Strategic Plan of the Portfolio Committee: consideration

Small Business Development

07 April 2016
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Committee Content Advisor presented the draft strategic objectives to the Committee. The draft included strategic objectives that were recommended and deliberated on by Committee Members at a strategic planning workshop earlier this year. At the workshop Members developed strategies for a sound vision, mission and strategic plan that should act as a springboard to develop a master plan for the development of cooperatives and with small, medium and micro enterprises that would be known and followed by all in government. The draft needed to be reviewed because it would be a credible data source on small, medium and micro enterprises and cooperatives; a review of the current model of intermediaries that were using micro finance; to produce a commercial plan to deal with impediments to small, medium and micro enterprises development goals and promotion, including financial regulations; and also to conduct a government review of all businesses to assess whether special conditions were required.

Most of the objective points were centred on the mitigation of aligning the mandate of Parliament with the objects of the Committee. The first half of the document held the vision, mission and mandate, which were similar to all other committees across Parliament. The crafting of the document focused mainly on where the Committee would like to see its legislation represented. These included the National Development Plan in order to achieve 90% of the nine million jobs targeted for 2030, the Medium Term Strategic Framework, where unemployment had to decrease by 14% by 2020; the eradication of poverty and other policies emanating from the State of the Nation Address from 2014 to 2016. Amendments were made to the documents to ensure that rural businesses were not forgotten. Issues with regard to the Small Enterprise Development Agency and Small Enterprise Finance Agency with regard to payment of services were also addressed and included in the document. Other government departments were also addressed in amendments made in the document. The document was not adopted; it would be adopted at the next Committee meeting.

Meeting report

The Committee Content Advisor presented the strategic objective document to the Committee. The document was discussed, with amendments made to some of the strategic objectives as well as to the layout of the document. The document had an open space for target dates to be set, whereby the Committee would reach the objectives. These targets were not set or put into place because of additional input needed by departmental project officials.

Mr H Kruger (DA) asked the Chairperson if he was in the right Committee because on all documents presented, the Committee was labelled as the Portfolio Committee of Small Business Development. He thought it was supposed to be named, as previously agreed, the Portfolio Committee of Small Co-operative Business Development.

The Chairperson responded that although he was joking he was correct. The name of the Committee needed to be changed because it would send a message to the powers that had the authority to change the name. It was not about the name of the Committee alone, but rather about a broader understanding of what the country could achieve if co-operatives could be profiled in the same way in which a small business enterprise was profiled. Having the name changed would send a different message because community economic development would take the country out of the economic downturn, which the country was experiencing. The more people the country had that were economically active and able to sustain themselves, the better the country would be. More taxpayers were needed and families that were sustainable and self-sufficient and able to pay for services provided by government. This would result in viable municipalities that are able to provide the basic services that are required. That message would come through the Committee pushing for cooperatives to be treated as an instrument for economic transformation in the country and enable communities to participate in the economy.

The Committee met to consider the strategic plan. Following this exercise would be the development of the Annual Performance Plan (APP). The Content Advisor, with the facilitators, would take the Committee through this process. The main objective of the meeting was to go through the strategic plan that came about after the workshop Committee Members attended which took them through and trained members on how to develop a strategic plan. The Committee then planned their strategy plan for the year. The document held Members own input, which needed to be reviewed in terms of Members understanding and to look if there was something Members missed out and did not feature in the document. This process would also give clarity to Members that were not present, on how to use the document. Once the strategic plan was adopted it would become the bible for holding the Department accountable to ask and ensure that Members asked relevant questions and were able to use the document to reprioritise the budget if they thought the budget was not addressing what it was supposed to address. It would also allow the Committee to be specific in terms of dictating what exactly the Committee wanted the Department to do in order for them to have the strategic plan and entities that related to the medium term expenditure framework.

Mr Sibusiso Khuzwayo, Content Advisor, thanked the Chairperson. Most of the inputs by Committee Members were already captured during the strategic planning session, which happened on the 26 February 2016.The way forward would be to identify the gaps in the document for areas which need to be beefed up. Some meat also needed to be placed on the strategy document so that anyone who reads the document and was absent during the strategy session would be able to follow what was happening. The point of going through the document was to make sure it was aligned with Parliament. The template used in this document was a reference to the strategic plan of Parliament. Therefore in terms of the vision, mission and mandate, the strategic planning in this document did not depart much from the strategic plan of Parliament. The alignment of the strategic plan was close to the National Development Plan (NDP), which was where the Committee saw themselves twelve years from now. In the document the areas of the NDP that the Committee needed to focus on was highlighted. Particular attention needed to be paid to chapter three and chapter six of the NDP.

The alignment between the Medium Term Strategic Framework (MTSF) and the NDP was also looked at. The MTSF would be the instrument to help the Committee achieve the objective encapsulated in the NDP. The MTSF ran up till 2019. Particular chapters were critical; not just for the Department but also for the Portfolio Committee in terms of making sure that it achieved its mandate. Legislative papers were also added under the small business sector. This was for the benefits of the Members just to see since the dawn of democracy, where exactly we came from, to see what sort of policy measures and instruments had been proposed by the government and various state departments. This had been divided in small medium and micro enterprises (SMME’s) development. For instance the discussion papers since 1994, which led to the notice 213 of 1995 which also led to the creation of the act itself in 1996.

Mr Khuzwayo then went through the document page by page.

Mr Kruger noted that only this document could be utilised because the other two documents could not be edited, as the Portfolio Committee did not have power to change it. The draft document was the only document the Committee could work with.


The Chairperson said Mr Kruger was correct, but the Content Advisor still had the responsibility to take Members through the other documents.

Mr Khuzwayo then asked Members to turn to page five of the strategic draft plan. He made reference to the vision, mission and values in the strategic document. These were similar across all portfolio committees. In terms of the mandate, it was the same across all portfolio committees in Parliament.

Mr Khuzwayo asked Members to turn to page seven. He asked the Chairperson if he could rather take questions for clarity as Members read through the document.

Reverend K Meshoe (ACDP) said going over the draft plan was usually done paragraph by paragraph.

Mr X Mabasa (ANC) agreed with Mr Meshoe and suggested Members note their questions while the Content Advisor went through the document, and ask questions during a set period, so that the Content Advisor could cover all of the content in the document.

Mr Khuzwayo then referred members to page five again. The region covered was similar and the same across other portfolio committee strategic plans. The vision of the Portfolio Committee was extracted from the vision of Parliament. This was on the 5th page of 38: The mission and values were also the same across all portfolio committees and was also extracted from the mission of Parliament. The mandate was also extracted from the mandate of the Parliament, however on the last page, on page 7 of 38, was where the Committee duties of how they would participate in the actual roles and functions of the Committee, Its oversights functioning and monitoring in terms of the small business sector. He asked if Members would want to put their input in there, or to look if perhaps some paragraphs were not captured accurately.

He then asked Members to turn to page seven, of 38. Point 4.1 was where the alignment was added with the NDP, as far as the small business sector was concerned and the Portfolio Committee’s function as far as the NDP was concerned. According to the NDP, the small business sector should create at least 11 million jobs by 2020.He zoomed in on the chapters of interest of the Department and Portfolio Committee. This was chapters three and six of the NDP and could be found on page 8 of 38 as an area that could be of interest for Members. The Committee also have a specific interest where the NDP was concerned. He also looked at the alignment of the MTSF.

Mr S Bekwa (ANC) proposed Members went through the paragraphs mentioned together. This would give Members clarity on what they need to do and where they could make changes, as had been the culture of all meetings in Parliament.

Mr Khuzwayo then referred Members to chapter three on page eight of 38, which spoke to Members about unemployment. As far as the NDP was concerned on chapters not only relevant to the Portfolio Committee but also areas that he considered critical for the Department of Small Business Development, such as chapter three, concerning unemployment. The NDP said unemployment should fall from 29.4% in June 2012 to at least 14% by 2020, and to six percent by 2030. It also said that total employment rates should rise from 13 million to fourteen million by 2020. He asked Mr Meshoe if he wanted him to go through the document bullet by bullet point for this particular area.

Mr Meshoe said he needed to highlight the points that were most important for the Committee to go over.

The Chairperson understood that from page seven the document began to speak to the Portfolio Committee and the work of the Department of Small Business Development. The preceding pages were what all other portfolio committees should be doing, taken from the strategic plan of Parliament. She asked the Content Advisor to focus on the subheadings and explain them to the Committee in one sentence, to give an idea of what the various chapters were about. Chapter three spoke about economic unemployment. In relation to unemployment, ninety million jobs were expected from the small business enterprise.


The Content Advisor then asked everyone to move on to chapter six, which spokes about procedures to include the rural economy. This section stated that twenty six thousand jobs should come from this particular sector. As far as small business development was concerned and in terms of the co-operatives, unemployment was an area of particular importance that the Portfolio Committee should pay attention to. There were other chapters in the NDP that were important for the committee, but not everything could be covered. He also looked at the MTSF as far as the Portfolio Committee was concerned.

Members proceeded to, Point 4.2, paragraph 2 on page nine. In terms of the MTSF, the mandate of the Department stated that over the medium term, the Department would focus on increasing the number of small enterprises; review the strategy for SMME development and entrepreneurship; develop and support co-operatives; and develop the market penetration strategy for small enterprises which was still a major concern. This could be achieved through signing with other transversal partnerships. This would support incubators for small enterprises. This was had been a concern because the issue of small enterprises was raised imperatively because the incubators were more biased towards SMME’s only, and tended to ignore co-operatives.

The Department would also strengthen each operational capacity building initiative, through the staff, and addressing the issue of high vacancy rates. This was for the benefit of the Members to see in terms of the SMME and co-operative development in the country, since the dawn of democracy, where we come from and what sort of policy instruments and measures had been put in place. The SMME and co-operatives were separated. This was found page ten. By focusing on the discussion of 1994- notice 213 of 1995, which led to the creation of a unit in the Department of Trade and Industry (dti), from accommodation that came out of notice 213.This included, among others, the creation of the Small Business Council, business development agency and the creation of the provincial economic affairs in various provinces. This also led to the creation of Act 102 in 1996, which was the act still used today. The amendment bill of 2003, which spoke about the Ntsika Enterprise promotions agency was also taken into account within the content draft document.

Mr Khuzwayo then focused on corporate development and looked at what sort of policy measures were put in place since 1994. In 2004, there was a cooperative development policy, which was the country’s first unequivocal document. The Co-operative Act of 2005 followed this, regulations in 2007. Moving onto page 11 of 38, the integrated strategy of cooperatives. Point 4.33- the SONA, briefly touched on the SONA of 2004 where President Jacob Zuma announced the creation of the Department of Small Business Development and consequently the creation of the Small Business portfolio committee. The highlighted bullet points touched on the interests of the SMME’s sector and the cooperative.

Page 12 looked at the 2015 SONA where key policy objectives and variables for the year ahead were posed. This included, for instance revitalising agriculture and processing value change. Unlocking the potential of SMME’s, cooperatives, township and rural enterprises. This was critical for fulfilment of the Committee’s mandate.

Areas highlighted in the SONA of 2016 by the president were underscored by the need to empower SMME’s and to accelerate growth.

On page thirteen, on the strategic goals, h advised that this section would be better if read with the strategy of the Department These were goals from Parliament and there is nothing much to add or amend.

Page thirteen, number six, the situational analysis was about the state of our economy, the challenges faced as far as the SMME sector was concerned. Recommendations of how we could mitigate those challenges. The situational analysis went from page thirteen to page sixteen. On the last page, in line with the Parliament strategic plan, and in order to perform to its mandate, the Portfolio Committee on Small Business had developed twenty nine strategy objectives. Each objective was strategically aligned with the objectives of the fifth Parliament. The areas that spilt over from the fourth parliament were taken over by this particular department. In terms of this template, there was no way one could zoom on those, but maybe devise areas of discussion. He would circulate it in due course.


On page 17, Point eight, the strategy of Parliament; To enhance public involvement in the activities of Parliament, to deepen international engagement of Parliament, to promote cooperative governance and priority five, legislative impact and assessment.

Many priorities were similar across all portfolio committees. There was not much to change, but perhaps to zoom in the NDP and MTSF.

The real work of Committee Members was found on the page nineteen of 38. He proposed Members read the document together with inputs that Members made in the strategic planning workshop held on the 26 of February. He took those proposals and plugged it in with the template and aligned it with the strategic goals of Parliament. He took all objectives and plugged them in with the strategic objectives of the Portfolio Committee. While doing this he counted the objectives in the session. The final total was thirty strategic objectives that the committee came up with on page 19 of 38.

The first column on page 22 of 38 was a repetition of the strategic objectives, covered from page nineteen. The objectives here on the right hand side of the column, the indicators are included. Members created these indicators during the strategic planning session.

The Content Advisor then went through the points with Members, taking questions and noting all amendments that needed to be made.


Mr R Chance (DA) asked why the target column was blank.

The Content Advisor replied that once Members were content with the strategic objectives and indicators, the targets would be set. Rushing to develop targets on behalf of the Members when the indicators have not been developed would be premature.

The Chairperson said when she was outlining the agenda for the meeting, she indicated that the next exercise would be the development of the Annual Performance Plan (APP), and therefore the targets would come from the APP because it would say what had been achieved in the financial year.

Mr Khuzwayo said he thought he could work on the targets, but preferred to ask Members if that would be the right way to go about it or also invite members from the project office and have another meeting, whereby the project officers could develop their own targets.

Mr Kruger suggested that the best way would be for the office to set targets, and have a session where they could change it. Some targets would change; other would be the same as other portfolio committees. The Committee needed to go through it to start the process, it would be better if the office set some targets there and sets some guidelines.

Mr Xolisile Mgxaji (ANC) suggested Members set the goal by the end of the first quarter. He asked Members to recall that the targets were already set in the Committee’s previous engagement. By the end of the first quarter the Committee should be one hundred percent sure. Those targets need to be consulted and confirmed by the Chairperson

Mr Khuzwayo asked members if they should take it on themselves to set targets now or have an additional session to do so?

The Chairperson said when the workshop would take place for Members to work with the project office would be decided at a management level and could not be decided in a strategic meeting.

Mr Khuzwayo moved to part C, on page 38 of the document, the risk management section. The exact propositions of Members were taken into place during the strategic session. This section highlighted risk proposed by the Committee as well as litigation methods. The template highlighted the risks faced by this Committee and the mitigation measures. The main concern, in terms of the risks, was that people who were not part of the strategic planning session on the day may struggle to read the risks and tally the litigation methods. For example in terms of making amendments to the risks, for instance the budget, the mitigation measures may not speak to the risk that was identified. There were other risks identified whereby the mitigation measures did not necessarily speak to what had been identified as a risk. Caution must be taken when making amendments, to make sure that Members who were not part of the strategic planning session, could still follow what was meant by stating the risk and mitigation measures.

The risks started from page 33 till page 37.

Mr Chance asked if other risks were related to the strategic objectives. He suggested adding a column on the left to add the strategic objectives.

The Content Advisor said he would do so. The risks were from work done previously. That could be a reason why the risks did not speak to the mitigation measures.

The Chairperson understood the layout would be the strategic objectives in column one, column two would have the indicators, column three would have the risks and column four would have the mitigating measures. Except that next to the column of the indicators, when dealing with the APP, was where the Content Advisor would only take the strategic plan, the indicator and the targets. It doesn’t make sense to separate the columns, as one could not see the complete picture.

The Content Advisor asked if he could do a separate version for the members.

Mr Mgxaji said there was nothing wrong with what was done because a template could be edited and changed. The font could also be changed for everything to fit, or you could add an additional page, there would be nothing wrong with that.

Mr Chance asked if they would need to use a bigger font when adding the column

The Chairperson asked the Content Advisor to add the column and have more words going down instead of horizontal.

The Chairperson asked the Content Advisor to put the strategic objectives in column one, indicators as column two, risks as column three and mitigation measures as column four. This would allow Members to see the complete picture, and link the risks and mitigating measures to the strategic objectives.

The Chairperson said to keep the bullet points and narrow the space to the left of the document.

The content advisor advised that the bullet points were the points the Members proposed in the strategic meeting. There were minimal changes in sentence structure and doing away with acronyms, etc. He moved to the last page, page 38. Nothing was done in terms of resource allocation. He needed to sit down with other members and come up with projection. He did not have the resources. It should not take long, the next draft would consist of the draft budget. He asked for input from members.

Mr Mabasa said the Committee needed to find out from management, for 2014 and 2015 colleagues were given a certain amount for the committee. This year it would be changed to a zero budget. Mr Mabasa and Mr S Bekwa did the projection. They could not reach a decision as they were still waiting on a direct decision from the managers about the zero budget.

The Content Advisor thanked members for their input as now that the document was consolidated he could easily identify where the gaps lay and see what areas we need to consider for inclusion and direction for going forward. An example of this could be seen in terms of the document developed during the strategic planning session. At first there were 29 strategic objectives. Some of the work that went through, for example capacity building initiatives would now also be included. What other portfolio committees were doing also needs to be taken into account. The team should come up with an initiative and perhaps find out how many capacity initiatives Members had attended and could possibly attend. That was just one example. Mr Khuzwayo knew of areas that affected the SMMEs and co-operatives directly such as the payment of goods and services. The function had been given to SEDA, an agency of the Department. This section was supposed to be held accountable by the Department. It was an important issue and an area Committee Members needed to look into. They needed to take that particular function and ask those in power to come in and explain themselves. Unfortunately the Department and SEDA did not have the power to do so. Therefore if nothing were done that issue would remain unresolved for years to come. This issue had been spoken about for very long time and nothing has been done about it. This issue was also covered in the strategic plan on how the Small Business Department was held accountable to make sure that that particular act was amended. These were some of the things that were picked up and critical for the Committee to go forward.

The Chairperson then said she needed to engage with the issue of the PFMA as it was discussed on numerous occasions and needed attention. This point was also addressed during the strategic plan when they were looking at the Department’s presentation as their legislation. That would be looked at during the MTEF period. The National Small Business act that also needed review. There were also a number of other acts that impacted the Department negatively. The Committee questioned the input made by stakeholders during the Small Business Development Institute policy colloquial. They were not only discussing the amendment of the national act of small business. They also discussed the presentation about the number of products in different countries were much higher than the products in South Africa. They were highlighting where the areas of unconstitutionality came from. This was supposed to form part of the Committee’s work in terms of the legislations, if we want to see what we planned in our legislation to open space for small business enterprises in the mainstream economy.

Mr Mgxaji, with regard to the thirty-day payment, said it was discussed, as the programme was that year. It fell under the Department of Monitoring and Evaluation. The development group of the department was still in progress of monitoring the Ministers progress of action on the matter. This issue was discussed lengthily by Mr Mgxaji and his colleagues, and from those discussions it was suggested that the Chairperson should coordinate and resolves issues that the committee faces , which in turn affect other committees and government departments. He suggested that one of the objectives should focus on resolving this matter.

Mr Chance responded that the key point of focus needed to be on the legislation. He suggested that under strategic objective three, on page 22, an amendment should be made. He felt that the indicators for that objective should be the amendment to the National Small Business Act.

Mr Chance said they did need to be done.

Mr Kruger said on page 18, the second bullet-micro informal traders also need to be added to that point.

The Chairperson responded to this by saying that by increasing the small enterprises, particularly the street vendors, those at survival level, the street vendors, and spaza shops and informal traders. She agreed with Mr Kruger on his point. She recommended that at the point where it said developing co-operatives, they should add that they should to be positioned as an instrument for community and economic development.

Mr Chance said that we should not only refer to micro business, but refer to each strategy of business, from micro business up to high trade business, this period could not be ignored. He suggested that the full spectrum should be the way the business was expressed. The Committee need to bear in mind what the strategic review of the Department’s programme recommended which the Department accepted. This was not deeply supportive and played a broad facilitator role. As the committee heard yesterday, the Department could not do everything and needed to provide the quality of strategic guidelines of the sector as a whole, both the public and the private sector to achieve those objectives.

The Chairperson told the content advisor to take that point town and asked him where he could insert in.

Mr Chance suggested that the Content Advisor should do this out of the meeting, as it would be laborious to put it in now. It was important for her assistant to understand where he could put it in.

Mr T Mulaudzi (ANC) suggested that rural also needed to be included in the business spectrum so it did not slip through the Committee’s fingers.

Mr Kruger suggested that on page 19, the first two strategic objectives need to be moved to the fifth strategic point five because the 2 points assess the impact of law, it was not an oversight.

The Chairperson agreed to this.

The Content Advisor noted this. He then and asked the Chairperson to go back to page 18, the last bullet point - the last section of legislation, which is for the presidential part of the department. If the one section of legislation is accepted then he would not be able to add on inputs. He needed to know if he should finalize the proposed legislation in the document or wait on the department for their input on the matter

The Chairperson, said it was questionable the one legislation section that came from the presidential part of the department. When the matter was previously discussed, it was agreed that they would cover more than one section of legislation. When they discussed this they agreed that it would not be one piece of the department because that section would not cover one piece of legislation.

The content advisor said they would rather leave it open, and add in things as they go along.

It was agreed to adopt the document at the next meeting of the Committee.

The meeting was then adjourned.



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