SMEs not exploiting Agoa, says official

A communication gap between the government and traders is to blame for failure of small businesses to drive economic growth.

Director of Industry, Mr Erastus Njuki, accused SMEs of failing to seek technical help from relevant government agencies on how to exploit opportunities under the African Growth Opportunities Act (Agoa).

He was speaking at a seminar for women-owned SMEs in Nairobi on Wednesday where quality packaging was top on the menu. Packaging, especially of foodstuffs, is a sensitive issue due to the double effect of visual and safety issues.

International standards
Kenya Bureau of Standards vets products using regulations set by the International Organisation for Standardisation (ISO), the international body that sets quality standards for goods and services.

This is usually expensive for SMEs but Eva Oduor, Kebs’ general manager for standards development, said that this should be approached as a quality investment.

“It will cost you extra but the pay will also be extra,” she said.

But there was good news when Mr Njuki followed up on the government’s proposal to reserve some of its tenders for SMEs as proposed in this year’s budget. “We are acting on reviewing the Procurement Act to include SMEs,” he said.

Formulate regulations
Finance minister Uhuru Kenyatta had earlier directed the Public Procurement Oversight Authority to formulate regulations that would enable SMEs compete for lucrative State contracts in this year’s budget.

This year, all 210 constituencies will receive approximately Sh90 million through the Constituency Development Fund and SMEs have the first priority to access these funds.

Mr Njuki also revealed that SMEs are not exploiting the money that they were allocated through the Women’s fund with 80 per cent of the funds remaining underutilized. This is limiting the State’s effort at implementing its development blueprint known as Vision 2030.