SMEs - the impact of corruption has deep roots

Guest post by: Dr. Rob Smorfitt
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SMEs and entrepreneurs in Africa - By Dr. Rob Smorfitt

SMEs are perceived to be the saviour of developing countries. However, one of the biggest stumbling blocks to their success is government corruption. Unfortunately corruption is generally only perceived by business to be an added financial cost to the transaction.

However, it is a lot more than that. A simple example will suffice. A student from Mozambique was wanting to do research on the impact of legislation on SME's in Mozambique. On contacting thegovernment printerto purchaseprinted copies of the legislation, the student was informed that unless bribes were paid they could not release the copies of the legislation. The student is now constrained in the research they do as a consequence. The research not completed will in turn be unable to provide guidance to the Mozambique government, and SMEs in turn will perhaps have to wait a whole lot longer for reform. This means that entrepreneurs may not be able to launch their businesses and employ people. The story just keeps growing, all because of corruption. I have personally seen corruption at work in South Africa, Botswana and Namibia, and had confirmation from business associates of personal exposure to corruption in Uganda, Mozambique and Tanzania.

Until such time as we begin to see serious efforts by governments to stamp this out, Africa's problems will never diminish.It does require serious commitment from government. In South Africa there are a number of cases where people blew the whistle on corruption and ended up unemployed at worst, and murdered (so it is claimed) at worst. Either way, whistle blowers should be treated as national heroes, not pariahs.

If the African spirit of Ubuntu is a real and genuine community sense of good neighbourliness, how do we justify corruption, when the loser is the community at large?

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SMEs and entrepreneurs in Africa - By Dr. Rob Smorfitt

About the Author: Dr. Rob Smorfitt

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Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com. I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
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