Reconsider SME policy


THE Marape-led Government should be commended for seriously taking the small to medium enterprise (SME) plan developed by the previous government and implementing it with significant capital injection of K200 million.
This is one of the best intervention policies since Independence.
It has the potential to change the lives of aspiring Papua New Guinean businessmen and women in rural and urban areas of the country.
However, to achieve the expected policy outcomes of developing 500,000 SMEs by 2030 and subsequently creating 2 million local jobs, there needs to be improved co-ordination among all relevant government agencies and stakeholders.
Multi-stakeholder collaboration should be encouraged to establish a well-integrated approach to this policy’s delivery and outcomes.
At the moment, there are a number of problems which need to be addressed prior to further capital injection this year and moving forward:
l THERE is no uniformity in SME classification among the Department of Trade, Commerce and Industry, Investment Promotion Authority (IPA) and external stakeholders such as the banks. The Internal Revenue Commission has taken the initiative to classify SMEs for tax purposes and other mentioned stakeholders should work with the commission to achieve uniformity for the purpose of resource allocation and credit limits on capital distribution;
l MOST districts do not have the capacity to provide ongoing management support from small business registration with IPA to opening bank accounts, therefore, most people, especially rural Papua New Guineans, are left carrying a registered business certificate till it expires in a year with no business conducted; and,
l IN the public domain, there is no known supporting government policies that complement this policy.
Are there policies that support SMEs with export driven ambitions to supply gemstones, eagle wood, fresh seafood and other products?
Are there policies that support import substitution SME activities such as tailoring for women so that the country can stop importing cheap clothes?
The multiplier effect of implementing such a policy has wide-reaching consequences and so if managed using an integrated approach with improved multi-stakeholder collaboration, it has the potential to transform the socio-economic landscape of PNG in the coming years.
If it is implemented using current roll out system, this policy may deliver 500,000 SMEs by 2030 but most of them would only be statistics on databases, without any sustainable SMEs and without the 2 million jobs projected.

M Kawa,
Rural Empowerment Services,