The deputy minister for Tanzanian finance and economic affairs, Jeremiah Sumari, has recently indicated that the country needs to begin looking for methods and means of coping with the current Tanzania business climate, in which the majority of the country’s small and medium scale enterprises (SMEs) are being faced with numerous problems including the failure to effectively meet the terms of international standards.
According to Mr. Sumari, not only must the country’s SMEs conform to international standards, but they must also be able to coordinate with the constantly growing pressures and demands that stem from globalization.
During a recent visit to Arusha for the Accountants Annual Conference, an event that was organized by the National Board of Accountants and Auditors (NBAA), Mr. Sumari posed a challenge to the country’s accountants, auditors and allied professionals to come up with ideas for helping the country’s SMEs to meet international standards and as well as for ideas in solving other related issues.
“SMEs in Tanzania are still confronted with problems that call for concerted efforts to ensure the majority, if not all of them, are enabled to cope with issues in their business environment,” said the deputy minister in a recently published report by The Citizen.
The NBAA, which was originally established 37 years ago as a result of the Auditors and Accountants (Registration) Act.No.33 of 1972 as amended by Act.No.2 of 1995, currently has 3,200 members.
In recent years, the annual NBAA meetings have covered a variety of topics, including the challenges that are posed by attempting to implement the application of international financial reporting standards in SMEs.
According to a report on the event, the deputy minister indicated that the SME sub-sector was clearly the dominating force in the country’s economy, a statement that was made based on the fact that 20 percent of the county’s workforce is employed by nearly 1.7 million SMEs, thus contributing to between 30 and 40 percent of the overall GDP, there was no doubt that the sub-sector dominated the country’s economy.
Mr. Sumari went on to say that SMEs are one of the most compelling factors in economic development, both in Tanzania as well as in most of the world’s developing countries.
“They stimulate entrepreneurial skills, private capital and ownership,” he said in The Citizen report, “They are also flexible and can easily adapt quickly to changing market demand and supply situations.”
According to the report, poverty reduction, job creation and improved living standards are examples of the significant impact that can be already be seen as a result of the development of the sector, 60 percent of which is urban-based with the remaining 40 percent being located in rural areas.