Anything remotely resembling accurate monitoring and measurement of growth in Guyana’s small business sector has not been possible over the years since no reliable mechanism exists for so doing. What has come to be loosely described as the small business sector ranges from modest ventures comprising the rearing of a few hundred chickens in backyards to the scores of barber shops, boutiques and hardware and clothing vendors that have sprung up across coastal Guyana. It would be interesting to be able to determine the extent of the cumulative contribution that these kinds of enterprises have made and can make in the future to job-creation and real employment.
Statistics of that kind would help us to make meaningful economic decisions regarding, for example, the extent to which ventures such as those mentioned earlier are deserving of both state support including incentives of one sort or another as well as the lending interest of commercial banks. Conceivably, too, there is the potential for collaborative initiatives that might see more established businesses diversify into promising and potentially lucrative ventures in areas such as agro-processing and the manufacture of non-food products.
A key disappointment for the small business sector in recent years has been the failure of relatively modest but viable agricultural projects to attract serious investment attention from the bigger players in the private sector, a few of the notable exceptions being the relationships that have been created between companies like Banks DIH Ltd and Demerara Distillers Ltd and small coastal orchards on account of investments by the two companies in fruit juices. In fact, the health-related growth in demand for fruit juices points to the potential for an increase in the local cultivation of traditional fruit and a likely reduction in the volumes of what are in many instances more costly and often less nutritious imports.
There has been decidedly less success in attracting serious investment interest in the wider agro-processing sector where, for the most part and with a few notable exceptions, what is deemed to be agro-processing is confined to micro business initiatives in domestic kitchens that produce mostly small volumes of food seasonings. These continue to be beset by a range of challenges including a lack of investment in efficient manufacturing processes, safety and health and environmental challenges that restrict access to external markets, difficulties with raw material supplies, labeling and packaging limitations and market access challenges.
The past few years have seen the small business sector receive a greater measure of attention in two significant respects. First, the commercial banking sector has demonstrated a much greater preparedness than it had done previously to reach out to the small business community with programmes that provide access to limited sums of investment capital and to business-related training programmes. Secondly, we have seen, albeit belatedly, some measure of spinoff from the passage of the Small Business Act (2004) the most significant of which has been the creation of the Micro & Small Enterprise Development project backed by around US$5million of funding from the bilateral REDD+ programme with Norway. MSED not only offers small businesses better commercial bank credit access through collateral support and grants for smaller projects but also provides a measure of formal business training for small investors who had grown accustomed to functioning in informal ways, thereby exposing their businesses to the greater possibility of failure.
The problem with the MSED project is that up until now we have no way of measuring the extent of its success or otherwise since, first, there is an absence of a continuous flow of information on the pace at which grants and loans are reaching applicants and the particular types of investments (particularly in the case of the grants) into which these monies are going. Perhaps more importantly, there continues to be a serious information void in the matter of just how much progress the various individual projects are making, a problem which can be addressed by placing information in the public domain on encouraging examples of best practices in their respective ventures amongst beneficiaries of funding and training through the MSED project.
On the whole, there still appears to be no coordinated official policy on small business development, the staging of last November’s Small Business Exposition notwithstanding. On a related matter it is taking far too long for the Ministry of Business to publish a report on the event that speaks to issues like whether or not the November event was a success from the standpoints of both the marketing of the small business sector and whether or not the Exposition itself was a financial success, matters on which the subject Ministry has now promised to update this newspaper. To return to the business of an official coordinated policy it might be useful to know whether the institutional strengthening of the human resource architecture at the levels of both the Small Business Council and the Small Business Bureau are ‘on the cards,’ since, having regard to what we already know is the strong likelihood that the MSED project will be unable to deliver on its job-creation targets, there may well be a need to improve efficiency levels within both the Council and the Bureau.
Having regard to government’s focus on job-creation, on the one hand and, on the other, the limits on the state’s ability to provide jobs, one assumes that an effective response to high unemployment will depend heavily on the private sector and more particularly on self-employment. The situation speaks to the need for government to raise its game in the period ahead to create an enabling environment for small business investment opportunities through initiatives like the MSED project, among others. Fashioning that environment will be one of the administration’s important tests in the period ahead.
