Connect with us


SME Chambers President Warns: High Costs, Endangered SMEs



SME Chambers President Warns: High Costs, Endangered SMEs
Image source: Defi Media

Ajay Beedassee, president of the SME Chambers, believes that any unreasonable increase in wages would jeopardize the existence of small and medium-sized enterprises.

The increase in the minimum wage will be followed by adjustments to restore salary balance, and a report will be published soon.

What is your state of mind? I must admit, I am concerned because any wage increase directly affects production costs. This forces us to raise our prices in the international market.

Consequently, our products lose competitiveness against our competitors, which could lead to a decrease in orders.

While the government may provide financial support to small businesses unable to afford a wage increase, these are short-term solutions. Our main concern is the long-term impact.

How long will the government continue to support minimum wage increases and potentially salary adjustments?

If private sector wages are aligned with public sector wages… it could lead to the disappearance of not only small and medium-sized enterprises, but many private companies, as the financial cost would be too high.

How do you assess the situation of small and medium-sized enterprises?

To be honest, I would say that while some companies struggle to survive, the majority face significant challenges. This is largely due to South Africa’s decision, one of our main markets, to reduce imports to protect its local market.

This particularly affects exporting small and medium-sized enterprises, with some seeing their order books reduced by 90%.

Wage increases directly impact production costs. As for other markets…while I don’t want to be pessimistic, many of our European markets, such as the UK, are facing the specter of recession, which is not favorable for our exports.

We could focus more on the local market, but with the gradual loss of purchasing power, Mauritians are prioritizing consumer products.

Consequently, I hope the government will take steps in the upcoming budget to further support small and medium-sized enterprises.

Unlike large companies, they cannot relocate to countries with better conditions.

How can you be helped? As I emphasized to the Minister of Finance during our pre-budget meeting, small and medium-sized enterprises across various sectors are significant providers of stable employment in Mauritius.

We have employees who have been with us for decades. Losing their jobs overnight due to economic reasons would greatly harm them.

I am grateful to the government for the assistance provided during the Covid-19 pandemic, such as loan facilities from the Development Bank.

This helped us preserve jobs. However, the majority of these enterprises struggle to repay the loans they took.

This constantly prompts me to call on the government to clear these debts. I also believe it is discriminatory that exporting companies can include accommodation costs in the minimum wage while non-exporting companies cannot.

I hope the Minister of Finance will take action in the next Budget to correct this inequality. In addition to fiscal measures, authorities can also support us more in marketing and exploring new markets.

Source: Defi Media

Spread the News
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *