SMEs export barriers simplified

		The direct trade participation of SMEs in developing countries is not in line with their importance at the domestic level. Compared to large firms, however, few SMEs export – direct exports representing just 3% of total SME manufacturing sales, compared to 14% for large enterprises (World Trade Organization, 2016). The process of exporting goods and services is a mammoth task which requires investments in human resources and capital. This has discouraged many SMEs. Those who choose to take up the risk are faced with non-tariff barriers (NTBs) starting from internal to regional level.  Trade facilitation is key for the success of SMEs exports and this should start at national level building up to the global. Trade facilitation looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximize efficiency while safeguarding legitimate regulatory objectives. This has resulted in the World Trade organization introducing the Trade Facilitation Agreement to promote easy passage of legal trade and cut costs of importing and exporting. SMEs, however, come as an afterthought in these trade negotiations and its essential for them to ensure that their needs are also considered as these agreements are being implemented. The whole idea of trade facilitation is about improving the regulatory interface between government bodies and traders at national borders. Major trade obstacle to SME exports   1.    Cumbersome registration process for exporters under trade agreements 2.    Lack of information on export markets 3.    Lack of finance to meet costly product  standards and certification procedures and lack of information about requirements in the foreign country;         4.    Lack of transparency and cumbersome border procedures 5.    Difficulty in accessing affordable trade finance 6.    Failure by regional trade protocols to specifically target SMEs in their agreements Recommendations 1.    Simplification of exportation process and customs documentation. 2.    Establish rapport through policies between the SMEs and financial institutions for financing SMEs exports and trade finance. 3.    Establishment of one stop centers on exports and trade information which are decentralized to district levels. 4.    Establishment of productivity and innovation credits. The government needs to avail cash bonuses and incentives for all exporting SMEs. This can be coupled with tax and customs duties rebates which are directed at SMEs sector. 5.    Promotion of industry collaborations-there should be incentives granted to large corporations which support export initiatives by SMEs. This can be done through interaction of SMEs member organizations and large corporates at both national and regional level. 6.    Conducting awareness on customs and trade through various channels including both conventional and digital platforms. 7.    Regional advocacy on trade policies. How this can be achieved. 1.    Increased better access to trade information 2.    Providing faster, simpler and cheaper border clearance 3.    Providing fairness in resolving customs disputes and clear appeals procedure 4.    Trainings on duty free import procedures and transit of goods 5.    Understanding available trade facilitation initiatives and how to benefit from them   ·         It’s now time for the policy makers to ensure that they consider the grievances of the SZMEs in the same way they are eager to listen to foreign investors and large corporates. The future of global trade is in the hands of SMEs and inclusive policies are the answer to their challenges. Growing exports and intra-regional trade in Africa will depend on the capabilities of national economies in supporting their own and promote their exports   Chiukira Levious is a Customs and Trade consultancy with Gleam Consultancy
Levious Chiukira Managing Consultant   CONTACT PHONE: +263773065062