Consultant to Review the MSME Policy

Contract

This is a National Consultant contract. More about National Consultant contracts.

Background

The Kingdom of Eswatini is faced with slow growth, fiscal crisis, high levels of unemployment, rising poverty and inequality – a situation that has been further amplified by the COVID -19 pandemic. To mitigate the impact of Eswatini’s multi-dimensional development challenges, an equally multi-dimensional response strategy is needed. The combination of internal vulnerabilities of high poverty, inequality and unemployment on the one hand, and external vulnerabilities influencing the national economy on the other, will shape the next five years of advancements towards the SDGs in Eswatini, thus laying the foundation for progress towards 2030. Given the multi-dimensional impediments to inclusive growth identified above, there is a strong case for enhancing production on the one side, and for ensuring value addition to create more jobs on the other. MSME’s have a very important role to play in enhancing the production side to create the needed jobs, reduce food insecurity, alleviate poverty, and subsequently boost economic growth. To achieve this, there is a need for a good policy formulation and regulatory framework that will improve the business environment for MSME’s to thrive.

The Micro, Small and Medium Enterprises (MSME) Unit was established in 2009 through assistance from UNDP. The Unit’s core mandate is to develop and promote MSMEs through the ensuring an enabling environment. It is a well- documented fact that MSMEs are at the heart of economic development through poverty alleviation, employment creation and contribution of the country’s fiscus and growth trajectory. Over the years the Department has endeavored to deliver on its mandate by collaborating with strategic partners and positive results have been realized. The first MSME National Policy developed in 2010 but never adopted by Cabinet due to various reasons. In 2015 through the assistance from the Centre of Financial Inclusion (CFI) the review process commenced and was concluded in 2017 after which the MSME National Policy of 2018 was adopted by Cabinet and implemented thereafter with a five-year lifespan. The 2018 MSME National Policy is due for review this year (2022).

It is a well-known and documented fact that the Micro, Small and Medium Enterprises (MSMEs) are the key drivers of the economic growth and have great potential for paradigm shift from small informal sector businesses to multi-national companies. In the Kingdom of Eswatini the recent FINSCOPE study determined that there are about 70,000 MSMEs in Eswatini, employing over 90,000 people (21% of the workforce), with an estimated contribution of 50% contribution to GDP. However, 75% of MSMEs are owned by independent entrepreneurs, with no jobs created and 74% are in rural areas. Most micro- and small enterprises are set up by necessity rather than by choice, i.e. they are survivalist, rather than growth-oriented. The bulk of them prevail in low value-addition activities in the wholesale and agriculture sectors. More significantly, 75% of the MSMEs operate without a business license hence informal.

The distribution of MSMEs by sector is very different from the breakdown of GDP by sector of activity. For example, while the wholesale-and-retail sector represents about 40% of MSMEs, it contributed only 14% to GDP in 2019. Conversely, only 13% of the MSMEs operated in the manufacturing sector; yet, manufacturing added 31% to Eswatini GDP in 2019 — the biggest share across all sectors.

The wholesale-and-retail trade sector mostly involves petty trade, much of which informal in nature. Indeed, informality is a major constraint to both MSME development and to the reach and effectiveness of government policy and support, including income support to businesses and households hit by the COVID-19 pandemic. According to the Finscope Survey, 75% of all MSMEs are informal. Among the reasons for not registering, the micro nature of the business and the lack of financial resources to meet registration costs are cited by 60% of the informal firms. This has important implications for the design of incentives for the sector.

OBJECTIVES OF THE ASSIGNMENT

The main objective will be to review the current MSME National Policy of 2018 and further develop an implementation plan for the Unit, therefore the objectives of the review are as follows:

• Identify key constraints of the MSMEs sector impeding their growth,
• Develop strategies for the development and promotion of the MSMEs, including Informal sector inclusion and women empowerment.
• Define the strategy’s implementation, monitoring and evaluation mechanisms.
• Propose an action plan for the strategy’s implementation, with activities costing, deadline and indication of key actor’s responsibilities.

Duties and Responsibilities

SCOPE OF THE WORK

Service Provider shall study and investigate the MSME sector very carefully and deeply. During the field study, various key stakeholders will have to be interviewed to get a proper insight in the current situation and identify gaps, complemented by desk research work through submission of the Current Situation Report including Need Assessment Report. The Service Provider will also make recommendations on various issues identified and develop a comprehensive implementation strategy for addressing the challenges.

Duties and responsibilities of the consultant

1. Benchmark the MSME National Policy of 2018 with other countries, at least 3 in Africa and other continents and propose the best practice for the Eswatini context.
2. Undertake a comprehensive review of the existing MSME policy and the extent to which it was implemented by the government, drawing on challenges, opportunities and key lessons learnt, and further develop a comprehensive implementation plan with a robust monitoring and evaluation framework.
3. Conduct a comprehensive study of the MSME sector SWOT/PESTEL etc.

4. Establish an institutional framework to support MSMEs growth in the country.

5. Identify policy and institutional constraints, financial, and non-financial interventions needed for MSME development (such as ‘single window’ business services), credit risk assessment and management, collateral resolution processes, regulations, information support, single platform)

6. Document/provide an inventory and summary of key policies, measures and practices adopted by Eswatini towards supporting MSMEs in response to the COVID-19 crisis and other long-standing challenges such as access to finance. Review, analyze and integrate good practices and policies with a highlight on digital and green solutions
7. Conduct a needs assessment of MSMEs’ business development and reviewing the design of dedicated state programs in support of MSME and entrepreneurship development
8. Explore and integrate provisions in the policy that will reserve a percentage of all food items to be sourced from local producers and processors in all retail outlets to promote and spur on local products, promote the penetration of local products in formal markets and empower MSME’s
9. Develop a roadmap for MSME’s to access AfCFTA markets
10. Prepare a medium- and long-term action plan to implement the reforms/interventions recommended; and develop a medium and long-term capacity building plan for stakeholders in implementing the action plan.

Duration of the Work

The Consultant will be contracted by UNDP and will be supervised by the SME Unit of the Ministry of Commerce Trade and Industry, collaborating closely with the contracting authority (UNDP). This assignment is for duration of 3 months starting in August 2022 and ending in November 2022.

Duty Station

The Consultant will work remotely and provide frequent updates to the Director of the Micro, Small and Medium Enterprises (MSME) Unit on agreed time intervals.

Methodology

It is expected that the Consultants will present a complete approach and methodology for preparation of this study, including:

• Engaging key strategic institution in the sector such as Micro, Small and Medium Enterprises (MSME) Unit, Eswatini Enterprise Development Company (SEDCO), Eswatini Investment Promotion Authority (EIPA), Eswatini Standards Authority (SWASA) in the Ministry of Commerce, Industry and Trade and other development partners
• Presentation of an inception report for discussion and approval by the Ministry of Commerce, Industry and Trade
• Undertake a thorough literature review on the sector and undertake data collection and analysis as deemed necessary

STANDARDS OF PERFORMANCE

The Consultant shall perform the Services and carry out its obligations hereunder with all due diligence, efficiency, and economy, in accordance with generally accepted professional standards and practices, and shall observe sound management practices, and employ appropriate technology and safe and effective equipment, machinery, materials and methods. The Consulting firm shall always act, in respect of any matter relating to this Contract or to the Services, as a faithful adviser to the Client, and shall always support and safeguard the Client’s legitimate interests in any dealings.

DELIVERABLES

Following consultations with relevant stakeholders, the Consultant will be expected to work mainly on the deliverables as per table below:

Deliverables

Timelines

Payment

Approving Authority

• Inception Report and methodological approach

20 days

20%

UNDP and MCIT

• Comprehensive study of MSME sector including SWOT/PESTEL, benchmarking with at least two regional countries
• Review and revise MSME policy

15 days

30%

UNDP and MCIT

• Action plan for implementation of reforms and identified interventions
• Validation of the draft policy

15 days

10%

UNDP and MCIT

• Final submission of revised policy.

10 days

40%

UNDP and MCIT

60 days

Competencies

Corporate and Core Competencies:

• Demonstrates integrity by modelling the UN’s values and ethical standards;
• Promotes the vision, mission, and strategic goals of UNDP;
• Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability;
• Treats all people fairly without favouritism.
• Communication – Facilitate and encourage open communication and strive for effective communication.
• Planning & Organizing – Develops clear goals in line with agreed strategies, identifies priorities, foresees risks and makes allowances accordingly.
• Organizational Awareness – Demonstrate corporate knowledge and sound judgment.
• Teamwork – Demonstrate ability to work in a multicultural, multi-ethnic environment and to maintain effective working relations with people of different national and cultural backgrounds.
• Accountability – Takes ownership of all responsibilities and delivers outputs in accordance with agreed time, cost and quality standards.

Functional Competencies:

• Excellent communication and presentation skills including consultation and facilitation, with ability to express ideas clearly, logically and effectively, both orally and in writing;
• Result orientation including being conscious and efficient in meeting commitments, paying attention to detail, observing deadlines and achieving agreed targets;

Required Skills and Experience

Education:

• At least a master’s degree in economics, finance, business administration, or a related field,

Experience:

• At least 10 working on enterprise development and promotion, MSME policy development and support, strategy formulation for MSME’s
• At least 5 years experience in working with private sector organizations and government agencies
• Prior work experience with government agencies, NGOs, or international organizations involved with green initiates and programs
• Prior working experience in the SADC region will be an added advantage
• Excellent communication and presentation skills including consultation and facilitation, with ability to express ideas clearly, logically and effectively, both orally and in writing.
• Practical experience in report writing and an ability to make policy and practical recommendations for a way forward.

Language Requirement:

• Proficiency in written and spoken in English and siSwati.

How to Apply:

Interested and qualified candidates should submit;

1. Duly accomplished Letter of Confirmation of Interest and Availability using the template provided by UNDP;Letter of Confirmation of Interest template
2. Personal CV or P11, (P11 form); indicating all past experience from similar projects, as well as the contact details (email and telephone number) of the Candidate and at least three (3) professional references.

Please note you can upload only one document to this application (scan all documents in one single PDF file to attach).

Incomplete applications will be excluded from further consideration.

Criteria for Selection of the Best Offer

• Combined Scoring method – where the qualifications and experiences will be weighted a max. of 70%, and combined with the price offer which will be weighted a max of 30%