19 December 2012

Mozambique: Connecting SMEs

Maputo — On October 25, the CTA, in partnership with USAID / SPEED, organized the seminar on "Connecting SMEs: a South African perspective."

The consultants John James and Leida Schuman respectively presented the following topics: "Global Trends of local procurement and local content in extractive industries", "Business Links - the South African experience" and "Preparation of generic suppliers guide for potential opportunities".

The local content allows to: - domicile the technology - build infrastructure, - broaden and deepen the national value chains, - enhance national capacity and vocational training infrastructure, - develop local suppliers for traditional supply chains, - increase employment opportunities and growth of national income and tax base.

Overall regional trends in policy and regulation benefit national value chains. However, this preference for local suppliers exists, provided that they offer competitive prices and comply with the quality, health, safety and delivery requirements.

The lessons learned from the South African experience show that for a successful implementation of local content, there must be:

- a strong commitment from the operator / user - an independent audit and effective body, - local businesses with the ability to adapt themselves to the strict rules of operation, - the timely approval of contracts by the main actors at all stages, - the need of a constant flow of work to maintain the capacity gains.

Often the differences between SME expectations and the reality of procurement process of large companies are important. The large companies want to deal with a small number of suppliers, with lowest costs and never compromising safety or quality.

To be able to integrate the purchasing process, SMEs need know the requirements to be met, have contacts and networks, be informed of the timing of purchases, have the technical expertise and offer a competitive price.

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