CGE Report: Women Economic Empowerment programmes; with Deputy Minister

Meeting report

The Portfolio Committee on Small Business Development and the Deputy Minister, Mr Sidumo Dlamini, met with the Commission for Gender Equality (CGE) to consider the Commission's 2020 report entitled "Sink or Swim: The Challenges of Implementing Government's Women Economic Empowerment Programmes in South Africa."

The Committee accepted an apology from the Minister on Small Business Development, Ms Stella Ndabeni-Abrahams, who was attending a Cabinet meeting.

CGE Overview

Commissioner Tamara Mathebula, CGE Chairperson, said that the CGE was delighted to present the "Sink or Swim" presentation's findings and binding recommendations to the Committee. The report was based on the 2019/20 study that sought to explore programmatic interventions done in the Department of Trade, Industry and Economic Development (DTIED) and the Department of Small Business Development (DSBD). This was done through agencies and organisations to promote women’s economic empowerment (WEE).

The CGE was interested to see the progress achieved through these interventions and how South Africa had performed in achieving economic empowerment targets. This was in line with the existing policies and legislative framework to strengthen the effectiveness of government and private sector women’s economic empowerment.

The CGE Chairperson said the goals may be achieved through the use of targeted interventions in the government and private sector to provide targeted and sustained support for women’s entrepreneurial interventions from incubation to the phase where organisations can run these small businesses on their own.

The CGE had made strong recommendations, which revolved around strengthening policies for women’s economic empowerment which were in line with the targets set at the Presidential call in 2020 to serve at least 40% of public procurement for women-owned businesses.

Sink or Swim: research report

Ms Lindelwa Motha, Researcher, CGE, said the report examined the role of the Broad-Based Black Economic Empowerment (B-BBEE) Commission for the Department of Trade and Industry (DTI), while for the Department of Small Business Development (DSBD), the study assessed the Small Enterprise Development Agency (SEDA) established to support business enterprises, including those owned by women.

The research report had used qualitative research methods, with an emphasis on in-depth interviews with key senior government officials from selected departments and beneficiaries from the women’s economic empowerment programme.

Study findings

B’avumile Skills Development Programme

The B’avumile Skills Development Programme focused on identifying talent in the clothing, textile, arts, and crafts sectors among women. The CGE noted challenges due to a lack of information on the programme and the effectiveness of its implementation, which made it difficult to assess to what extent it met its key objectives of economically empowering the women who were selected as its beneficiaries.

The DTI and DSBD failed to have clearly defined indicators to measure the success of interventions made through the programme. The limited human resource capacity in the Department was another constraint experienced by the programme.

Isivande Women’s Fund (IWF)

The IWF, founded by the DTI, was to fill the gap experienced by women struggling to secure loans for their businesses. The forensic audit report from SizweNtsalubaGobodo (SNG) indicated problems related to:

• The financing provided by the fund was unaffordable for small, medium and micro enterprises (SMMEs), as the terms for financing were not different from those of a conventional corporate funder.
• Some of the financing requirements were too stringent for a government development intervention.

It was further found that the stringent IWF loan funding conditions may be a contributor to problems relating to the management of recipients to ensure compliance, reporting and repayment of the loan funds.

Another challenge was the failure to repay loan funds and the need to pursue litigation, which was costly, and a very harsh option for the beneficiaries who often lost their pensions and retirement funds due to attachment to recoup the loan funds. Other notable problems were related to severe cash flow issues, business financing difficulties and legal and other management problems.

Technology for Women in Business (TWIB)

TWIB, founded under the DTI, aimed to fast-track business growth through partnerships, education, mentoring and training for female entrepreneurs who used technology at all levels of business, from micro to macro enterprises.

Beneficiaries interviewed found the programme to be helpful. The SNG audit found that the funds did not relate to the impact achieved by the programme, and that the TWIB Award in support for technology should be discontinued, and rather be implemented in the Small Enterprise Development Agency (SEDA) technology programme. The programme had been discontinued in 2015.

Challenges were related to the emphasis on the TWIB Awards prizes, rather than the central objective of empowering recipients. In addition, follow-ups were not conducted to track the progress of participants in their various businesses.

South African Women Entrepreneurs’ Network (SAWEN)

Mr Velenkosini Thubelihle Zitha, CGE Researcher, said SAWEN had been founded by the DTI to fast-track support provided to women to address challenges faced when establishing, strengthening and sustaining their enterprises by referring them to partners such as SEDA and the South African Revenue Service (SARS).

Most participants said that they experienced the impact SAWEN had on their businesses as they grew. Beneficiaries also felt that it was vital for them to acquire more entrepreneurial skills to benefit

their businesses, from information received through to skills development courses attended. SAWEN allowed beneficiaries to go overseas to network with other female entrepreneurs and exchange business advice.

The programme suffered from insufficient funding, while some businesses required funding to grow and improve the efficiency of business operations. It was alleged that programme coordinators displayed favouritism in the treatment and allocation of opportunities among beneficiaries. SAWEN beneficiaries did not necessarily receive improved access to financial institutions by women black-owned SMMEs.

SEDA - Women Enterprise Coaching Programme (WECP)

The WCEP experienced challenges regarding access and organisation of the sessions. There was also an inability to reach consensus, and the interruption of the absence of learning had resulted in not reaping the full rewards of the coaching sessions.

Key issues from the findings

The CGE found that a lack of policy clarity and coherence in the application of the principle of WEE was evident in some of the practical difficulties experienced in the implementation by the entities. Poor policy clarity when implementing the principles of WEE had resulted in lack of clear linkages between the individual programmes and the government’s broader strategic policy objectives on WEE.

Programmes were also characterised as having varying degrees of poor administrative management, poor record-keeping, poor information dissemination and a lack of effective coordination from a central or departmental perspective. It was observed that these WEE programmes were not usually accompanied by ongoing, sustained and coherent support services for the beneficiaries in the developmental stages of inception. Departmental human resource constraints resulted in numerous strategic problems.

The CGE reported that the policy was not supported by a clear and widely understood definition of what WEE is, and what it would entail in terms of practical and impactful programmes. Despite significant access to financial and other resources available through departmental initiatives, the haphazard and inconsistent implementation processes for these programmes hampered the prospects of achieving programme objectives or a systemic impact.

The CGE concluded that the empowerment programmes in the study failed due to a lack of ongoing and effective post-loan support services, especially during the first few years of existence, when many business enterprises are extremely vulnerable to collapse, while the individual women’s economic empowerment support initiatives did not clearly articulate the policy goals of government.

Recommendations

The CGE recommended that:

• Government’s policy on women’s economic empowerment be clearly articulated through public policy documents in the DTI and DSBD.
• Policy clarification should entail a clear policy definition of what WEE means in terms of policy and practice, accompanied by clear policy objectives which government seeks to achieve, and clear targets, time frames and clearly defined indicators of success.
• Government’s economic empowerment initiatives must be accompanied by effective, informative programmes and initiatives targeting specifically intended beneficiaries, particularly women in disadvantaged rural and urban socio-economic groups.
• After skills training and loans are disbursed to new beneficiaries, there must be ongoing, consistent, sustained and effective support provided to loan recipients.

Discussion

The Chairperson emphasised the relevance of the report, as the CGE would have two years to follow up on these issues. She felt that the issues of women’s economic empowerment should not be the responsibility of two departments, but rather a concern for all departments based on the high unemployment demographics for youth and women.

Mr J De Villiers (DA) said the main areas for improvement were surrounding clarity on policy for women’s economic empowerment and better execution of programmes. He felt that this was positive, as it allowed departments to formulate clear objectives for improvement based on the report.

He said it hindered the Committee, when important presentations are made, that the Minister of Small Business Development had not attended the past 12 consecutive meetings. He asked how the Committee would ensure the necessary oversight occurred on these projects was implemented when the Minister was not present for the meetings. Irrespective of politics, the Minister had a responsibility to attend the Portfolio Committee meetings.

The Chairperson noted the concerns and said that the meeting times for the Committee should be reviewed, as they conflicted with Cabinet meeting times. She felt the matter must be investigated and addressed.

Mr F Jacobs (ANC) shared the concerns of Mr De Villiers that the Committee must prioritise women’s economic empowerment. The Committee should go through the report in detail to ensure that the recommendations were implemented. He shared the sentiments of the Chairperson that these issues went beyond just two departments. The recommendations on policy and implementation were well noted, and the Committee must assist in ensuring better coordination in these respects.

Ms B Mathulelwa (EFF) agreed that WEE should form part of the top priorities for the Committee. She also shared the concern regarding the Minister’s attendance at meetings. She recognised the importance of the Minister attending Cabinet meetings but felt that this had gone on for too long. The Minister was the one responsible for requesting a change of date and time for the meeting, not the Chairperson. She asked that the Minister report to the Committee explain the reasons for her absenteeism, and to decide on a schedule going forward.

The Chairperson explained that she was affording solutions, not delivering excuses on the Minister’s behalf.

Mr E Myeni (ANC) agreed that issues surrounding the Minister should be resolved quickly. He asked the CGE how the programmes in the report had been chosen. He also asked whether the methodology of interviews with the key stakeholders had revealed any weaknesses, due to the lack of statistics and demographics included.

Deputy Minister’s remarks

Deputy Minister Dlamini agreed that other departments should be working together to achieve the women’s economic empowerment goals established by government. The DSBD was already working with the DTI and others to engage on this topic.

The DSBD was currently involved in provincial visits with the Minister to hear the plight of women and youth in South Africa. The presentation had reflected work from a greater perspective for the Department.

The Chairperson asked the CGE what they planned to do to investigate how to get compliance in these areas. She said all relevant stakeholders and institutions should be involved in the matter to enhance and assist the Committee to uphold their governmental duties.

CGE's response

Mr Zitha responded to the sampling methods used in conducting the study and said that the purposive, qualitative methods focused on the specific programmes with measures for women’s economic empowerment. There had been a problem in gaining relevant information sought from the Department due to poor administrative management, record keeping and dissemination issues. This had hindered the CGE from reaching out to beneficiaries.

Ms Mathebula noted the inputs made. (Her response was cut off due to poor internet connectivity.)

The Chairperson requested that the CGE chairperson provide a written response that could be circulated to all Members.

Committee minutes

The minutes of 2 March 2022 were adopted.

The Chairperson urged the Committee Members to respect each other and interact in a way where views could be expressed in a dignified manner.

The meeting was adjourned.