Government policies and strategies in dealing with challenges confronting small and medium enterprises : a case of Harare, Zimbabwe.

Abstract

This study focuses on the success the Zimbabwe government policies and strategies in addressing the challenges faced by small and medium enterprises (SMEs) in Harare, Zimbabwe. The study was conducted with a view to developing a policy and strategy framework for promoting the development of SMEs in Harare, Zimbabwe. Harare, the capital city of Zimbabwe, was used as a study site. Pragmatism constituted the research philosophy for the study. The study adopted a case study design in which SMEs in Harare were studied. The mixed-methods approach was employed, along with concurrent triangulation. SMEs, officials from the Ministry of Small and Medium Enterprises and Co-operative Development (MSMECD), officials from the Small and Medium Enterprise Development Corporation (SMEDCO) and academics from three state universities in Harare constituted the population under study. The study employed purposive and stratified sampling techniques. Stratified random sampling was employed, in which the SMEs were divided into three strata: primary, secondary and tertiary. Purposive sampling was used to select the officials from the MSMECD and SMEDCO, as well as the key informants from three state universities in Harare. The study used a sample of six business advisors from SMEDCO and another six from the MSMECD. A sample of 382 SMEs was selected for the collection of empirical data using questionnaires. Of the 382 distributed questionnaires, 344 were returned, representing a response rate of 90 %. Primary data was gathered using questionnaires and in-depth interviews. Questionnaires were administered to the SMEs, while in-depth interviews were conducted with the officials from SMEDCO and the MSMECD, as well as key informants from the three state universities. Documents were employed as secondary sources of data for the study. The quantitative data collected through the questionnaires was analysed using descriptive and inferential statistics. The data was presented using figures, tables, graphs, pie charts, and percentages. The IBM Statistical Package for Social Sciences (SPSS) version 21 was used to analyse the quantitative data. SPSS was also used to calculate the Cronbach’s alpha. The alpha coefficient ranged from 0.729 to 0.878, indicating that the questionnaire was a reliable data collection instrument. Content analysis was employed in the analysis of the qualitative data gathered from the in-depth interviews. The intention was to achieve an adequate and detailed analysis of the data in order to obtain sufficient information relating to the challenges faced by SMEs in Harare, the vii government policies and strategies employed to address these challenges, and the success of the policies and strategies. The findings of the study showed that SMEs in Harare are confronted with challenges which include limited access to funding, limited access to markets, a lack of technical and management skills, antiquated machinery and equipment, increasing competition in the market, infrastructural challenges, and restrictive government laws and regulations. It was empirically confirmed that the government responded by creating partnerships with the private sector, non-governmental organisations, and other countries in the provision of funding, training and technology transfer. The study also revealed that the government promoted SME access to markets through participation in local and international trade fairs, business expos, and exhibitions, as well as facilitating SME involvement in public procurement. The government also imposed import duties to protect domestic businesses from foreign competition. Higher education institutions, which constitute part of the government’s overall strategy of promoting SME growth, have been instrumental in addressing SME challenges. However, despite its various policies and strategies, the government of Zimbabwe, on the whole, has not been successful in addressing the key challenges confronting the SME sector in Harare. This study builds on and broadens the current knowledge on the success of government policies and strategies in addressing SME challenges in Harare, Zimbabwe. Furthermore, the study proposes a policy and strategy framework for promoting the development of SMEs in Harare, Zimbabwe.