THE EAST AFRICAN COMMON MARKET PROTOCOL

Count down to the East African Common Market

The Heads of State of the EAC Partner States acceded to the East African Common Market Protocol which is expected to be implemented from July 1, 2010 following ratification in all partner states.
The EAC Common Markets Protocol provides for:

 Free movement of Goods
 Free movement of Persons
 Free movement of Service
 Free movement of Capital
 Free movement of Workers
 The right of Establishment
 The right of Residence

In view of the enhanced market of about 130 million people, the EAC integration process should spur more growth in investments in the region.

SMES-EA wish the partner states good luck and urge them to do more in terms of ensuring widespread sensitization of their Citizens on the provisions of the Common Markets Protocol and opportunities.

Are the Small and Medium Enterprises (SMEs) based in the EAC region ready to avail themselves of these opportunities???

The present economic situation in the region dictates that residual labour market entrants have no alternative but to find their way as micro entrepreneurs, casual or regular employees, or apprentices into the urban or rural informal sector activities. Over the period between 1980 and 2000 the MSE sector (majority based in the informal sector) employment increased at an average rate of 12% yearly giving the highest sub-sector growth in the region.

The MSE sector consists of a wide variety of small enterprises employing less than 10 and in most instances less than 5 workers. They operate with little or no capital at low levels of productivity and often out of temporary structures. Few of the micro entrepreneurs have the qualifications normally associated with their trade; many find themselves in circumstances which make it difficult for them to abide to the code of professional ethics and to adhere strictly to Governments’ rules and regulations and, as a result are liable to law enforcement measures, including penalties, which translate to loss of business. Due to their informality, they do not generally qualify for Government services and subsidies as available to the larger enterprises.

Surveys consistently show that between 30% and 70% of all MSE sector employment in the region is in commerce and that the majority of traders are women. The remaining percent mostly men are being referred colloquially and officially as Jua Kali (Hot Sun)/ Nguvu Kazi (Work is strength) workers, and are involved in a variety of manufacturing and repair activities and in productive services such as metal fabrication, carpentry and joinery, textile, radio/electronics repair, hairdressing, motor vehicle, photography, herbal derivatives, chemical etc.

Although, some positive measures have been put in place to address some of the MSEs problems, limited access to know-how continues to be a major obstacle for the sector. Most of them, whether just starting or long established, lack skills or the information they need to be more profitable. They require advice on market opportunities, appropriate technologies, product diversification, quality control, occupational health and safety, and Business Development Services. The sector is characterized by horizontal growth and very few grow vertically.

Business competition in the MSE sector is often very intense particularly where many entrepreneurs produce and sell the same products. In order to increase incomes and create room for new arrivals, it is essential to address the issue of limited product diversity through marketing research, diversification, improving product quality, design and marketing.



Richard N. Muteti
Director, SMES-EA East Africa
Regional Project Manager, CISO-East Africa
CEO, KNFJKA

SMES - EAST AFRICA COMES TO THE AID OF SMEs

SMES - EAST AFRICA COMES TO THE AID OF SMEs

Kenya is a young economy with majority of business owners falling in the Small and Micro Enterprise (SME) category. For someone entering the business world for the very first time the task can be daunting; even seasoned business people sometimes find the going tough and occasionally need a hand up. Small and Medium Enterprise Support – East Africa (SMES,EA) has positioned itself as a one-stop shop for SMEs.

At SMES-EA, we recognize that information is power. We offer businessmen/women information on the products and services available in the market that would take their business to the next level. Depending on one’s business requirements, we are able to advise accordingly. For instance, a young entrepreneur who is only interested in balancing his books or doing a business plan, but does not have time or the resources to attend a Diploma course in one of the commercial colleges is referred to a trainer offering the said service. Whatever your need be it training, marketing, accessing credit or just formalizing the nature of your operations, we have got the answers.

We work closely with GS1 Kenya to ensure local and regional growth oriented traders access the bar code facilities. Lucy owns a confectionery shop in Rongai. She makes delicious cakes, and she was determined to expand her market beyond the residents of Rongai. She dreamt of having her products retailing in the local supermarkets. Every time she approached the local supermarket she was told she needed barcodes. She would approach another supermarket hoping this time she would be ‘lucky’, but it was the same ‘bar code story’ all over again. She approached SMES, EA and, as a one-stop strategic referral centre for SMEs and having Referral Agency with strategic Partners like GS1 Kenya. She left GS1 Kenya with the Bar Codes, a very happy customer. As far as her business vision is concerned, to use a cliché, the sky is now the limit.

We have embarked on launching the first ever SMEs service providers’ handbook. These organizations from Banks, Insurers, Trading Corporations, NGOs and anybody dealing with SME related issues will get a chance to tell their target audience where they are and what they have to offer. We will Endeavour to ensure every part of the country is a recipient of this handbook.

The publication will be distributed free of charge through our select partnership with various National and regional apex SME and Youth sector Based organizations in Kenya. The Handbook will facilitate the growth of a vibrant service sector for the SMEs. By ensuring that SMEs are able to easily access these services means the service providers will receive much more business

We live in a competitive age, the customer is very discerning in his tastes. For any Entrepreneur to stay on top of the game and make good returns, they need to offer quality products and/or services. Market accessibility can only be addressed by tackling Product Quality, Design and Competitiveness. The small business owners should be assisted by Business Counseling, Mentoring and Exposure. The role of Business Development Support Services cannot be gainsaid and SMES, EA is determined to fill these big shoes.

We are happy to be associated with GS1 Kenya and look forward to a continued relationship towards uplifting the Small Businesses in Kenya and the East African Region in general

Lydia Njoroge
Programs Director
SMES/EA