industrial and enterprise level. The elements of export promotion services include information provision and export finance assistance. Export information is crucial to the growth of exports of SMEs. Export finance is aimed at providing the financial and insurance needs of exporting firms. The main goals of Export Promotion are to contribute to overall economic improvement of a country, and the subsequent increase for the standard of living of the population. This is achieved through increased export of the country's products. SMEs in Eritrea are facing many interrelated problems. Given their great contribution to the economy and the opportunities available in the world market, motivating them through export promotion and other services could be the best way to make them competitive. In this regard the following three points are recommended as the best ways of enhancing the competitiveness of SMEs. First the Ministry of Trade and Industry (MTI) should have to have a general policy framework as well as programs specifically designed for SMEs development, which could serve as a general framework and a reference for policies and development efforts targeting SMEs. Second the MTI should establish and implement a strategy for SMEs export promotion aimed at increasing the SMEs export through the provision of necessary services. Finally firms themselves should also develop more responsive and proactive management, skilled labour, advanced equipment, and efficient production and marketing plans in order to withstand competition at home and abroad.