The minister of Investment, Trade and Industry (MITI), Peggy Serame has implored the informal sector to work towards building their businesses into formal enterprises. Speaking at the launch of the Botswana National Informal Sector Recovery Plan (16/3/2021), she said small businesses should utilize interventions like the Recovery Plan to achieve this.
“To the informal sector, I would like to encourage you to continue to work hard to build your businesses such that in the end you sustain our businesses and graduate to formal businesses,” Serame said.
“Position yourselves and make use of these planned initiatives and continue to seek business advisory and other business management assistance from institutions such as LEA and others.”
The Botswana National Informal Sector Recovery Plan seeks to provide mechanisms for the Informal Sector businesses to respond to the effects of COVID-19; even more importantly, the plan seek to develop sustainable measures to overcome similar shocks by addressing the challenges facing the Informal Sector. It rests on two strategic goals; Establishment of Informal Sector Facilitation Structures and Economic Revitalisation of the Informal Sector
According to the minister, the launch of the Plan is to create awareness amongst the key stakeholders, Government and private sector, civil society and development partners. She added this should translate into actual review of your strategies to facilitate the informal sector in your Districts, Regions and communities. To that end MITI is in the process of reviewing the SMMEs guidelines, policies and relevant strategies to facilitate informal sector development. All relevant legislation will require review, she said.
Serame added there is also a need to establish platforms for Informal Sector Entrepreneurship Training and Cultural Change. “Therefore MITI will partner with other stakeholders to offer relevant entrepreneurship training programmes that facilitates innovation, cluster development, incubation, supply chain management, organisational management, marketing, financial management, and up scaling for the informal sector.”
The Informal Sector study conducted in 2015 showed that the estimated number of informal sector businesses was 116,571; employing around 191,176 individuals. The estimated annual economic output of this sector was about P7.8 billion which is a contribution of 5.3% towards the country’s Gross Domestic Product. The survey revealed that the informal sector businesses had increased by over 233% since the 2007 survey.
Serame said from the data on the registered informal sector entities, most businesses are in the services sector at 64% followed by Agriculture at 21%. The main activities in the services sector involve selling and reselling of various items that include food stuffs, catering, clothing and other items such as airtimes and other low value items.
While the Agriculture sector is dominated by goat production, poultry production, horticulture and small-scale dryland farming. Therefore, these are the focus sectors as they have the potential to deliver maximum impact in reinvigorating the sector.