Cost of Doing Business, Bureaucratic Red-Tape & Access to Markets: Content Advisor briefing

Small Business Development

04 September 2019
Chairperson: Ms V Siwela (ANC)
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Meeting Summary

The Committee received a briefing on bureaucratic red tape. The objective of brief was to provide Members with a summary of activities or practices that could potentially be regarded or defined as “red tape” or “bureaucratic red tape”, distinction or similarity between the two, and measures to mitigate possible undesirable consequences for small enterprises. 

Members welcomed the brief report and felt that the Content Advisor should establish a list of priorities that the Committee should focus on in the Sixth Parliament. They further advised that the Small Enterprise Finance Agency and the Small Enterprise Development Agency offices should be made accessible in each and every municipality and district.

Members condemned the spate of attacks against foreign nationals and suggested that the Committee should issue a public statement. There was a view that the Department of Small Business Development should move fast and introduce legislation that protected people in the small business domain. Countries such as Ghana, Tanzania and Zimbabwe had laws that excluded foreign nationals from operating in informal sector.
 

Meeting report

Opening remarks
The Chairperson stated that the Committee was meeting at a time when there was a crisis in in the country. There was gender based violence and xenophobic outbreak. She remarked that the Constitution should be respected. It was very sad that the rights of the people were being violated by monsters and criminals.

Mr V Zungula (ATM) welcomed the remarks. He stated that the government did not find a durable solution in relation to the 2008 xenophobic violence. In his view, the Department of Small Business Development should move fast and introduce a legislation that protected people in the small business domain. Countries such as Ghana, Tanzania and Zimbabwe had laws that excluded foreign nationals from operating in informal sector.

Mr M Hendricks (Al Jamah–ah) felt that the introduction of legislation was not a matter of urgency. There was a need for engagement on the matter so as to find a way forward.

Mr H Kruger (DA) agreed with both views. In his view, there was no one permanent solution to address xenophobic violence, but there was a need for a procedure to be put in place to deal with the involvement of foreign nationals in the small business sector.

The Chairperson stated that the Minister had embarked on finding a solution on this matter. The matter should be dealt in a professional way.

The Chairperson noted the apologies from 2 Members’.

Consideration and adoption of the minutes
Minutes of 10 July 2019 was considered and adopted with minor amendments.

Minutes of 21 August 2019 was considered and adopted with minor amendments.

Unpacking of the Bureaucratic Red Tape
Mr Sibusiso Gumede, Committee Content Advisor, took the Committee through the brief report. The objective of the brief report was to provide Members with a summary of activities or practices that could potentially be regarded or defined as “red tape” or “bureaucratic red tape”, distinction or similarity between the two, and measures to mitigate possible undesirable consequences for small enterprises.  

The report highlighted the regulatory impact assessment, the Socio-Economic Impact Assessment System (SEIAS), the Red Tape Reduction Programme, the Red Tape Impact Assessment Bill, the Guidelines for reducing Municipal Red Tape Re-Visited, the World Bank Ease of Doing Business Index, the Entrepreneurial Life Cycle (in terms of the role of the state sector),the Companies and Intellectual Property Commission (CIPC), the South African Revenue Services (SARS), the banking account, the Black Economic Empowerment (BEE), the share certificate, the National Supplier Database, the Construction Industry Development Board (CIDB), the tendering process, Bridging the Divide between the Small and Well-established Businesses, the Sale of Tender Documents, the cancellation of bids, briefing sessions, the late payment of service providers, and other exclusionary practices.

He concluded the brief presentation by taking the Committee through a number of recommendations. 

Discussion
Mr Kruger welcomed recommendations and sought clarity on how the Small Enterprise Finance Agency (SEFA) and the Small Enterprise Development Agency (SEDA) could have offices in all municipalities and districts.

Mr Zungula commented on the involvement of foreign nationals in the small business space. Their competition with locals contributed to the crisis of xenophobic violence. He stressed that foreign nationals were operating legally and they were meeting small business trading requirements. They were being attacked unnecessarily. People should not be allowed to take the law into their own hands. It was incumbent on the legislature to introduce a law that prohibited non-citizens to engage in small business or a law that stipulated that a non-citizen could not be employed in a position in which a citizen could work. Some countries such as Tanzania, Zimbabwe and Ghana had legislation which restricted non-citizens from trading in small business. These laws were strictly applied. Other African countries were getting it right because there were laws restricting non-citizens from trading in small business. There was no such competition between non-citizens and citizens. He emphasised that the Committee should pronounce its position through the media. It should not sit idly when the people killing each other were those in the small business sector. Finally, he welcomed the presentation and sought clarity on recommendation 7 and how recommendation 8.1 would be implemented.

Mr Hendricks remarked that the brief report provided a concise summary.

Prof C Msimang (IFP) supported remarks of Mr Kruger on SEFA and SEDA. There should be a SEDA and SEFA desk in each district and municipality and this would help them to have a small business office at local level. In his constituency, small business services were not accessible.

Mr E Myeni (ANC) remarked that the brief report touched on everything. The Committee should issue a public condemnation of the xenophobic violence. SEDA and SEFA should be in every municipality or district.

On the xenophobic outbreak, the Chairperson said that policies should be implemented uniformly. It was the duty of the Committee to make sure that the government was accountable. The problem of attacking foreign nationals working in the small business sector should be diagnosed. The government should find a way of resolving this matter. She stressed that SEFA and SEDA ought to provide services in all municipalities and districts.

Mr Kruger remarked that the Content Advisor should make a list of issues to be prioritised. These issues ought to be considered and adopted in the next meeting.

Mr King Kunene, Committee Secretary, stated that the Content Advisor provide the background on issues that the 6th Parliament should be dealing with. There was a need for a Committee strategic plan to address how it would deal with issues presented to it. The Strategic Plan would provide Members with priorities and these would be accompanied with deadlines.

The Chairperson stated that the Department had not yet established its strategic plan. When developing the Committee’s strategic plan, it takes into consideration the departmental strategic plan in terms of monitoring the departmental performance.  On the attacks against foreign nationals, the Committee needed to engage with the Department of Home Affairs to find out what it was doing. The Committee could then take it from there.

Mr Kruger remarked that the position of the Committee on the attacks on foreign nationals should be announced publicly. The statement should be developed and all members should contribute to its development.

Mr Zungula proposed that the statement of the Committee should be written by the Chairperson and not by all Members. He called for the Committee to note that recommendation 7 was a very urgent matter.

Mr H April (ANC) stated that the statement was important and urgent, simply because small businesses were under attack in all communities.

The Chairperson said that the statement would not contain her own view. Rather, the statement would contain a national view or a national position on xenophobic violence.

The meeting was adjourned.

 

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