Development Finance Institutions Workshop Report; KZN Oversight Report

Small Business Development

09 November 2016
Chairperson: Ms N Bhengu (ANC)
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Meeting Summary

The Committee met to consider two reports – the first was on the relevance of financial instruments for SMME and Cooperatives. The second report was on the Committee’s oversight visit to KwaZulu-Natal.

In respect of the first report, there was a brief debate about the reporting style of the report and arguments arose as to whether all stakeholders from the Development Finance Institutions were involved and whether those Development Finance Institutions that participated during the workshop were properly recorded in the relevant report. The Committee asserted that the Department needed to expand its knowledge and have the willingness to work with other strategic partners. The report was adopted with amendments.

On the second report, questions arose as to the relevance of the Department’s name being mentioned in the 1996 Act as well as the priority given to the international oversight visits. In addition, the Committee agreed that the Department should review the Co-operatives Incentives Scheme and that where necessary the Portfolio Committee do its own review on the impact of the Scheme. Due to quorum not being met adoption of the report was postponed until the next meeting of the Committee. 

Meeting report

Development Finance Institutions workshop report
Mr R Chance (DA) referred to per page 7 of the report and said a number of presentations were not included in the body of document and asserted that much of the content did not appear on the document report.

Mr Sibusiso Gumede, Committee Content Advisor, said one of the content advisors were absent during the workshop.

Mr Chance said that the minutes did not reflect the workshop and requested that the Chairperson ask the Content staff to add the relevant items. 

The Chairperson responded that some of the presentations were reflected and asserted that these were not minutes but a report. The essence of the workshop was focused on the DFIs and it was not true that the report does not cover the content of the workshop.

Mr Chance agreed, the presentation was mentioned, but not in depth. There should be some consistency in the manner in which reports was written.

Mr N Capa (ANC) said that he would be happy if the Committee could read the pages that were being debated.

Mr X Mabaso (ANC) asked whether if the main issue debated had anything to do with the Committee lacking uniformity in its reporting.

The Chairperson clarified her argument by reading page 13 of the report.

Mr Chance said that the main concern was the manner of reporting and style and asked if any content was lacking in the report that was also not discussed in other meetings.

The Chairperson said that the response she gave was due to the statement that the report did not reflect the content of the workshop, and read through page 13 to show that the report reflected the content of the workshop. She allowed 10 minutes so that Members may read through the report, as a way of showing that the report reflected the workshop.

The Chairperson noted that a report of stakeholder Mr T Johnson was missing.

Mr Chance said Mr Johnson’s presentation was to express that he had experienced difficulty in receiving funding.

The Chairperson said that the essence of Mr Johnson’s presentation was that he had a tool that could help and develop SMME’s, however as he was also a SMME, he also required assistance in terms of funding.

The Chairperson then proposed that the report must reflect the amendment.

Mr Chance said the DFI needed to clarify its agenda as to whether it was developmental or to provide finance.

The Chairperson proposed an expansion of page 30, point 11 to add "So as to enrich their understanding and build these strategic partnerships during the Programme Review”.

In her conclusion the Chairperson said the Portfolio Committee resolved that it was going to visit Mondragon. The Chairperson asserted that there were many relevant lessons to learn from Spain; particularly from the Basque region that had developed itself through cooperatives. The Chairperson continued to explain that the relevance of the international oversight visit to Spain was that South Africa existed on the basis of two worlds. One was a developmental state for the rich and a social welfare for the poor, and this needed to change.

Mr Chance asked as to when the Committee would embark on the visit to Mondragon.

The Chairperson said it was something the Committee needed to discuss.

Mr Mabaso asked how the Committee would integrate the visit to Mondragon with the other visits that had already been agreed upon by the Committee. 

The Chairperson said parliamentary processes only allowed for two international Oversight visits per term.

Mr Mabaso was worried that as an African country to only focus on cooperatives that were not necessarily based in Africa.

The Chairperson said the key issue was to evaluate whether the conditions of the country were similar to Africa. The Committee should not locate the visit on the basis that the country was based in Africa and that it should then be taken as relevant to South African conditions.

Mr Mabaso said the input should be explained as per the Chairperson’s request but should state that a visit to Kenya would not occur due to parliamentary constraints.

Mr Chance asked if the Committee was allowed two visits per annum or one.

The Chairperson responded that the Committee was only allowed two visits per five-year term.

Mr Chance asked if the visit to Mondragon would include the Department of Small Business Development. Mr Chance continued to add that in developing a cooperative strategy one should look broadly and not just at Spain and India.

The Chairperson said the Portfolio Committee endeavoured in study tours to provide feedback on the basis of learned experiences to the Department. The Department would be expected to be part of the study tour and through these tours the Portfolio Committee would then be able to influence the direction of the Department.

Mr Mabaso referred to page 3 and asked whether Kohwa was going to receive land from government and own the land.

Mr Chance said that Kohwa would get the land on the basis of implementing its project and that the land belonged to the Chiefs.

Mr Mabaso asked whether Kohwa would transfer their skills to the community or would all the related projects be implemented by Kohwa.

Mr S Bekwa (ANC) said during their presentation Kohwa had said that in every cooperative they were involved in they would train people to develop relevant skills.

The Chairperson said that in Ulimo which is an area located within the Umziwabantu District municipality; a presentation was done by a person who was not from Kohwa but trained by Kohwa.  The Chairperson continued to say that the question of expanding its expertise would depend on the DSBD and its willingness to form strategic partnership with Kohwa.

The Chairperson concluded that the international visit should be done any date after the Budget Vote.

The report was adopted.

KZN Oversight report

Mr Chance referred to page 4 and queried as to whether the Act of 1996 mentioned the Department of Small Business Development. He asserted that the Act did not mention the Department and concluded that the Department was not created in 1996 but in 2014 and requested the report to be amended.

The Chairperson said that the Ministry was created in line with the 1996 Act.

Mr Chance asked why the Committee did not say that the Act gave force to the Department instead of in line with. The report should read that the Committee was mandated instead of the term delegated.

The Chairperson said in terms of the Constitution it was Parliament that did the oversight and Parliament delegated Portfolio Committees.

Mr K Meshoe (ACDP) said the term mandated would be better than the term delegated, which would assume that the Committee would change at any time.

Mr Capa said perhaps the Committee should use the term constitutionally delegated by Parliament.

Mr Chance said the Co-operatives Incentives Scheme needed to be reviewed and that Kohwa struggled in relation to the support they received through Co- operatives Incentives Scheme. 

The Chairperson said the issue was with that the Department of Small Business Development was not searching for appropriate funding other than the Co-operatives Incentives Scheme.  The Department had designed a funding instrument that was “one size fits all” and that the Department was refusing to form strategic allies with other funding institutions. She had information from Kohwa which expressed the shortfall of the funding received from the Department.

Mr Chance said that the Department should review the CIS and that where necessary the Portfolio Committee do its own review on the impact of the CIS.

The Chairperson agreed and added that the Department should come under one roof with the Portfolio Committee and appreciate the knowledge that exists within the Portfolio Committee.

The Chairperson asserted that in order for cooperatives to exist successfully there was a need to change the strategy currently being used by the Department.

Due to quorum, not being met as members of the Committee left the meeting early, adoption of the report was postponed until the next meeting of the Committee.

Adoption of minutes
Committee minutes dated 2 November 2016 was adopted with minor grammatical and technical amendments.

The meeting was adjourned


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