Small and Medium Enterprise Development Corporation (Smedco) has said the new Micro, Small and Medium Enterprises (MSME) Act will provide the framework to unlock participation of small businesses in public procurement.
Smedco CEO Chezani Otaniele’s remarks come at a time MSMEs believe the SMEs Order of 2020, which was meant to provide preferential
treatment to small businesses in government procurement, is not being effectively implemented due to lack of legal backing.
Speaking at an awareness meeting of the MSME Act that Smedco jointly held with Ministry of Industrialisation, Business, Trade and Tourism in
Lilongwe on Friday, he said the regulations governing the law will formalise the sector.
Among others, Otaniele said the regulations, already approved by the Ministry of Justice and set for implementation from April 2026, will encourage small businesses to register
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their businesses and get an SMEs certificate, which positions them to be legitimate beneficiaries of public procurement.
He said: “There is the issue of registration of SMEs where most questions were coming on issues of double registration.
“People thought that perhaps this is a duplication of what is done at the Department of Registrar General’s Office, but it is different because if you recall, there was registration of SMEs under the 2020 SMES Order, which is promoting preferential treatment of SMEs in public procurement.”
Otaniele said instead of registration being done under the SMEs Order 2020, it has to be done under a proper Act of Parliament which is the MSME Act.
In an interview, Adebayo Akindeinde, who is the leader of Gopa Technical Assistance Team, which partnered Malawi Government in the
project, said the new regulation gives Smedco the mandate to oversee business development service operators and business associations to ensure delivery of quality and impactful support to small businesses.
“This Act is talking about regulation, promotion and development of SMEs as the purpose for its enactment. The same Act also established a new institution which is Smedco and this institution is the one principally responsible for implementing most of the proposition of the Act,” he said.
Akindeinde urged operators within the SME ecosystem to understand what the Act means, how it is going to work and issues of compliance of the Act.
Meanwhile, Business Development Service Association interim committee vice-chairperson Carol Chimkwita Kumakanga said the regulation will help to strengthen the MSME sector because it has relieved Smedco’s role from providing business development services or consultancy to regulators of business development service providers.
Chamber for Small and Medium Businesses Association executive secretary James Chiutsi said the law represents a significant step forward in supporting the growth and development of small businesses.
“This is a good development because the Act has now defined the business development service providers as initially there were no business development services,” he said.
A recent study by Common Market for Eastern and Southern Africa Federation of Women in Business Malawi Chapter revealed that women-led businesses access less than one percent of public sector contracts.
The 2023 National Statistical Office report showed that women constitute 52 percent of the country’s population yet their participation in economic opportunities, particularly in public procurement, remains disproportionally low.
Public procurement accounts for approximately 75 percent of Malawi’s national budget, according to Ministry of Finance, Economic Planning and Development, making it a critical driver of economic growth
