Implications of Foreign Direct Investment on SME Growth in Zimbabwe: A Case Study of Bulawayo Province

Lawrence Dumisani Nyathi and Privilege Chikwala
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Lawrence Dumisani Nyathi: National University of Science and Technology, Lecturer-Department of Banking & Economic Sciences, Faculty of Business & Economic Sciences, Zimbabwe.
Privilege Chikwala: National University of Science and Technology, Graduating Candidate-Department of Banking & Economic Sciences, Faculty of Business & Economic Sciences, Zimbabwe.

International Journal of Research and Scientific Innovation, 2024, vol. 11, issue 10, 526-534

Abstract: SMEs in Zimbabwe have withstood the test of time amidst economic decay experienced by the Zimbabwean economy for the past two decades. Since the adoption of progrowth policies in Zimbabwe FDI inflows have significantly increased overtime towards SMEs due because of their nurture to drive growth and economic competitiveness as well as navigating difficult economic landscapes. Therefore the paper investigates the implications of foreign direct investment on SME growth in Bulawayo. A qualitative research approach aligned with interpretivism research philosophy was adopted in this paper. The research subjects were selected using a convenient sampling technique. A total of 20 interviews were conducted with the managers and business owners of SMEs. The related challenges faced by SMEs in the Bulawayo metropolitan are increased competition, access to capital difficulties, skill and technology gaps, and regulatory and bureaucratic hurdles. The findings revealed that FDI plays a multifaceted role in shaping the SME landscape in Bulawayo metropolitan. The positive effects included opportunities for technology transfer, market expansion, improved infrastructure, capacity building, and training opportunities, and inclusion of the small and medium enterprises in supply chain integration. The study recommends a broader discussion with policymakers, business leaders, and other stakeholders to maximise the benefits of foreign direct investment on small to medium enerprises while mitigating its adverse effects.

Date: 2024
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