An Investigation Into Challenges Facing Small And Medium Enterprises In Windhoek

ABSTRACT

Small to Medium Enterprises (SMEs) play an important economic role in many developing and developed countries all over the world. In Namibia, for example, the SME sector contributed over 13 per cent to the Gross Domestic Product in 2012 according to the National Statistics Agency report. As another example, the development of SMEs has increasingly contributed to China’s economic growth whereby they make up over 99 per cent of all enterprises in China (Liu, 2008). Despite their significance, statistics indicate that 85 per cent out of 100 SMEs in Africa do experience high failure rate during their developmental period because of different business challenges.

This study sought to investigate challenges facing SMEs in Windhoek, particularly in the sectors of manufacturing, trade, tourism and other services. A mixed method design involving both quantitative and qualitative research methods was used for this study. A sample for the study was drawn through stratified random sampling. Through this method a sample of 120 businesses was drawn from the population of 1080 SMEs in Windhoek as per database obtained from the Ministry of Industrialisation, Trade and SME Development. Data were collected through questionnaires administered to get information from SMEs as well as interviews with senior officials from the two SMEs supporting institutions namely; the Namibia Chamber of Commerce and Industry and the Ministry of Industrialisation, Trade and SME Development. Quantitative data collected were analysed by means of descriptive statistics using SPSS volume 22 and results were presented through

figures, tables, charts and summaries. Qualitative data were analysed, summarised and arranged into categories then coded and presented in an understandable way.

The findings indicate that the top five challenges facing SMEs in Windhoek are: lack of finance; high taxes and levies; lack of skills; labour retention and technical advice; and lack of vocational training. The SMEs in Windhoek need support from government and private institutions in aspects of vocational training (skills); subcontracting; utilities; technical advice; and financing. This study recommends that, these challenges should be seen as interdependent, the issue of lack of finance should be handled strategically by solving the root cause, government should create an open dialogue with SMEs and civil society, and a reviewed SME Policy should be implemented.