National Small Enterprise Amendment Bill: DSBD briefing; with Deputy Minister

Meeting report

After the meeting agenda was considered and adopted, Deputy Minister of Small Business Development, Ms Dipuo Peters, was asked to introduce the officials of the Department of Small Business Development (DSBD) so that she may be excused from the meeting to attend another urgent engagement.

The Committee was then taken through their proposed draft programme for the third quarter, which was considered and adopted.

The Chairperson warmly welcomed the Department to give the presentation. She commented that the national elections were drawing near, and noted the many problems which South Africans continued to face every day. She felt hopeful for the presentation, and acknowledged the collaboration between the Committee and the DSBD. The Committee was then presented with the National Small Enterprise Amendment Bill 2023.

National Small Enterprise Amendment Bill, 2023

Ms Thulisile Manzini, Acting Director-General (DG), DSBD, said the National Small Enterprise Amendment Bill, 2023, sought to amend the National Small Enterprise Act, 1996 (Act No. 102 of 1996), primarily to:

• Provide for the establishment and registration, in terms of the Companies Act, No. 71 of 2008, of the Small Enterprise Development Finance Agency (SEDFA) and the subsequent incorporation into SEDFA of the Small Enterprise Financing Agency (SEFA), the Cooperative Banks Development Agency (CBDA) and the Small Enterprise Development Agency (SEDA).
• Provide for the establishment of the Office of the Small Enterprise Ombud Service.
• To enable the Minister to declare certain practices concerning small enterprises to be prohibited as unfair trading practices.
• To have a proposed amendment to section 20(2) of the Act to provide clarity on the interpretation of the powers assigned to the Minister in amending the Schedule to the Act as well as the definition for small enterprises, to allow for simplification of the Schedule;
• Amend the definition for small enterprises.

Ms Manzini said the establishment of the SEDFA gave effect to a Cabinet decision to enable and provide for integrated government support (both financial and non-financial) to small enterprises, including cooperatives. In addition, the amalgamation of the three entities also contributed to the Cabinet-endorsed rationalisation of the number of state-owned enterprises (SOEs). The purpose of SEDFA would be to ensure that the small enterprise and cooperative ecosystem was able to offer the most efficient business advice, business development services, investment support, business facilitation and incubator support. 

The vision of the SEDFA was to be a leading business development entity that would drive economic transformation and inclusive growth in the economy through ensuring the provision of customised financial and non-financial support, and greater access to finance for small, medium and micro enterprises (SMMEs).

The Bill provided for SEDFA to be established as a state-owned company (SOC) in terms of the Companies Act, and for the state to be the sole shareholder, with the Minister as the sole representative of the shareholder. SEDFA operations would be subject to the Public Finance Management Act (PFMA) and the Companies Act.

The Bill set the criteria and composition of the Board, and required it to constitute specified board committees, including an audit and risk committee and a board nominations committee, and to assist in a public and transparent board appointment process.

See attached for full presentation

Discussion

Mr H April (ANC) began by positively commenting that the Bill was a ‘progressive’ one, and he was inclined to support it, as it would surely assist small businesses.

Mr F Jacobs (ANC) echoed the positive sentiments earlier expressed. He suggested that the Committee workshop the details of the Bill. He raised the importance of discussing the Township Bill, given that two provinces had already brought this matter for discussion. Could a section be included that discussed the township economy/township bill based on the Gauteng and KwaZulu-Natal (KZN) model? Could they locate the legislative framework of SEFA? The Committee should also ensure that all the relevant issues are covered in the new Bill. The officials of the Committee and the Department should revisit the Bill, and ensure that all the concerns raised have been properly incorporated. He found the Bill to be exciting and useful for all legislative sectors. Could the Department provide clarity on the timeframes, to better understand them? What were the next steps and what were the targets to be accomplished?

The Chairperson echoed the positive sentiments expressed earlier, and further clarified that the reason why the Portfolio Committee bill was formed was because a concern had been raised about the Committee not having achieved anything for eight years. She urged that they allow the process to be dealt with administratively, as Mr Jacobs had suggested. She was also excited about the Bill. She supported the Department, but also observed the House Rules. She looked forward to being advised by the relevant stakeholders of the programme.

Department's response

Ms Manzini said she was grateful for the many positive comments made about the Bill. She said that because this process was with Parliament, they would be guided accordingly concerning the Committee conducting public consultations and eventually escalating it to the National Assembly for adoption. Regarding SEFA, her understanding was that the Companies Act governed it, so the current transition would not be affected. The Cooperative Banks Development Agency (CBDA) was not repressing some of the provisions on provincial authority.

Mr Mojalefa Mohoto, Chief Director: Enterprise Development, DSBD, said that all legislations which were pertinent to the issue of small businesses were not entirely repealed. Section 14 of the Bill clearly stipulated that the Board of the new entity would have to follow the provisions of the current legislation. Regarding the timelines, once the Bill had been handed over to Parliament, it was their decision on whether or not they would conduct public consultations.

Mr Lungisa Mzizana, a member of the DSBD presentation team, confirmed that the process was in the custody of Parliament. The Bills Office was guiding the process in terms of what the next steps should be. He understood the Committee wanted the process to have its own Committee Bill, to achieve a speedy process of the Bill reaching the level of public consultation, and eventually the National Assembly. The Bills Office would provide guidance on this, if needed.

Further discussion

Mr H Kruger (DA) interjected to apologise for being late for the meeting, and asked for a meeting to discuss the way forward.

The Chairperson responded that they were already in a meeting to discuss the way forward. If he had any proposals, he could put them forward in the meeting.

Mr Kruger said he was agreeable to whatever decision was being made.

Mr S Gumede, Committee Content Advisor, said that his understanding of the meeting was to provide the Department with a platform to present the Bill. From this, the Committee would have to deliberate on charting the way forward. Would this be done at the meeting? Would the Department be excused to allow for this to happen?

The Chairperson responded that they should take advantage of the fact that they were together at that time, but they could not yet deliberate on the Bill.

Mr Mohoto interjected to mention that he had almost forgotten to include that the Executive had given the Department until the end of the financial year to conclude the Bill, as it would enable legislation to finalise the measure. The measure would not take place until the Bill was finalised.

After noting no more questions or comments, the Chairperson requested a return to the meeting agenda, to review the remaining items.

As she was thanking and dismissing the Department, Mr April wanted to congratulate Acting Director-General Manzini on her new position.

Other Committee Members also wished her well in her new position, many of them giving their congratulations in their indigenous languages.

The Chairperson, often switching to her home language, stressed that she was especially proud of DG Manzini because she was one of the youngest women working in her new position. She also said making people feel accepted and welcomed was important.

Ms Manzini responded with gratitude for all the praise and welcome she had received, and promised to do her best to fulfill her duties and to help South Africans. She was proud of the 25 years she had spent in the public service.

Approval of minutes

The minutes of 7 June were considered and adopted.

The Chairperson thanked all the Members for their attendance and encouraged them to put all their energy into their duties, now that they were well-rested.

The meeting was adjourned.