There is a dearth of research on the evaluation of the policy and strategy framework for SMEs in Zimbabwe with most studies highlighting the opportunities and challenges associated with this sector (Munanga, 2013:377; Mashanda, 2012:13; Zimbabwe Institute, 2007:22). Munanga
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(2013: 377) researched on the key success factors for sole trader retailer growth in a multi- currency Zimbabwe. The Zimbabwe Institute (2007:22) conducted a study on the several steps that have to be taken by the Government of Zimbabwe to promote economic growth.
Research conducted on SMEs has mostly focused on the contributions of SMEs to the economy which include poverty alleviation, employment creation and economic development (Chipangura and Kaseke, 2012:45). Most of the research on government policy has been conducted by the OECD and focused primarily on its Eastern Partner (EaP) countries which include Belarus, Ukraine and Moldova (OECD SME policy Index, 2012:1). The evaluative study of SMEs in the Balkans aided in the conceptualisation of the OECD SME Policy Index 2012 (2012:1) which is a tool to support policy makers in tapping the full potential of SMEs.
Research on SMEs in Zimbabwe has placed little emphasis on government policy and evaluation of policy implementation. Zindiye, Chiliya and Masocha (2012:655) conducted a study which assessed the impact of government and other institutions’ support of SMEs in the manufacturing industry. Though the study addresses some policy issues, its main focus was on the support that the government has offered to SMEs and in so doing fails to attend to the tenets of the policies.
Little focus was given to the National Policy and Strategy Framework on SMEs. This current research will therefore concentrate on government policy and its implementation with the focus being on SMEs across different sectors of the economy.
Carter and Wilton (2006) conducted a study entitled “Don’t blame the Entrepreneur, blame the Government: The centrality of the government in enterprise development, lessons from enterprise failure in Zimbabwe.” A deduction of the title shows that government is the driving force for entrepreneurship in Zimbabwe. Carter and Wilton (2006) argue that the failure by government to address the environmental factors leads to the failure of enterprise development.
In this light the responsibility for the propagation of SMEs lies with the government as it has the capacity to influence the environment in which they operate. In influencing the environment Carter and Wilton (2006) are of the view that only government is better suited to influence the financial, education and training, legal and regulatory, political and economic environments whose effects affect environment development.
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Research on the impact of government support on small business growth and development in Zimbabwe found out that although the government identified entrepreneurship development as a major route with which to achieve economic growth and development government’s support has remained minimal (Maseko, Manyani, Chiriseri, Tseka, Mugogo, Chazuza and Mutengezanwa, 2012:51). The study also found that despite government targeted support there still remains stunted growth and sluggish development of SMEs (Maseko et al., 2012:51). However the Maseko et al study pays little attention on the evaluation of the National Policy and Strategy for SMEs which is the mainstay of the current study. Although the study discusses the government’s failure in supporting SMEs it fails to highlight the objectives and strategies of the Zimbabwean government in the development of SMEs. This study will, therefore cover this niche as it aims to evaluate the government’s efforts at small business development.
Several research studies in Zimbabwe addressed the challenges faced by the SME sector.
Gombarume and Mavhundutse (2014:103) carried out a research on the challenges faced by SMEs due to political uncertainty which include the reluctance of financial institutions to extend loans to SMEs. Bukaliya and Hama (2012:57) studied the challenges affecting informal business funding in Zimbabwe. While the study by Bukaliya and Hama (2012:57) identifies most of the challenges that retard the growth of small businesses little attention is given to the Policy and Strategy Framework on SMEs in Zimbabwe which will be focused on in this study.
A study by Chimucheka (2012:10391) ascertains the impediments to youth entrepreneurship in Zimbabwe’s rural areas. Among the findings was the fact that insufficient and unreliable government support acts as a major impediment to enterprising youth in rural areas (Chimucheka, 2012:10393). This was also part of the findings in Muzari and Jambwa’s study on constraints to SMEs development. The study found that legal and regulatory frameworks are an impediment to the development of small businesses (Muzari and Jambwa, 2012:1708).
Government has the power to influence the legal and regulatory framework and its failure to make the framework conducive to business shows government insufficiency. Entrepreneurial youths are impeded by government’s failure to support them as well as failure to create a business that is friendly to entrepreneurs.
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Although the aforementioned studies uncover the fact that government is crucial to the development of SMEs there is a gap in exploring the Government of Zimbabwe’s Policy and Strategy Framework on SMEs. This study is therefore necessary as it covers this niche by evaluating the government’s support for SMEs in Zimbabwe through its national policy on SMEs. The National Policy and Strategy for SMEs in Zimbabwe (2002:4) was institutionalised to facilitate an environment in which SMEs can develop. However, in spite of this policy SMEs are faced with challenges which are blamed on the government (Gombarume and Mavhundutse, 2014:105). An evaluative study will therefore show the extent to which the government implemented the policy in an attempt to ameliorate the identified challenges.
Gangata and Matavire’s 2013 study focused on determining the challenges facing SMEs in accessing finances from financial institutions. In their study Gangata and Matavire (2013:3) found that SMEs have difficulties in accessing funding from financial institutions, chief among the reasons being the provision of collateral security. Gangata and Matavire’s (2013) study is similar to that of Chipangura and Kaseke (2012:49) which also determined that most SMEs fail to access finances due to the lack of collateral. This study however is an evaluation of the policy that provides a framework for the conduct of SMEs in Zimbabwe. The Gangata and Matavire (2013) study focuses solely on funding constraints but the current study will cover all the areas that are addressed in the policy document.
Karedza, Sikwila, Mpofu and Makurumidze (2014:38) conducted a research in Chinhoyi, Zimbabwe which analysed the obstacles to the success of SMEs. The study hypothesised that lack of information, infrastructure and a hostile regulatory environment are some of the problems hindering the progress of SMEs. The Karedza study (2014:38) also found that small businesses find it advantageous to stay informal so as to avoid paying taxes and complying with other regulations. To this end Ngwenya, Sibanda and Chitate (2014:1) conducted a study that attempts to establish the challenges of non-tax compliance among SMEs. Like Karedza et al. (2014), Ngwenya, Sibanda and Chitate (2014:1) found that because of the complexity of the tax system and economic factors failure to comply with the tax system is easier for SMEs.
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Chigwenya and Mudzengerere (2013:4) carried out a study of government policy on SMEs but focused on the steps taken to mainstream the informal sector in urban local authorities. The study acknowledges that businesses in the informal sector are exempted from taxes as well as regulations by national instruments that control the operations of companies (Chingwenya &
Mudzengerere, 2013:5). This current study, on the other hand focuses on enterprises that are formal and SMEs are differentiated by the fact that they are registered and can therefore be affected, positively or otherwise, by government policy thus enabling an evaluation of the implementation of the policy.
Some researchers in Zimbabwe have also focused on the strategies adopted by small businesses to adapt to the challenges they face. Nyanga, Zirima, Mupani Chifamba and Mashavira (2013) carried out a research on the survival strategies employed by SMEs in Zimbabwe during the economic crisis. Chirisa, Dumba and Mukura (2012:115) researched on the innovative, adaptive and survivalist strategies by small business enterprises in Zimbabwe between 1990 and 2009.
Although the study tracks the historical development of SME policies in Zimbabwe little attention is given to the National Policy and Strategy for SMEs in Zimbabwe as will be done in this study. This study will evaluate the policy and strategy framework for SMEs in Zimbabwe as this is the area that has been neglected in most studies.
Herington and Kelley (2012:7) argue that the unacceptable levels of unemployment and poverty in most African countries can be solved through entrepreneurial activity. According to Nyamwanza et al. (2014:1) the unofficial unemployment level in Zimbabwe is 87 percent and as a result of job losses, about 5.4 million Zimbabweans are employed in the informal sector. The majority of Zimbabweans are increasingly becoming more dependent on SMEs for their livelihood. Such scenarios necessitate the development of SMEs in Zimbabwe because they are fast becoming the anchor of the economy. Therefore, an evaluative study of the policy that was formulated for the sector is important to show the government’s efforts in assisting small businesses.
Small and Medium Enterprises (SMEs) are now critical to the development of Zimbabwe and the livelihood of her citizenry and as such a study on the country’s policy on this sector
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is of significant importance. An evaluation of the Policy and Strategy Framework of SMEs will help exhume some of the challenges faced by SMEs and gaps that can be exploited by the government to gain maximum benefits from SMEs. Such a study will also highlight the progress that has been made, if any, by the government in improving the plight of SMEs.
Clemens and Moss (2005:3) highlight that the investment climate remains uncertain, being weighed down by the downside risks arising from the lack of clearly agreed policy framework. The Zimbabwean government’s policies have negatively affected the level of investments therefore there is a need for an evaluative study into the country’s policy for SMEs to determine if the objectives of such policies are being met. Government policy is an important determining factor of the level of investment that businesses will get (Clemens and Moss, 2005:3). Evaluating the SME policy is therefore important to unravel the possible reasons for the plight of the small business sector.
The National Policy and Strategy Framework for SMEs in Zimbabwe (2002:4) was formulated to facilitate an environment in which SMEs can develop. However, SMEs are still faced with challenges which are blamed on the government. SMEs in Zimbabwe operate under difficult business conditions which include cumbersome official procedures and unattractive tax regimes (Gombarume and Mavhundutse, 2014:105). An evaluative study will show if the government implemented the policy in an attempt to ameliorate the identified challenges.
Buckley (2016:130) argues that the lack of focus on evaluation in the policy-making process hinders the development of cumulative knowledge and policy learning in the SME policy arena.
This argument shows that there is a dearth in the study of SMEs as most studies have failed to evaluate SME policies. It is this gap that this study occupies. The current study stems from the need for more evaluative policies in the SME sector.