Assessing the Effectiveness of Small and Medium Enterprises (SMEs) in Promoting Economic Growth: A Case Study of Dawako Agribusiness in Solwezi District

This study assessed the effectiveness of Small and Medium Enterprises (SMEs) in promoting economic growth in Solwezi District, Zambia, focusing on the agribusiness sector through a case study of Dawako Agribusiness. Despite Solwezi's rapid economic transformation driven by copper mining since 2005, poverty levels remain at 68.4%, significantly above the national average of 54.4%. While over 1,200 agribusiness SMEs operate in the district, their actual contribution to economic growth and employment creation remains unclear, creating a critical knowledge gap for evidence-based policy formulation. The research employed a mixed-methods approach, combining quantitative surveys with qualitative interviews from 50 respondents, including 44 Dawako Agribusiness staff and 6 government officials. The Resource-Based View (RBV) theoretical framework, emphasizing how internal resources drive competitive advantage and economic contributions, guided the study. Key findings revealed that agribusiness SMEs contribute to economic growth through rural development (38%), increased household income (36%), and value addition in agriculture (26%). However, 54% of businesses employed more than 20 people, indicating concentration among larger enterprises, while micro-enterprises represented only 6%. Government support showed polarization: 50% had accessed support policies while 50% had not, and 52% rated no specific intervention as effective. Access to finance emerged as a critical constraint, with 42% reporting difficulties obtaining credit. While 66% rated local market access positively, only 48% had accessed regional or export markets. The study concluded that agribusiness SMEs' impact remains modest and uneven, operating primarily as secondary beneficiaries of mining-driven demand. Persistent barriers including limited finance access, inadequate infrastructure, and weak policy implementation constrain growth. Recommendations include establishing dedicated support desks, designing simplified credit facilities, developing market-linkage contracts, and strengthening rural infrastructure.