National SME, Workers Formalisation Roadmap Seen as Key to Pakistan’s Economic Growth

By Farzana Chaudhry | Lahore, Pakistan

LAHORE: The implementation of Pakistan’s first National SME and Worker Formalisation Roadmap is expected to pave the way for sustainable and competitive economic growth by strengthening institutions, improving productivity and enhancing working conditions in the small and medium enterprises (SME) sector, officials said on Sunday.

The assessment was jointly shared by Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production; Malik Aman, Joint Secretary at the Ministry of Industries and Production (MoIP); Nadia Jehangir Seth, Chief Executive Officer of the Small and Medium Enterprises Development Authority (SMEDA); and Geir T. Tonstol, Country Director of the International Labour Organization (ILO) in Pakistan.

Speaking on the occasion, SAPM Haroon Akhtar Khan described the Roadmap as a central pillar of Pakistan’s economic transformation. He said formalisation would expand opportunities for businesses and workers by improving access to finance, technology, export markets and decent work.

With nearly 44 percent of Pakistan’s GDP operating in the informal economy and millions of workers lacking social protection, he stressed the need for structural reforms to align Pakistan’s economy with modern supply chain requirements and global standards.

Joint Secretary Malik Aman said the initiative reflects a coordinated government effort led by the Ministry’s Technical Working Group. He noted that the Roadmap outlines realistic and actionable measures, including simplifying SME onboarding, harmonising labour definitions across federal and provincial institutions, and expanding digital compliance mechanisms.

SMEDA CEO Nadia Jehangir Seth emphasised that SMEs form the backbone of Pakistan’s economy and that formalisation is critical to unlocking their growth potential. She reaffirmed SMEDA’s commitment to strengthening the SME Registration Portal, expanding advisory and business development services, and supporting SMEs and home-based workers in meeting sustainability and traceability requirements.

She said the Roadmap is the outcome of a year-long consultative process that identifies sector challenges and provides a unified framework for simplified registration and compliance. SMEDA, she added, will advance the SME One Window Initiative and ensure informal enterprises are engaged in policy dialogue through both digital and physical platforms.

Jehangir Seth also announced that ILO and SMEDA will jointly roll out nationwide awareness campaigns, capacity-building workshops and technical support programmes to help SMEs transition into the formal economy. Helpdesks in Lahore and Karachi are already operational, while new digital tools, enterprise training modules and sector-specific pilot projects will support SMEs in integrating into national and global value chains.

ILO Country Director Geir T. Tonstol reaffirmed the organisation’s commitment to supporting the Government of Pakistan and SMEDA, saying the Roadmap’s focus on simplified procedures, improved compliance and alignment with global standards would help build a more resilient and inclusive economy.

Pakistan continues to face widespread informality, with an estimated 84 percent of the workforce employed outside the formal sector, underscoring the scale and urgency of the reform effort.