The contribution of the SMMEs to the Lesotho public procurement marketing on economic development

Abstract

Public procurement could be used as a bargaining chip to provide SMMEs preferential treatment and provide major assistance for indigenous manufacturing capacity. The issues that SMMEs face in the business world are not adequately addressed, despite the fact that they serve as incubators for new business organizations that may eventually grow into large corporations. These difficulties could include lack of funds and lack of access to them, as well as a lack of critical information that financial institutions demand in order to offer the loans or credit. Lack of Government support for access to the public procurement opportunities is also a barrier as most of the SMMEs do not have the proper channels of acquiring information from the government ministries and agencies. Some of the socio-economic factors such as unemployment, poverty and crime may efficiently be eradicated through the empowerment of the SMMEs. The objective of the study is to assess the contribution of the SMMEs to Lesotho public procurement markets on economic development. This was a qualitative research project that was exploratory in nature. A quantitative data analysis method was used to measure the data by assigning numerical codes to it. To make a descriptive assessment, a descriptive data analysis was used. According to the findings of this study, a considerable majority of the participants agree that the SMMEs can lower the rate of unemployment because they are numerous and employ between two and five people. The data show that the SMMEs increase the government's revenue base, allowing for the collection of the various taxes to fund government spending. The findings further suggest that public procurement provides market opportunities for the private sector businesses, which contributes to the GDP and government income growth. Lack of credit was identified as one of the hurdles to the SMME performance in the survey. The availability of the institutions that provide technical and financial assistance is also critical for the SMME production efficiency. The study concludes that while there is no legal obligation for the institutions to assist the SMMEs, they do so out of moral commitment. It is further concluded that procurement regulations and policies are tailored in manners that inhibit the SMMEs from participating in public procurement. The government does not have the policies in place to ensure that the infant industries continue to thrive