Hansard: NCOP: Unrevised hansard
House: National Council of Provinces
Date of Meeting: 24 May 2022
Summary
No summary available.
Minutes
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
TUESDAY, 24 MAY 2022
Watch: Plenary
PROCEEDINGS OF THE MINI-PLENARY SESSION OF THE NATIONAL COUNCIL OF PROVINCES
____
The Council met at 14:01.
The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS
The CHAIRPERSON OF THE NCOP: Hon members, before we proceed, I would like to remind you that the virtual mini-plenary is deemed to be in the precinct of Parliament and constitutes a meeting of the National Assembly for debating purposes only. In addition to the Rules of the virtual sittings, the Rules of the National Assembly including the Rules of the debate apply. Members enjoy the same powers and privileges that apply in a sitting of the National Assembly. Members should equally note that anything said in the virtual platform is deemed to have been said to the House and may be Ruled upon.
All members who have locked in, shall be considered to be present and are requested to mute their microphones and only unmute when recognised to speak. This is because the microphones are very sensitive and will pick up noise which might disturb the attention of other members. When recognised to speak, please, unmute your microphone and connect your video. Members may make use of the icons on the bar at the bottom of their screens which has an option that allows the member to put up his or her hand to raise points of order. The Secretariat will assist in alerting the Chairperson the members requesting to speak.
When using the virtual system, members are urged to refrain or desist from unnecessary points of order or interjections. We shall now proceed to the order.
NOTICES OF MOTION
Ms S SHAIKH: Thank you very much hon Chairperson. Hon House Chairperson, I hereby move without notice, on behalf of the ANC that in its next sitting:
The House debates the continuing murders and brutalisation of young girls in the Republic of South Africa with a special reference to the recent murder of
Singwa Namhla Mthwa in the Eastern Cape and many other girls around the country. The continued and unabated killings and brutalisation of women in our country has become a national tragedy and a new pandemic in our society.
Mr T APLENI: Thank you very much hon Chairperson. Chairperson, I rise on behalf of the EFF that at its next sitting: The Council debates the issue of healthcare workers, unemployment particularly that of the Eastern Cape as our health workforce has proven vital in responding to disasters. This would be an opportunity to claim much needed employment opportunities for our women and youth.
Mr Z MKIVA: Good afternoon hon members. Thank you to the Chairperson. I rise to give a notice of a motion on behalf of the African National Congress that in its next sitting:
The Council debates the continuous sabotage and deliberate damage of Eskom infrastructure and its impact on the provision of reliable electricity to communities; Further notes that among the many incidents that were reported recently is the deliberate cutting of a cable at Matla Power Station, near Kriel in Mpumalanga, what is now the fourth incident of suspected sabotage at a power station in the past two weeks; and the incident at Matla Power Station follows suspected sabotage at three other power stations over the past two weeks.
BRONKHORSPRUIT CABLE THIEVES SENTENCED
(Draft Resolution)
Mr E M MTHETHWA: Thank you, House Chair. The African National Congress moves without notice:
That the House -
(1) notes and welcome the Bronkhorstspruit regional court hefty sentence handed down to Enye Kwedu and Happy Dube who were found guilty of stealing copper cables belonging to Eskom
(2) further note that the two men were deservedly sentenced 12 and 16 years respectively behind bars early this
month;
(3) acknowledges that theft to critical cables hampers Eskom and other power utilities ability to provide quality service to the country and cause unnecessary commuters delays and inconvenience; and
(4) also call upon the law abiding citizens to continue and work to assist the law enforcement in apprehending the cable theft crime syndicates to minimise cable theft and vandalising of electricity infrastructure. Motion agreed to in accordance with section 65 of the Constitution.
RIFE SCHOOL VIOLENCE
(Draft Resolution)
Mr M S MOLETSANE: I rise on behalf of the Economic Freedom Fighters to move without notice:
That the Council –
(1) notes with concern the challenge of school safety experienced by schools across all provinces as schools have turned into territories which are prone
to crime and violence. which represents a threat to life and a threat to the successful achievement of educational goals;
(2) also notes that schools are deeply affected by the economic, political and social conditions of our society and are exposed to many undesirable behaviours such as violence, substance abuse and bullying;
(3) acknowledges that schools accommodate many learners, teachers and other support staff and as such are open to every kind of security threat coming from both inside and outside of the school environment, with violent incidents posing a threat to teaching and learning, it is therefore essential that schools become crime free zones.
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(4) further acknowledges that earlier this month in
Nqakathela High School, which is in Ward 13 in
Ndwedwe, a female learner was killed by an
individual, who walked into the school premises and
stabbed her to death;
(5) notes the problem of school security persists
despite the SA Police Services and the Department of
Education having made several initiatives to curb
it;
(6) also notes that a safe and healthy school
environment is critical to education and essential
to the upliftment of our people from the chains of
poverty and enabling a better life; and
(7) acknowledges that in order for learners and teachers
to thrive, the environment needs to be conducive to
effective learning and teaching.
Motion agreed to in accordance with section 65 of the
Constitution.
MPUMALANGA AGRI-HUBS CONSTRUCTION
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(Draft Resolution)
Ms H S BOSHOFF: On behalf of the Democratic Alliance I moved
without notice:
That the Council –
(1) notes with concern that the Provincial Agri-hubs in
Mpumalanga, both Mkhondo and Dr J S Moroka Local
Municipalities still remain but a pipe dream;
(2) also notes that construction of these hubs commenced
9 years ago in 2013;
(3) further notes that once completed, these hubs were
supposed to assist commercial and small scale
farmers to supply fresh produce to the Mpumalanga
International Fresh Produce Market;
(4) notes that according to the Mpumalanga Department of
Agriculture, Rural Development & Land
Administration, these projects would only take 12
months to construct;
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(5) notes that following oversight to these projects, it
has been revealed that they would not be operational
anytime soon which is demoralising to the farmers of
the province;
(6) also notes that the hub in Mkhondo does have an
actual building, with security presiding over an
empty building, but none of the operational
equipment has been installed;
(7) notes that in Dr J S Moroko, the same was found,
however without any security present which increases
the risk of the building being stripped and
vandalised; and
(8) finally notes that with the commitment of the DA, we
will continue to push for answers on these Agri-Hubs
to ensure jobs are created and corruption is halted.
Motion agreed to in accordance with section 65 of the
Constitution.
UNKNOWN GUNMAN KILLING TAXI DRIVERS IN FARADAY, JOHANNESBURG,
18 MAY 2022
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(Draft Resolution)
Ms L C BEBEE: Hon Chairperson, I move without notice:
That the Council –
(1) notes with great shock the killing of four taxi
drivers, and the injuring of three others, after an
unknown gunman randomly opened fire at the taxi rank
in Faraday, Johannesburg, on Wednesday, 18 May 2022;
The CHAIRPERSON OF THE NCOP: Hon Bebee, please retrace your
steps again because you are not audible and please speak
slower and louder into the microphone.
Ms L C BEBEE: Am I not audible? Okay, thank you, hon
Chairperson, am I audible now?
The CHAIRPERSON OF THE NCOP: Yes.
Ms L C BEBEE: ...
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(2) also notes that at this juncture no suspects have
been arrested and the circumstances surrounding the
shooting incident are unknown;
(3) further notes that the drivers that were shot,
belong to the Witwatersrand African Taxi Association
Wata; and
(4) takes this opportunity to convey our heartfelt
condolences and call upon law enforcement agencies
to leave no stone unturned in bringing the
perpetrators to book and for SA National Taxi
Council, Santaco and law-abiding citizens to work
and assist the police in apprehending the criminals.
Motion agreed to in accordance with section 65 of the
Constitution.
CABLE THEFT AND VANDALISM ACROSS SOUTH AFRICAN URBAN AREAS
(Draft Resolution)
Mr A ARNOLDS: Hon Chairperson, I move without notice:
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That the Council –
(1) notes the rapid increase in the criminal act of cable
theft and vandalism across South African urban areas
and the lack of efficient interventions in addressing
this challenge;
(2) also notes that cable theft affects the country’s
transport and communication system, which are crucial
to the economy, whilst also leading to several deaths
due to electric shocks and burns of electrical
engineers repairing substations;
(3) acknowledges that copper cables are mainly stolen from
mines, Transnet, Telkom, Eskom and municipalities,
with the South African Chamber of Commerce and
Industry estimating that such theft costs the economy
between R5 billion and R7 billion every year;
(4) further notes that from a financial perspective, the
stealing of copper cables, overhead lines,
transformers and conductors’ costs Metrorail
approximately R70 million per year, Eskom
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approximately R2 billion per year, leading to lower
productivity and job losses in these industries;
(5) recognises that cable theft is a challenge which is as
a result of the various challenges which we face as a
country, such as high unemployment, poverty,
inequality and land.
(6) Takes this opportunity to call on the Minister of
Police and other Law Enforcement Agencies to act
swiftly against cable theft criminal syndicates as
this looting undermines all efforts of reviving the
economy.
Motion agreed to in accordance with section 65 of the
Constitution.
UNTIMELY PASSING OF FORMER MAYOR OF JOHANNESBURG, COMRADE MPHO
MOERANE.
(Draft Resolution)
Mr M DANGOR: Hon Chairperson, I move without notice:
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That the Council –
(1) notes with great sadness the untimely passing of
former Mayor of Johannesburg, comrade Mpho Moerane,
a week after he was involved in a horrific car
accident, on Wednesday, 18 May 2022;
(2) also notes that comrade Mpho served the people of
Johannesburg as Mayor between 1 October and 22
November 2021;
(3) further notes that comrade Mpho also served as a MMC
for Environment and Infrastructure Services before
he was elected as Mayor;
(4) also notes that at the time of his death comrade
Mpho was the ANC Caucus Leader and Johannesburg ANC
Regional Treasurer; and
(5) conveys our heartfelt condolences to his family,
friends, comrades in the ANC and the people of South
Africa.
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Motion agreed to in accordance with section 65 of the
Constitution.
VICIOUS ABUSE AND BRUTAL MURDER OF SINGWA NAMHLA MTWA IN
MTHATHA, EASTERN CAPE.
(Draft Resolution)
Ms N NDONGENI: Hon Chairperson, I move without notice:
That the Council –
(1) notes with utmost rage reports of the brutal murder
and vicious abuse of Singwa Namhla Mtwa who was
viciously shot nine times on 21 April while she was
in her car, after arriving at her Sidwadwa home in
Mthatha in the Eastern Cape;
(2) also notes with utmost anger that ruthless images
and videos of her abuse at the hands of the
controversial Eastern Cape businessman and Major
Mfesane Bhekizulu who works for the SA Police
Service; SAPS and
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(3) takes this opportunity to join the countless South
Africans to call on the Minister of Police to take
swift action to ensure that the brutal and cold-
hearted murder and abuse of Singwa Namhla Mtwa
receives the highest priority and that Major Mfesane
Bhekizulu is placed on immediate suspension if not
arrested for what is a blatant case of intolerable
vicious abuse of Singwa Namhla Mtwa.
Motion agreed to in accordance with section 65 of the
Constitution.
DEATH OF MS HOMBISA “NANA” MAFUDUKA FROM LUSIKISIKI, EASTERN
CAPE IN THE MSC ORCHESTRA CRUISE SHIP
Ms M BARTLETT: I move without notice:
That the Council –
(1) notes with utmost concern and apprehension reports
of the awful death of Ms Hombisa “Nana” Mafuduka
from Lusikisiki in the Eastern Cape, who died in
what her family has described as a vicious death
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while on board the MSC Orchestra cruise ship on the
voyage to Durban from Mozambique on 27 May 2022;
(2) further notes with great uneasiness that the
investigation of the murder of Ms Mafuduka has
stalled with no updates of the cause of her brutal
death and that the MSC Orchestra cruise ship has
returned to Europe last Monday amidst reports that
the staff members who were on duty the night Ms
Mafuduka died were dismissed;
(3) takes this opportunity to call on the Minister of
Police to ensure that the investigation into the
death of Ms Mafuduka receives high priority; and
(4) further calls on the Minister of Labour and Minister
of Tourism to investigate the conditions of the
dismissal of the crew of the MSC Orchestra cruise
ship and its departure from South Africa amidst an
investigation on the death of Ms Mafuduka.
Motion agreed to in accordance with section 65 of the
Constitution.
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Mr K MOTSAMAI: Thank you Chairperson
Sesotho:
Ke na le bothata ba marangrang a kgokahanyo, motlakase ke
bothata ka kwano. Ebe o ya nkutlwa Modulasetulo?
The CHAIRPERSON OF THE NCOP: Please proceed, please proceed.
Mr K MOTSAMAI: I move without notice:
That the Council –
(1) debates at its next sitting the long standing
problem of broken police vehicle in Gauteng which
has ... [Inaudible.]
The CHAIRPERSON OF THE NCOP: Please proceed Motsamai. Speak to
the gadget, be a bit slower and louder. So, Motsamai is no
longer on the platform, we’ll come back to him and give him an
opportunity.
RACIST ACTS CONDEMNED AT UNVERSITY OF STELLENBOSCH
(Draft Resolution)
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Ms A D MALEKA: I move without notice:
That the Council –
(1) commends the University of Stellenbosch for the
suspension of a student who was filmed urinating on
the belongings of a fellow student;
(2) notes that the barbaric incident took place at the
Huis Marais Residence on the university campus in
the early hours of Sunday morning,15 May 2022;
(3) acknowledges that the dehumanising racist act is not
acceptable, and no student has the right to diminish
another student's human dignity; and
(4) takes tis opportunity to call on the university to
speedily conclude its investigation of the incident,
and make its findings public to reassure the country
that it strives for an inclusive student community.
Motion agreed to in accordance with section 65 of the
Constitution.
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THE BODY OF A SIX-YEAR OLD BONTLE MASHIYANE FOUND MUTILATED IN
BUSHES.
(Draft Resolution)
Ms N E NKOSI: I move without notice:
That the Council –
(1) notes with utmost concern the brutal senseless and
heartless murder of six- year old Bontle Mashiyane
whose tiny body was found mutilated in the bush
about 2km away from her home in Mganduzeni, near
White River in Mpumalanga;
(2) applauds the speedy arrest of three suspects who
appeared in Kobokweni Magistrates Court Mpumalanga
yesterday before the matter was postponed to 2 June;
and
(3) takes this opportunity to condemn in the strongest
possible term the purely evil inhumane and cold
hearted mutilation of such a young child by people
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who took part in searching for her when she was
reported missing.
Motion agreed to in accordance with section 65 of the
Constitution.
TENSIONS RISE ON RE-APPOINT THANDEKILE MNYIMBA
(Draft Resolution)
Mr M NHANHA: I move without notice:
That the Council –
(1) notes with disgust the reports that a resolution by
Amathole District (ADM) Municipality in the Eastern
Cape to re-appoint Thandekile Mnyimba as a municipal
manager for another 5 years;
(2) also notes opposition parties in ADM opposed his
appointment but the ANC- faction aligned to the
regional executive committee used its majority to
bulldoze the item;
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(3) further notes that it is under Mr. Mnyimba’s tenure
as municipal manager that ADM has gone basically
bankrupt and failed to provide basic services such
as water to the majority of villages in their
jurisdiction;
(4) notes that it is under Mr. Mnyimba’s tenure as the
MM that labour relations are at its lowest in ADM,
staff live in constant fear of their lives;
(5) further notes that it is Mr. Mnyimba who despite the
precarious financial situation of ADM gave himself a
salary raise from R1.6 million to a cushy
R2.4 million, a salary that dwarfs those of City
Managers in metros and deputy ministers;
(6) further notes that it is alleged that the security
guards neNkabi that humiliated Councillor Nanziwe
Rulashe acted on Mr. Mnyimba’s instructions;
(7) urges the Council to condemn his appoint with the
contempt it deserves and calls on the MEC for COGTA
in the EC Mr. Xolile Nqatha not to give concurrence
to Mr. Mnyimba’s disgraceful appointment.
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Motion agreed to in accordance with section 65 of the
Constitution.
THE SIU APPLAUDED FOR EXPOSING TENDER IRREHULARITIES AT THE OR
TAMBO DISTRIC MUNICIPALITY
(Draft Resolution)
Mr M I RAYI: I move without notice:
That the Council –
(1) welcomes the Special Tribunal’s setting aside of a
Covid-19 door-to door tender awarded by the OR Tambo
District Municipality to Phathilizwi Training
Institute in February 2020;
(2) notes that the Special Investigating Unit brought the
application seeking to declare the extension unlawful
and void;
(3) recalls that in January 2019, the municipality
awarded a tender to Phathilizwi to conduct community
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education workshops within the municipality for 12
months which was further extended for six months;
(4) further recalls that the Special Tribunal on
Wednesday, 18 May 2022 declared unlawful and set
aside the 2020 extension of a tender awarded to a
company to conduct a Covid-19 campaign for the OR
Tambo Municipality in the Eastern Cape; and
(5) takes this opportunity to commend the SIU for a job
well done in exposing irregularities in the extension
of a Covid-19 door-to door tender contract for six
months.
Motion agreed to in accordance with section 65 of the
Constitution.
Sesotho:
Mong K MOTSAMAI: Ke a leboha Modulasetulo, ken a le bothata ba
motlakase ka kwano.
SAPS IN GAUTENG UNABLE TO POLICE DUE TO VEHICLE SHORTAGES
(Draft Resolution)
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English:
I move without notice:
That the Council –
(1) debates at its next sitting the long standing
problem of broken police vehicle in Gauteng which
has led to the vehicle shortage in many police
stations across the provinces rendering SAPS unable
to police certain areas.
Motion agreed to in accordance with section 65 of the
Constitution.
The CHAIPERSON OF THE NCOP: Thank you very much hon members.
That takes us to the First Order of the day. Hon delegates
before we proceed to the First Order I would like to take the
opportunity to welcome the Minister and Deputy Minister of
Mineral Resources and Energy, the Minister and Deputy Minister
of Small Business Development, MECs, Salga representatives and
all special delegates to the House. Hon delegates, we now
proceed to the First Order.
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APPROPRIATION BILL
(Policy debate)
Vote No 34 — Mineral Resources and Energy:
The MINISTER OF MINERAL RESOURCES AND ENERGY: Hon Chairperson
Masondo, hon Deputy Minister of Mineral Resources and Energy
Dr Nobuhle Nkabane, hon members of the National Council of
Provinces, acting Director-General, DG, of the department
Patricia Gamede and team Department of Mineral Resources and
Energy, DMRE, chairpersons and chief executive officers, CEOs,
of our state-owned entities, captains of industry, ladies and
gentlemen, we are here to table Budget Vote No 34.
We deliver this budget as allocated to the Department of
Mineral Resources and Energy under difficult domestic and
global economic conditions. Load shedding continues to ...
[Inaudible.] ... on livelihoods, mining production and the
economy at large. It is also expected that oil prices will
continue to increase and that impacts negatively on local
consumers and transport users. It is mainly due to global
events pushing the price above $100 per barrel and the high
USA interest rates. Government remains committed to cushioning
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the people of South Africa from the adverse impacts of these
domestic and global economic realities. Hence, the department
continues to implement various interventions and measures to
ensure security of energy supply to society and to ensure that
mining continues to contribute positively to the economy. This
was evidenced with the 11,8% of mining registered growth in
2021. We also saw mining production recovering to almost pre-
COVID-19 levels in 2021. Therefore, that contribution has been
acknowledged over and over. We must continue working together
to ensure that it is sustainable.
Let me hasten to talk about the business of the day, the
budget allocation to the Department of Mineral Resources and
Energy. The main appropriation for the Department of Mineral
Resources and Energy in the 2022-23 financial year is a total
of R10,4 billion. Earmarked transfer payments to public
entities, municipalities and other implementing institutions
account for R8,3 billion or 79,9% of the total budget. The
allocation to operational activities, inclusive of the
procurement of capital assets, accounts for R2,1 billion or
21% of the budget.
A substantial portion of the transfer payments budget is
distributed to implementing agencies as follows: A total of
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R5,7 billion goes to Eskom and municipalities for the
implementation of the Integrated National Electrification
Programme, R233,5 million goes to various service providers
for the implementation of the nongrid electrification
programme and R223,2 million goes to municipalities for the
Energy Efficiency Demand Side Management programme. Our public
entities are budgeted to receive a combined allocation of
R2 billion mainly for operational activities.
The increase of 1,4% to the main appropriation, as compared to
the previous financial year, is due to the increased
allocation towards information and communications technology,
ICT, costs. This is inclusive of the costs for the new
enterprise system to address backlogs in processing mining
licence applications, office accommodation costs, preparatory
work for the new multipurpose reactor project under the
Nuclear Energy Corporation of SA, Necsa, and the operational
funding to the Independent Power Producers, IPPs, office for
review of the procurement programme of IPPs, and the
development of the electrification master plan for
finalisation in the 2022-23 financial year with an earmarked
allocation of R50 million.
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With regard to minerals, in fulfilling our commitment in the
Economic Reconstruction and Recovery Plan, government approved
and published the mining exploration strategy and
implementation plan. With the strategy we intend to attract at
least 5% of global spend ... [Inaudible.] ... in the next
three to five years. We invite all South Africans and the
investment community to support the strategy for the country
to continue discovering minerals underneath our soil for the
benefit of all South Africans. I am certain that with the
support of the provinces, we will be able to explore every
square kilometre of the country, unlock this country’s mining
potential and develop our economy.
The Council for Geoscience, CGS, will provide details of the
de-risking of our mineral anchorage to attract more
exploration budget to our shores. Exploration is quite
important for the fact that if you don’t do exploration you
are not going to grow mining. You discover, then you mine and
then you process.
With regard to the mining and petroleum regulations, the
department remains committed to resolving challenges
experienced in licence applications and processing. However, I
am pleased to report that the department has done well in the
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petroleum ... We have dealt with the backlog and are within
the legislated times for all applications, for which the
information has been submitted. During the previous financial
year, the department finalised over 1 000 mineral prospecting
rights applications and adjudicated about 300 mining rights
applications. However, not all of these rights translate into
operations due to a number of appeals lodged. In essence, I
can report that the department is attending to the backlogs in
mining licence applications and processing it, and the urgency
of getting a working cadastral system cannot be emphasised
more.
Beneficiation is an important avenue through which we can
derive value in the vast mineral resources that our country is
endowed with. The department is engaged in consultations with
our social partners to finalise the mineral beneficiation
master plan which seeks to address the constraints to mineral
beneficiation in the country to ensure an orderly development
... [Inaudible.] ... mineral value chain. In other words, we
want to minimise the issue of the export of raw commodities
without processing them.
In the previous financial year, we developed a strategy to
revitalise ... [Inaudible.] ... sector. We will convene social
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partners to agree on a social compact as part of reviving
South Africa’s smelting capacity. Of course, smelting capacity
is heavily dependent on the price of electricity.
In the previous financial year, the department hosted mining
investment conferences in Limpopo, North West and the Northern
Cape to highlight the potential of these provinces in the
future of mining. We firmly believe that these provinces can
be developed into a massive mining corridor in our country.
This takes nothing away from the significant role that can be
played in both mining and energy in South Africa by other
provinces such as Mpumalanga, Gauteng and the Free State.
In mine health and safety, the department continues to partner
with social partners to achieve the goal of zero harm in
mining. Through collaboration in the implementation of COVID-
19 pandemic interventions, the mining sector has to date
vaccinated more than 75% of mine workers, with a recovery rate
at 98,5% of those who fall sick. This year, we will convene
the Mine Health and Safety Tripartite Summit to consider
interventions that can prevent injuries and fatalities in the
workplace. We are concerned about the 74 fatalities reported
in 2021. You must remember that in 2019 we set a record of
51 fatalities. We always strive to improve on that record, so
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74 is a setback. Though mining is considered a dirty,
dangerous, difficult and disease ... sector, we must strive to
ensure that we mine safely, and prevent injuries and loss of
life. To us, a loss of one life is one life too many.
Despite challenges, the department has made good progress in
increasing energy generation capacity to address the energy
shortfall, as highlighted in the Integrated Resource Plan
2019.
To this end, the department has ensured the connection grid of
1 850 megawatts from the projects signed under Bid Window 4 on
the Renewable Energy Independent Power Producer Procurement
Programme. We have procured ... [Inaudible] ... 600 megawatts
of renewable energy through Bid Window 5, with the signing of
a project agreement planned for the end of July and the end of
September. These projects are expected to deliver power into
the grid within 24 months from the date the project is signed.
We have issued requests for proposals for the procurement of
2 600 megawatts of renewables under Bid Window 6 and we are
also finalising with Eskom — the buyer — the agreements with
preferred projects procured as part of the 2 000 megawatts
under the Risk Mitigation Independent Power Producer
Procurement Programme. In other words, we agreed that we
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should not wait for the settlements of all the disputes with
regard to all these projects. Those that are ready should be
allowed to continue.
In addition, the department is finalising requests for
proposals to be issued in the current financial year, for the
procurement of 513 megawatts of storage, 3 000 megawatts of
gas, 2 600 megawatts of renewable energy under Bid Window 7
and 1 500 megawatts of coal.
These initiatives will bring online over 13 000 megawatts. It
is important to add that many of these projects get taken to
court by a number of nongovernmental organisations, NGOs, that
actually oppose anything except renewables. We have a duty to
do development in the country and not to succumb to the
pressure of antidevelopment ... [Inaudible.]
To meet the commitment for universal access to electricity,
166 000 households were electrified in the last year.
Furthermore, we intend to connect an additional 640 000
households to the grid and a further 45 000 households with
nongrid technology. We should remember that, as we deal with
clean technology, we equally have a challenge of energy
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poverty. So, we must confront both of them and not only focus
on one because there is no process where we walk on one leg.
Integral to reforms, we have amended the Electricity
Regulation Act to create a transmission entity to
competitively act as wheeler and dealer of electricity. The
Bill, tabled in Cabinet in January 2022 and published for
comments, is being finalised. It will be presented to Cabinet
for approval, with the intention of tabling it in Parliament
by the end of July 2022. Alongside these are amendments to the
Electricity Pricing Policy, which will also be tabled for
final approval by Cabinet by the end of July 2022.
In October 2021, we amended the Electricity Regulation Act on
new generation capacity to enable municipalities in good
financial standing to develop their own power generation
projects. So, the department has put in place an internal
standing operation procedure to ensure that the requests for
section 34 determinations are attended to in the shortest
possible period. In other words, yes, we have amended the
rules but we are not receiving enough applications from
municipalities. We are hoping that municipalities will be able
to generate their electricity.
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Energy efficiency is important, with more than
200 municipalities participating in the Energy Efficiency and
Demand Side Management Grant programme. Forty-five of those
are funded through the fiscus and complemented by donor
funding. During the 2022-23 financial year, we will accelerate
the energy efficiency campaign.
With regard to generation for own use, since the gazetting of
the 100 megawatts embedded generation, the National Energy
Regulator of SA, Nersa, has registered six generation
facilities with a capacity ranging between 1 megawatt and
10 megawatts. The total capacity to be generated from the six
generation facilities is 24 megawatts. Nersa further
registered 553 projects that are under 1 megawatt, totalling
268 megawatts.
The department continues to work with other government
departments, under Operation Vulindlela, to streamline the
approval processes for generation for own use. The
registration of two projects of 100 megawatts by Nersa in the
North West is instilling confidence in the future.
In terms of oil and gas, the Upstream Petroleum Resources
Development Bill is before Parliament for consideration. We
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look forward to the finalisation of this process as it will
unlock the potential of investment into our petroleum
resources. We must make the point that oil and gas are
catalysts for development. We must invest time and energy in
them so that we can accelerate growth. We cannot be happy
being about 1% of the growth trajectory of the economy.
It gives me pleasure to report to hon members of this august
House that iGas, a subsidiary of the Central Energy Fund, CEF,
has acquired an additional 40% ownership of the Republic of
Mozambique Pipeline Company, Rompco. This means that South
Africa and Mozambique jointly own 80% of the pipeline, with
Sasol owning the remaining 20%.
The CGS has confirmed the verification of the shale gas
samples that were tested internationally. We are now awaiting
environmental assessment approval by mid-June 2022. A Gas
Master Plan, yet to be presented to Cabinet, is at an advanced
stage of development following the publication of the Base
Case report last year. The plan will consolidate in this ...
[Inaudible.]
Notably, oil and gas projects continue to be under threat from
well-funded lobby groups, which also misinform unsuspecting
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communities. Since February, we have consulted six traditional
councils in the Eastern Cape to help them understand the
possible benefits of the upstream petroleum industry on their
communities and our economy in general. We intend to engage
some additional traditional leaders in other provinces. Let me
explain that. These projects are quite important to us because
the riot in July last year indicated to us that more needed to
be done, when we discovered that 50% of the gross domestic
product, GDP, is in two provinces. It means that we must work
with speed to intervene and change the economic architecture
of the economy. That apartheid architecture focused ... only
three legs. Other provinces were not taken into account. We
have a duty to bring those provinces in line.
South Africa remains committed to ... [Inaudible.] ...
development ... [Inaudible.] ... economy. Our country
possesses the world’s largest grade of platinum group metals
that are integrated to the hydrogen economy. We must therefore
explore prospects and mine these minerals as we transition
from high-carbon emissions to low-carbon emissions. The launch
of the world’s largest hydrogen power truck by Anglo American
and Mogalakwena gives the necessary boost to the hydrogen
economy.
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Allow me to conclude by thanking the Deputy Minister, Dr
Nobuhle Nkabane for her support since assuming her position in
2021. Let me also extend my gratitude to the ... [Inaudible.]
... from the DG Thabo Mokoena, the current acting DG Ms
Patricia Gamede, the select committee, team DMRE, boards and
CEOs of entities reporting to the DMRE. Lastly, let me thank
my wife Nolwandle Mantashe, my family and my private-office
staff for ... [Inaudible.] ... support. I present Budget Vote
No 34 to the NCOP for your deliberations. Thank you very much.
Ms T C MODISE: Hon Chairperson, hon Minister, Deputy Minister
and my colleagues, it is important to note that this policy
vote is reflected on at the time when the state-owned
enterprises, as agents that the state attempts to use in order
to intervene in the market for the purposes of promoting
economic development to benefit all of society particularly
the poor, as well as of meeting its obligations are
experiencing institutional impasse. The form that this
institutional impasse takes its extent and its negative impact
vary enormously, however, across different state-owned
enterprises, SOEs. Various combinations of different policy
interventions have been put in place to buttress the SOEs as
agents through which develop mentalism and structural
transformation can emerge and be achieved.
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First of all, the Economic Reconstruction and Recovery Plan
postulates that the identification of new strategic minerals
to improve the performance of the state insofar as lifting the
country’s growth and development trajectory to a higher level
is concerned will be prioritised. The identification of new
strategic minerals will be prioritised in three complementary
phases. First, as it is widely touted, support for the local
beneficiation of minerals, the building of minerals value
chains and strengthening broad-based industrialisation will be
prioritised. Second, the state will improve its capacity and
subsequently direct investment races towards the direction of
the exploration, as well as the exploitation of new strategic
minerals. Third, the exploration and exploitation of new
strategic minerals will be highly supervised by the state to
ensure that they improve the performance of the state in terms
of mineral beneficiation policy.
The rationalisation of the Council for Geosciences to meet the
objective of the economic reconstruction and recovery plan,
ERRP, concerning the identification of new strategic minerals
is already underway. His Excellency President Ramaphosa and
Minister Mantashe announced at the Mining Indaba 2022 that
tangible evidence indicates that South Africa has abundance of
untapped resources such as cobalt, copper, lithium, nickel,
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and zinc which are becoming increasingly important in the face
of transitioning to a green economy. Through the exploration
strategy which was approved by the Cabinet for public
consultation to address comprehensive challenges of
sustainable development, the Council for GeoSciences, CGS, has
intensified the identification and drilling of selected
mineral target areas for quantification of priority minerals
deemed critical for sustainable development. Just to
illustrate, the reconnaissance assessment of the Molteno-Indwe
coalfields in the Eastern Cape shows an estimated economically
exploitable coal tonnage of 320 million tonnes, with a value
beneath the ground of R122 billion, using a conservative
estimate of R350 per ton. Moreover, the reconnaissance
assessment of the Ga-Ramokoka Carbonatite Complex in the North
West Province indicates a host of numerous minerals including
an estimated tonnage of rare earth elements at 470 000 tonnes,
phosphates at 300 000 tonnes, and copper at 30 000 tonnes at
the estimated value of R1,4 billion.
There is every reason to believe that the Department of
Mineral Resources and Energy’s modest performance in the
processing of mining and prospecting rights as well as mineral
transfer applications have the potential to affect key
infrastructure investment and negatively impact on the
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exploitation of new strategic minerals. Last, and by no means
least, there appears to be lack of institutional capacity to
jumpstart the rolling out of mineral beneficiation as well as
much broader swathes of radical economic transformation in the
mining industry. Therefore, it is not guaranteed that the
exploitation of new strategic minerals will primarily benefit
communities and subsequently reverse the triple challenges of
poverty, inequality, and unemployment. These are all relevant
considerations. However, specific examples of the Department
of Mineral Resources and Energy’s performance targeted plans
during the current financial year render these considerations
ineffective.
To begin with, investment in technological upgrading, which is
especially important for avoiding a middle-income technology
trap and lack of structural transformation broadly is
earmarked already. In particular, the Department of Mineral
Resources and Energy intends on investing in the new
information and communications technology, ICT, infrastructure
as the department recognises the fact that there are some
important functions and activities, particularly the
processing of mining rights and minerals transfer applications
which require advanced technological capabilities to address
them. This implies that the new ICT infrastructure will
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process mining rights and minerals transfer applications
within a short space thereby increasing the role of the
historically disadvantaged south africans in the mining
industry as the sector with the scope for higher cumulative
productivity.
Furthermore, the ANC-led government through the Department of
Mineral Resources and Energy has successfully come to terms
with the challenges regarding the slow pace of the spill-over
effects of the mineral beneficiation policy. Hence the
Department of Mineral Resources and Energy will finalise the
drafting of the mineral beneficiation master plan whose
intended goals include, but not limited to, enhancing linkages
between the mining sector and the broader economy. More
importantly, there is progress in this regard as the National
Energy Regulator of South Africa has approved a negotiated
pricing agreement between Eskom and Hillside Aluminium Smelter
in Richards Bay, KwaZulu Natal province to enable the smelter
to have competitively priced electricity to drive mineral
beneficiation.
Adding to the identification of new strategic minerals and
accelerating the mineral beneficiation policy is the developed
innovative technologies of Mintek. To be sure, Mintek’s
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innovative technologies contribute towards the realisation of
industrialisation through localisation as outlined in the
economic reconstruction and recovery plan, ERRP. To be more
specific, Mintek is working with industry and international
researchers to source R2,9 billion required to build the
smelter that will enable the country to exploit The Bushveld
Complex which constitutes the world’s largest unexploited
repository of platinum group elements such as chromium and
vanadium. Furthermore, Mintek is working jointly with Siyanda
Chrome Smelting Company to broaden the energy mix to include
about 30% of the electricity required for ferroalloys smelting
with renewable energy at Siyanda Bakgatla Platinum Mine in
Swartklip, Limpopo province. This ferrochrome smelter project
is investment ready and it is estimated to produce
approximately 380 000 tonne per annum of ferrochrome at a cost
that will place the smelter in the lowest cost quartile of the
global production cost curve.
The interpretation of the economic reconstruction and recovery
plan’s industrialisation through localisation priority applies
clearly to the partnership between Pelchem and Mintek to
revitalise the state-owned pharmaceutical company, named
Ketlaphela. The partnership transactions were approved by the
Minister of Mineral Resources and Energy in April 2020.
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The Ketlaphela project is going to facilitate 700 jobs which
will help people living with HIV and Aids and contributes to
the security of supply and availability of burden of diseases
leading to improved and healthy society in tandem with
National Health Insurance. [Time expired.] The ANC supports
the vote.
They followed the ANC-led Government’s resolution on the
establishment of a State-Owned Pharmaceutical Company. The
social, political, and economic purposes of Ketlaphela are
very important especially in light of the fact that the
pharmaceutical industry in South Africa has oligopolistic
tendencies and that it has kept medical products at a mark-up
pricing that excludes the majority of the disenfranchised
South African citizens. In short, Ketlaphela will implement
state objective of achieving 90-10 target for
HIV/AIDs and contributes to security of supply and
availability of burden of diseases leading to improved and
healthy society in tandem with National Health Insurance.
[Time expired.]
Mr C F B SMIT: Hon Chairperson, hon Minister, hon members and
fellow South Africans. I am actually surprised to see the
Minister in the House today, as neither he nor the deputy
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found it necessary to attend any of the two scheduled select
committee meetings to discuss his department’s budget and
annual performance plan, APP. It seems he left his logic at
Luthuli House and grabbed his arrogance instead when he left
in a rush to attend to all the tender and share opportunities
in mining and energy [Interjection.]
An HON MEMBER: Can you focus on a debate rather that site
issues, focus on the debate.
Mr C F B SMIT: Hon Chairperson, I want to remind both Minister
Mantashe and his fellow ANC members in this House that he and
his department is accountable to us as Parliament and not the
other way around, as he seems to believe. His absolute
disregard for this Parliament and its committees should be
noted and he should be reprimanded for it by this House.
Instead I am foreseeing that the ANC members who will follow
me in this debate will instead tow the Luthuli House line,
disregard their oath to the people of this country and lick
the Minister just where he wants. But should we even be
surprised by the fact that the executive has this disregard
for Parliament, when there is an inept Leader of Government
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Business, our Deputy President, the hon David Mabuza. I cannot
think of a more apt analogy than the blind leading the blind.
Where is the logic Minister in standing on a public platform
and saying that Electricity Commission, Eskom, has lots of
energy available that it does not use and should find ways to
use it? Really Minister, you are very much aware of the
disaster at Eskom and the state of our power stations to make
such a populist and irresponsible statement. Instead, you
should have asked the ANC’s investment arm Chancellor House to
repay all the money it benefitted from the Hitachi deal to
build Medupi and Kusile power disasters and as the ANC claimed
the responsibility for the mess at Eskom.
Minister it is you who stands between South Africa and
economic growth, as you are the one who throttles our economy
by desperately trying to hold on to an outdated coal power
monopoly of the State. When the DA led coalition takes over in
2024 we will expose exactly that by showing you how we unleash
the economic opportunities by moving away from your dinosaur
model to an innovative green, sustainable and cheaper
competitive private sector lead power generation model. You
have the keys to the gates of economic prosperity Minister,
use it because your time is running out! Tic Toc, Tic Toc.
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Another show of arrogance and disregard for the separation of
powers, by threatening direct interference in the
administration is your threat to anyone who opposes your
aspirations for nuclear energy. As you said it Minister, and I
quote; “I will fire you if you don’t support nuclear”. Well
Minister here I am, please fire me because I am against
nuclear! What don’t you understand about the fact that this
country cannot afford nuclear? Yes, it might seem cheaper to
operate when assembled after the massive cost to do exactly
that, but what is not spoken of is the dangers if something
goes wrong.
Have we not learned lessons from Japan with the Fukushima
nuclear disaster in 2011 or the nail-biting standoff at the
Zaporizhzhia nuclear plant in Ukraine just recently? Minister
we are all aware of climate change and the threats it presents
with unprecedented natural disasters as we just saw in
KwaZulu-Natal, KZN. Stop this foolishness and stop trying to
justify it by referring to your energy mix plan. South
Africans will oppose it with all their might believe you me!
Let’s talk a bit about hand to mouth issues, this is a matter
that affects every single person in this country. That is the
cost of living. We all just got the shocker that fuel is
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expected to rise by around R3,77 per litre for 95 octane
petrol which will bring the price to R25 a litre of fuel.
That will drastically affect the price of every single thing
in this country; food prices will skyrocket, your taxi ride
will become much more expensive, electricity will become more
expensive because we are using millions of litres of diesel to
keep the lights on and so we can go on and on. But this is not
a concern of the executive, as you all live in a fantasy land
while South Africans suffer.
Minister this is because of the war in Ukraine which the ANC
Administration showed their jellyfish spine and silent support
for Russia who is directly responsible for the war.
The other factor is the fact that you as Minister is failing
South Africans in their deepest time of need by adding back
the two months only R1,50 levy relieve. This poverty Cabinet
of which you are not only part of but one of the main the
players responsible is taking at least 30% of the price of
fuel in the form of government levies. You have the ability to
make life bearable for South Africans during this trying times
Minister, but I doubt you will give up all the other luxuries
to sponsor the ordinary South African.
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The DA will soon present its plan to make life more affordable
for South Africans. And there’s already a petition out,
/fuelprices.co.za, that everybody can go and sign. As we as
the DA and more specifically the poorest who needs it the
most.
You see Minister, we as the DA do not report to Luthuli House
and the aspirations of state capturers, we as the DA report to
South Africans, the people who elected all of us as Members of
Parliament. We as the DA will act in the best interest of
ordinary law abiding citizens who just want to make a decent
living.
The DA doesn’t only talk; the DA gets things done. The DA is
also not waiting for 2024 to act, we are already gearing up
for the great take over in 2024. When every South African will
have hope of a better future again. When every South African
will feel that they are taken seriously again. When every
South African will feel safe and at home in this country
again. Where every South African can feel proud to be a South
African again.
I will keep my oath to the people of South Africa Minister,
and keep you and your department accountable until then, let’s
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see if you can take it on the nose Minister, I am waiting for
your response. I thank you.
Mr M MVOKO (Eastern Cape): Thank you very much. Greetings to
you, Chairperson, greetings to the Deputy Chairperson, the
Minister of Mineral Resources and Energy, hon Mantashe, the
Deputy Minister, hon members of this august House, ladies and
gentlemen; good afternoon, I first wish to welcome and
indicate our support to the Budget Vote as was delivered by
Minister Mantashe.
The ongoing inept supply of electricity in the country remains
a serious concern, and is adversely impacting economic growth
and job creation in South Africa and indeed in the Eastern Cape
province. We join and support the efforts to accelerate all
forms of new electricity generation.
In the current efforts, the Eastern Cape stands ready to play a
role.
The hon Minister has noted that one thousand eight hundred and
fifty megawatts, from projects signed under bid window 4 of the
Renewable Energy Independent Power Producer Procurement
Programme, have been connected to the grid.
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Four of these wind farms are in the Eastern Cape province. They
have added 433 megawatts of capacity to the National Grid. These
four wind farms have made commitments to spend R3,24 billion on
socioeconomic development initiatives and R1,17 billion on
enterprise development over the next 20 years. Since starting
operations, they have already spent R5,97 million on these
commitments in their local communities.
We are also mindful that these projects have been awarded in the
Eastern Cape province under the Risk Mitigation Procurement
Programme, with a combined capacity of 723 megawatts. We look
forward to the finalisation of these three projects.
Furthermore, we look forward to the signing of project
agreements under Bid Window 5 of the Renewable Energy
Independent Power Producer Programme. Two wind farms were
awarded in the Eastern Cape province as preferred bidders. These
wind farms will add an extra 224 megawatts to the National Grid,
have an estimated investment of R4,6 billion, and are likely to
create up to 1 300 job opportunities at construction and
operations.
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In the Eastern Cape province, we are also tracking many thousands
of megawatts of additional renewable energy under preparation
for bid windows 6 and beyond.
In respect to electricity generation from Liquefied Natural Gas,
we continue to work with the Department of Mineral Resources and
Energy, the Central Energy Fund and Transnet, to advance
Liquefied Natural Gas Infrastructure in support of a Gas Hub at
Coega. The Coega Special Economic Zone, Coega SEZ, is working
to support up to 3 000 megawatts of new gas to power generation.
Hon members, we note that the Department of Mineral Resources
and Energy is working on the framework for the new nuclear
procurement programme and will engage on the new developments
accordingly.
We have demonstrated as the Eastern Cape that we can contribute
significantly to the urgent need for new electricity generation
on the National Grid. However, as much as there are new
generation projects under development, these projects are
heavily limited by the capacity of the Eskom transmission grid
in our province. The constraints of the transmission grid
represent a definite limit to the new energy. We will work
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closely with Eskom to support new grid development in the
province.
The hon Minister of the Department of Mineral Resources and
Energy, has recently celebrated the launch of the world’s first
Hydrogen-Fuel Cell truck as part of continuing work on the South
African Hydrogen Economy. He has noted that the potential for
hydrogen economy in South Africa is massive due to our enormous
endowment with the Platinum Group Metals as well as renewable
energy resources.
To this point, the Eastern Cape province is well placed to play
a strong role in the Hydrogen Economy. We have excellent wind
and solar resources, two Special Economic Zones and the
necessary supporting infrastructure. All the critical enablers
for the commercial viability of projects are in place. The Coega
SEZ will host Hive Hydrogen SA, which entails the construction
of a R69,6 billion green ammonia plant with its own dedicated
green power supply.
The Eastern Cape province is ready to contribute towards our
national energy needs, in so doing deepening and transforming
value chains, growing our economy and creating much needed jobs.
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I wish to reiterate that the province is in support of all
efforts, and is willing to work with the department in all
efforts that are aimed at bringing about development to the
province of the Eastern Cape. The recent economic shocks that
have taken place between Gauteng and Kwazulu-Natal have reminded
us that we have not adequately and aggressively dealt with the
spatial design of the structure of the economy of the past. This
is why when massive economic disruptions that take place in
Gauteng and Kwazulu-Natal, the entire nation catches the smoke.
The Eastern Cape is endowed with a number of resources that give
it a competitive advantage. These include water, biodiversity
and an extensive coastline of over 800 kilometres along the
Indian Ocean, with enormous potential for an ocean economy, as
well as mineral and energy resources.
We should utilise these resource endowments to unlock economic
growth opportunities and create much need employment
opportunities for the people of the Eastern Cape, the Home of
Legends. I thank you, hon Chairperson.
Mr A ARNOLDS: Thank you, House Chairperson. The EFF rejects
Budget Vote No 34 on Mineral Resources and Energy.
Chairperson, we reject this budget, as the Department of
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Mineral Resources and Energy has dismally failed on its core
mandates and responsibilities, insofar as mineral resources
and energy in this country is concerned. Energy remains
central to the development and growth of a country.
For without energy, an economy cannot create goods, services
and people cannot move, meaning that, a stable supply of
electricity is needed, for industrialisation cannot be
guaranteed. Yet, we find ourselves in a situation where as a
country, we are ranked as the 10th worst mining destination in
the world, according to the Fraser Institute’s annual survey,
and if one were to look at our ratings over the past years,
one would notice that we have been dropping drastically.
We also face a huge energy crisis, where every other day we
are disturbed and defocused by load shedding schedule
announcements, as opposed to announcements that we are a step
closer to stable electricity provision. Minister, the vision
of your department is to create an enabling environment, in
which state-owned companies add real economic value by
focussing on operational excellence, commercial viability and
fiscal prudence.
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The reality, Chairperson, which we all know, but do not want
to admit, is that the department has over time demonstrated
its incapacity to carry out its primary functions, meet
targets, and get the basics right over service delivery and
the ability to bring stability in both the mining industry and
the energy sector. The Department of Mineral Resources and
Energy has shown no initiative in ensuring mining companies
adhere to environmental laws.
Instead, they have taken it upon themselves, to spend billions
of taxpayers’ money on rehabilitation initiatives, a cost that
should be directly incurred by these companies. Mining
companies such as Sibanye Stillwater, continue to exploit our
people fuelled by the knowledge that they are untouchable and
that the Department of Mineral Resources and Energy is not
only toothless, but also slow in responding to worker’s
complaints.
Today, we are requested to approve a budget, which at face
value, is about giving the country false hope and encouraging
for more tax-payer’s money to be pumped where there is little
accountability and repercussions. Minister, the approach of
this government to energy, is failing the people of South
Africa, and the economy of this country is suffering because
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of it. This department set a number of targets when canvassing
for previous budgets that have not been met, and instead of
demonstrating measures put in place to meet such targets, new
targets are made.
Now, as we debate this fully in this House today, there is no
clear report in relation to where we are with the Risk
Mitigation Independent Power Producer Procurement Programme,
RIMPPP, and there is no will to table and review the
Integrated Resource Plan for energy, which should be table at
least every two years. We are also facing yet another wave of
fuel increase, and there is no decisive plan and no plan to
clamp down on cable theft and fuel theft, which at the rate
they are happening, should have been classified as economic
sabotage and dealt with harshly.
As the EFF, we therefore want to reiterate that Eskom should
be under the Department of Energy and that energy supply must
be stabilised with different energy sources, including safe
coal, nuclear energy and renewable energy sources. The state
must own the natural resources of this country. The
exploitation of mineworkers and unsafe working conditions
needs to be paid urgent attention as with only 120 mine health
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and safety inspectors currently employed, your department
cannot effectively cover all mines in all nine provinces.
Chairperson, currently, the majority of oil refineries in
South Africa are owned by the big oil companies.
These companies are exploiting our workers and are driven by
profit. Central to the department’s plans for localised
beneficiation and processing of raw materials, should be the
transformation of the mining and energy sector in ensuring
ownership and activity in both sectors are reflective of the
country’s demographics. Minister, your department has shown
overtime, its inability to deal with irregular expenditure,
not complying with Treasury regulations and supply chain
management policies.
The procurement of 2 500 megawatts of nuclear energy, is
listed in the 2019 Integrated Resources Plan, but the plan
requires affordability, due to corruption, looting of state
resources and mismanagement. Citizens must suffer the
consequences of your state capture. As the EFF, we reject this
budget. I thank you, House Chairperson.
The DEPUTY MINISTER OF MINERAL RESOURCES AND ENERGY: Thank you
very much, hon Chairperson, the Minister of Mineral Resources
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and Energy, and the Chief Whip of the Majority Party. Hon
Chairperson, we will entertain the stance of the Democratic
Alliance of being opportunistic by grandstanding and raising
unfounded issues here in this Council. The Integrated Resource
Plan, IRP, is very clear and we are open to workshop the
Democratic Alliance if need be. There are no called dinosaurs
here, we only speak of the energy mix as per the IRP 2019,
aimed at curbing energy poverty. The nuclear, the cold gas and
renewables as well as the battery storage are apart of the
just transition.
Hon Chairperson, as the hon Minister, Gwede Mantashe, has
indicated mining remains at the centre of our economy. This
has been further emphasised by the role mining has played at
the height of the coronavirus 2019, Covid-19, pandemic since
its outbreak in 2019 up-to-date. It is precisely for this
reason that exploration strategy speaks to increasing South
Africa’s share of global exploration finding by up to at least
5% by the year 2025. It was against this backdrop that we
convened the three provincial Mining Indabas in the provinces
of Limpopo, the North West and Northern Cape. This culminated
in the Africa Mining Indaba where we repositioned not just
South Africa, but the entire continent as a suitable mining
investment destination.
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Hon members, this reaffirms our international stance that
South Africa cannot afford to be an island of success amidst a
sea of poverty. Within our country we maintain that three
provinces mentioned can constitute a mining belt with a range
of economic activities catapulted by the mining value chain in
which local communities can participate. However, unless we
find those mineral deposits we will not be able to grow the
mining sector. The current geopolitical standoff between
Russia and Ukraine is clearly demonstrating our challenges
with regard to the role of commodities such as those
pertaining to energy generation. Energy is at the crossword
not only on account of the Russia-Ukraine conflict, but also
due to the ongoing challenges around combating global warming.
As a country this means that whilst perusing our development
programmes in the mining and energy sector as informed by the
Mineral and Petroleum Resources Development Act and integrated
resource plan 2019, we must factor into climate change
concerns. Our stance on climate change is felt out in the
national determine contributions as revised and submitted at
Conference of the Parties, Cop 26, in November 2021. Our
emphasis on a just transition speaks to the inclusion of all
energy sources as reflected in the IRP in order to move from
higher to lower carbon emissions. The Cabinet has approved the
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exploration strategy which was developed to give effect to the
South African Economic Reconstruction and Recovery Plan in
respect to the mining industry. The exploration strategies key
to the future of mining in South Africa to unlock mining
potentials. The strategy is ... [Inaudible.] ... on addressing
issues economic growth, social transformation, impact on
environmental concerns. I hope the EFF is listening. We
therefore appeal for your support as we embark on progress to
lobby support from Amakhosi of the Eastern Cape on the ...
[Inaudible.] ... that have so far been ... [Inaudible.] ...
through various court actions.
As the hon Minister has said that from time to time while we
debate on whether to explore or not the multinational
companies involved at discovering gas and oil offshore in
other jurisdiction within our region and further north of the
continent. Junior exploration is part of the exploration
strategy and in fact transformation remains the hallmark of
all mining endeavours from the upstream to downstream. As the
hon President indicated in his state of the nation address
South Africa is endowed with minerals of the future. This
future that we speak of relate, amongst others, to how our
minerals can be used to contribute to combat climate change.
As the Minister has indicated we accompanied the President to
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Mogalakwena in Limpopo to witness the transformation of diesel
power truck, into those powered by hydrogen which is within
the hydrogen very initiatives. As we own our 90% of the
estimated global platinum reserves, we are poised to be a
global leader on this important commodity that promises to be
a major source of absolute clean energy into the future.
Provinces must, therefore, begin to look into innovative ways
and how they can align themselves with those national and
global development as part of positioning South Africa at the
heart of the global energy market into the future. Link to the
exploration strategy which seeks to speak to the upstream
mining activities in the benefit is the beneficiation
masterplan which speaks to the downstream mining activities.
In essence we are saying South Africa in particular and Africa
in general must cease to be mere exporters of raw materials
that ironically return as expensive value-added products
through imports. Africa deserves to be an industrial site of
various end-user product production. The platinum group metals
we are endowed with can be beneficiated into countless end-
user products from both industrial and domestic or household
usage. For instance, the platinum group metals, PGM, can be
used for catalytic converters and fuel cells on the other hand
and for jewellery.
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Hon members, there are number of strategic interventions that
the state-owned enterprises have done. The said group is
currently pursuing the acquisition of a brownfield asset with
a view to maintain refinery capacity and capabilities, whilst
ensuring security of energy supply in the country. The ...
[Inaudible.] ... has successfully acquired 25% shareholding in
the 100 megawatt Aqua Redstone project located in the Northern
Cape. The strategy fuel fund has successfully acquired 50% of
... [Inaudible.] ... storage facility in the Western Cape.
This facility has a storage capacity of 1,6 billion litres per
annum that represent +-30% of the available terminal
infrastructure capacity for the high growth Cape Town fuel
market. To date the department through the independent power
producers, IPP, office has processed the tariff reduction
applications for 13 IPPs from Bid Window 1 to Window 3 since
the inception of the refinancing protocol.
The National Energy Regulator of South Africa, Nersa, has
approved a negotiated price agreement between the Eskom
Holdings and Hillside Aluminium in Richards Bay, uMhlathuze
Local Municipality, KwaZulu-Natal in line with the interim
framework for long-term National Prosecuting Authority, NPA’s,
effective from the 1 August 2021. The first commercial
demonstration fuel cell using Mintek manufactured catalyst has
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been installed at one of the military hospital in Pretoria.
The SA Nuclear Energy Corporation is in the process of
developing the multipurpose reactor project as a replacement
for the Safari-1 reactor. The project is expected to create
5 000 direct and 26 000 indirect jobs, created during
construction. The Mintek continues to expedite research and
development in rapid diagnostic kits. The development is
geared towards the detection of various burden of disease such
as Covid-19, the human immunodeficiency virus, HIV,
tuberculosis, TB, malaria and other priority noncommunicable
disease through the use of gold-based nanotechnology.
As I conclude, hon Chairperson, I take this opportunity to
thank the Minister of Mineral Resources and Energy for his
continued support since joining the department. The office of
the director-general, DG, and officials of the department as
well as employees and all heads of various entities that
report to the department. I thank the staff in my office for
their unfailing support and I also count on your continued
support for the success of our work. Lastly, I wish to
reiterate that as the Department of Mineral Resources and
Energy we are unhappy with the manner the Budget Vote has been
processed. We thank our colleagues in the select committee and
appeal to our social partners, the workers, the industry and
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communities to continue working with us to grow and transform
the mineral resources and energy sector as we continue doing
our work effectively and efficiently. I thank you.
Ms L C BEBEE: Chairperson, greetings to you and your Deputy,
to the Minister and his Deputy, members of the House and
special delegates, The Policy Vote debate comes at the time
when South Africa’s energy insecurity is now widely understood
as a barrier to the country’s economic growth, and also a
stumbling block of great magnitude to the long-term fixed
capital investments in productive sectors of the economy.
Unreliable electricity supply has direct and negative effects
on businesses and households. For instance, frequent load
shedding results in foregone sales for businesses and damaged
equipment that can preserve food for households. This calls
for the reconfiguration of the electricity sector in South
Africa which has proven to be one of the hardest network
industries to reform. As South Africa’s case demonstrates,
purposeful efforts to reform the electricity sector in the
interests of efficiency, reliability and cost-effectiveness as
outlined in the Economic Reconstruction and Recovery Plan are
already being pursued aggressively by the ANC-led government.
As far back as the 2020 state of the nation address, His
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Excellency President, Cyril Ramaphosa, announced the
intentions to enable additional solar and wind capacity, and a
greater role for municipalities, allowing them to source their
power from the Independent Power Producers, IPPs. At the time
of this Policy Vote debate, Eskom has established a separate
transmission subsidiary named the National Transmission
Company of South Africa and is on track to complete its
unbundling by December 2022. To regulate this reform, the ANC-
led government has approved the amendment to the Electricity
Regulation Act for public comment, hon Smit.
The separate transmission subsidiary and the Electricity
Regulation Act, taken together, will allow a more diverse
hybrid electricity market in which the vertically-integrated
Eskom remains the dominant player, but not a single buyer of
electricity, and that IPPs contribute a certain amount not
more than 30% of generation capacity. This in turn will allow
the municipalities in various provinces to invest in self-
generation or rather IPPs for some or all of their electricity
supply. More importantly, this will minimise the tensions
between low-income households and the municipalities, as well
as Eskom over subsequent disconnections due to nonpayments as
renewable energies are cheaper relative to other sources of
energy generation.
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While allowing municipalities to source their electricity
directly from IPPs presents opportunities both to develop
electricity infrastructure that is more responsive to social
imperatives and improve the energy security in the country, it
also threatens Eskom’s financial performance, especially if
municipalities indebted to the utility decide to migrate away
to IPPs without settling their outstanding debt. In other
words, we must have safeguards to ensure that the procurement
of electricity directly from IPPs by the municipalities for
their residents does not take place at the cost of debt
service provision to Eskom.
The Eskom’s Active Partnership Model developed by the Inter-
Ministerial Committee headed by Deputy President David Mabuza
is likely to produce a more favourable outcome for both Eskom
and municipalities. Building on the partnership between Eskom
and Phumelela Municipality in the Thabo Mofutsanyane District
in the Free State province reached in 2017 which helped with
effective revenue recovery and reduced outages for residents.
The new partnering approach is premised on Eskom taking over
the electricity distribution so that proper management systems
are put in place and bulk electricity suppliers are paid. This
approach is currently being tested in Maluti-a-Phofung
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Municipality in the same district as Phumelela Municipality in
the Free State province.
Although Eskom’s Active Partnership Model is yet to be piloted
in other indebted municipalities, four municipalities have
reduced their debt in the KwaZulu-Natal province, namely
Ulundi which was owing R99,2 million from an original debt of
R105,3 million, Newcastle was owing R137,8 million from the
original debt of R264,8 million, Msunduzi was owing
R189,4 million from the original debt of R199,9 million) and
Endumeni was owing R36,2 million from the original debt of
R54,2 million. Hon Smit, there is no doubt all those
municipalities from KwaZulu-Natal are paying. I wonder if
those under your watch are paying. We wonder how many DA-led
municipalities have reduced their debt to Eskom since the
party took over. Just asking the question is sufficient to
provide an answer.
The partnership between Eskom and the municipalities
underpinned by resolutions to settle outstanding municipal
debt will go a long way in terms of accelerating the Energy
Efficiency and Demand Side Management grant programme. This is
the programme initiated by the Department of Mineral Resources
and Energy to monitor energy savings in higher intensive
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economic activities. As of now, more than 200 municipalities
in various provinces have participated in the Energy
Efficiency and Demand Side Management. In the current
financial year, the Department of Mineral Resources and Energy
will include 52 municipalities that will participate in the
programme funded through the fiscus and complemented by donor
funding. The importance of this programme is that it will
allow Eskom to avoid running its power stations intensively to
the extent that they are insufficiently maintained. In
addition, this programme will minimise the use of diesel-
dependent open cycle gas turbines to meet the peak demand,
especially now that there is uncertainty over the supply of
crude oil as a result of the conflict between Russia and its
neighbour Ukraine.
Another energy-saving initiative is the introduction of an
appropriate national legal and regulatory framework for
disruptive technologies such as Small-Scale Embedded
Generation, which if scaled up, would limit the dependence on
Eskom’s grid, and thus redress the challenges of the
electricity sector in the country, especially the high
electricity tariffs, as well as unreliable electricity supply.
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Before the amendment to the Electricity Regulation Act, small-
scale embedded generation was popular in commercial and
industrial sectors, as well as in wealthy households with
installations less than 1 megawatt each or much lesser.
However, the amendment to the Electricity Regulation Act
offers a window of opportunity to increase the threshold for
embedded generation from 1 to 100 megawatts. The scale-up of
small-scale embedded generation will increase investments in
local manufacturing and skills development, especially in
Gauteng and Western Cape provinces where there is a large
fraction of households and businesses that can afford the
capital costs of purchasing solar photovoltaic systems. In
short, the market for small-scale embedded generation is
potentially huge and employment could be created rapidly as it
takes less than six months to train an employee in an
installation service.
As soon as Kusile and Medupi power stations achieve operations
up to the expected optimal levels, there will be a need to
build new coal mines to supply coal inputs to these newly-
built power stations. Thus, new job opportunities will be
created in impoverished areas in Limpopo and Mpumalanga
provinces.
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Although opposition parties like the DA may argue that the
building of Kusile and Medupi power stations, as well as new
coal mines, undermine the country’s effort to reduce
greenhouse emissions that contribute significantly to climate
change, the ANC-led government has shown commitment to
investment in research and development to take advantage of
the introduction of information and communication technologies
and the Fourth Industrial Revolution. In particular, the SA
National Energy Development Institute has deployed its
research capacity to the task of developing clean coal
technologies to put in place measures to tackle emissions in
coal-fired power stations and help the country achieve its
commitment to the Paris Climate Agreement. Furthermore, the DA
may assert that a great number of jobs in the agriculture and
tourism sectors in Limpopo and Mpumalanga Provinces will be
lost as a result of invasive mining activity and downstream
degradation.
While assertions about invasive mining activity and downstream
degradation have something in them, evidence from reliable
sources nullifies these assertions. In other words, what the
DA misses is that job losses in the agriculture and tourism
sectors would be compensated ... I hope you are listening to
me, hon Smit. Interestingly, studies do indicate that
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structural transformation in the form of a transition from
agriculture to the manufacturing and mining sectors are
labour-absorptive and tend to reward workers handsomely
relative to the agriculture and tourism sectors.
This is primarily because the companies in the manufacturing
and mining sectors are unionised and thus it should not be
surprising that they have successful lobbying support.
Of course, the building of Kusile and Medupi power stations
suggests an obvious need to invest in the rail and water
infrastructures. in Limpopo and Mpumalanga provinces. With
regard to rail infrastructure, Transnet will partner with the
private sector to expand the rail network, as well as increase
the number of locomotives. This is the step in the right
direction insofar as the ANC-led government’s efforts to shift
bulk freight from road to rail are concerned. At the same
time, the department is aware that the cooling of Eskom’s
power stations, especially in Mpumalanga, makes the utility
South Africa’s single largest water customer. The building of
the Kusile power station and its projections for future coal-
cooling water requirements suggest that new dams will be
needed more rapidly within Mpumalanga.
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As I conclude, that the ANC-led government will invest in the
Lesotho Water Highlands Project to increase South Africa’s
share of the bulk water supply. The Department of Mineral
Resources and Energy has been able to perform under very
difficult circumstances and its Annual Performance Plans are
steering the energy sector in the direction of the Economic
Reconstruction and Recovery Plan. Therefore, the ANC supports
this budget, Sir. Thank you so much.
Mr M A P DE BRUYN: Hon Chair, the main purpose of the
department’s budget is to formulate policy and regulations to
ensure that the necessary structural reforms occur to
stimulate economic growth. Unfortunately, when it comes to
ensuring economic growth, I fail to see that this department
is living up to its mandate. On the contrary, with constant
load shedding that has an enormous impact not only on the
mining industry but also every business big and small I fail
to see how economic growth is ensured - not to mention the
sky-high fuel prices that is constraining our economy even
further.
The ideal would have been to provide fuel at an affordable
rate in South Africa to ensure that not only the mining and
other industries, but also businesses in general, can operate
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more cost effectively to stimulate economic growth and job
creation. But instead government and the department hike fuel
prices with more that R10 per litre of fuel going towards
taxes and then the department blames the weak rand and oil
prices, etc, for the high cost of fuel. Surely this is not
policies and regulations ensuring economic growth.
With regard to electricity, congratulations on connecting
another 166 000 households to the grid and giving them access
to electricity, as well as for the planned 640 000 households
to follow. But government can’t even supply the country with
sustainable electricity at this stage. Where is the extra
electricity going to come from for an additional more than
600 000 households?
In his speech the hon Minister stated that no imbedded
generation facility with a capacity of more than 10 megawatts
have been registered so far and this begs the question, Why?
The department will have to ensure realistic policies,
regulations and incentives to ensure the development of these
facilities. And is this the case?
The hon Minister also stated that Eskom is the primary
supplier of electricity and that all other projects are
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intended only to supplement Eskom. This narrative hon Minister
is the reason why load shedding will be a part of our day-to-
day lives for the foreseeable future. Any fool knows by now
that Eskom has deteriorated into nothing more than a
bottomless pit of corruption and failure under the ANC
government.
It is now time for new solutions by independent stakeholders
if we wish to see the sustainable supply of electricity in
South Africa. Every person, company and stakeholder willing
and able to contribute to the generation of electricity should
rather be embraced in this current situation instead of being
haltered by policies and red tape. All the projects and
developments that is planned for the future from nuclear
generation to natural gas and so forth are all good and well.
But how are these projects going to be funded if and when the
economy collapses as a result of load shedding?
Afrikaans:
Dink aan die toekoms, maar werk aan die hede, sodat daar iets
kan wees om te kan belê in toekoms.
Suid-Afrika is en bly steeds ’n land met potensiaal. Nie net
is Suid-Afrika mineraalryk nie, maar hy is ook ryk aan
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entrepreneurs en denkers. Hy het ’n volk wat bereidwillig is
om te streef na ’n beter land en toekoms, maar om dit te kan
benut sal hierdie departement ongelukkig eers moet begin
voldoen aan sy mandaat. Baie dankie.
Mr M NHANHA: Hon House Chairperson, good afternoon hon
members, around 276 BC, planet earth was graced with the birth
of a man in Libya, an ancient Greek who will go on to become a
revered mathematician, poet, astronomer, a music theorist and
arguably the founder geography as we know it today. At about
240 BC Eratosthenes, affectionately known as Pentatholos told
the world that the planet was not flat as we see it, but it
was round. Skeptics of the time laughed him off at called for
him to be confined to a psychiatric institution for
examination because they believed he was either losing his
mind or he was totally insane.
We probably all know the story. Ultimately he was vindicated
as indeed planet earth as we now know it is round. The subject
of my speech today is not about the ancient Greeks. I am
pretty sure the hon Michalakis would have been pleased, and
again it is not about mathematics, astrology or geography. The
Eastern Cape wants to be known as a province of legends, quite
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frankly, there is nothing legendary about the present state of
affairs Ephondweni.
One of the key economic drivers and creators of employment in
the province, is tourism which has drastically declined due to
COVID-19 pandemic, resulting in an unemployment rate which now
stands at 45%, and it’s the highest rate of unemployment in
the country in all the nine provinces. For now, let’s forget
about all the tourism attraction sites in the Eastern Cape and
let’s talk about the Wild Coast.
According to the travel guide, Wild Coast is a cool 250 long
kilometre stretch of rugged and unspoilt coastline that
stretches from north of East London along sweeping bays,
footprint-free beaches, lazy lagoons and rocky headlands.
Tourism in South Africa adequately describe this jewel as an
unspoilt natural treasure which stands ready to receive
visitors that can explore this renowned beauty, either by
foot, by 4-by-4 or horseback before embarking on fishing
expeditions or snorkelling and diving outings.
Not so long ago, you will recall that it was the Department of
Mineral Resources and Energy through its actions that divided
the community of Xolobeni, split families apart ...
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[Inaudible.] ... blood brothers and sisters against one
another, and led to the death of Bazooka Radebe, the
chairperson of Amadiba Crisis Committee, an organisation that
is campaigning against mining.
It boggles one’s mind as to how it is possible for the
Department of Mineral Resources and Energy to once again
commit such an untruthful act in this instance under the
leadership of Minister. And I dare say with your approval that
your department granted Shell rights to conduct exploration
for fossils fuels in the Wild Coast coastline despite
objections from the affected communities, activists and
advocates and evidence backed by scientific research that was
highlighting the colossal risk of damage to the environment
and its wildlife - nonetheless, on 8 December 2021, shell
commenced with its seismic blasting in the Wild Coast.
Scientific evidence arguing and advising against seismic
blasting in the Wild Coast, far outweighs that of those who
are hellbent on damaging our environment driven by greed.
Sceptics laughed off Eratosthenes and called him insane, as we
now all know it turned out he was right because he was an
expert in his field. On 28 December 2021, the High Court in
Makhanda stopped Shell in its tracks by granting them urgent
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interdict, stopping further seismic exploration by the oil and
gas giant on the Wild Coast because Shell flouted the
constitutional rights of affected indigenous communities.
Hon Minister, under your watch, your deportment has failed to
protect the interests of those who put you in office. Your
department has, just like the sceptics that laughed off
Eratosthenes, you ignored expert advice and you are not worthy
to be the Minister of Mineral Resources and Energy. You may
have survived a motion of no confidence in the National
Assembly, come 2024, you will not survive.
I am pleased to note that the of the Wild Coast have refused
to be divided, and have stood united across colour lines in
defence of this pristine coastline. We owed it to the
generations to come. We must bequeath them a planet in a state
we found it in, and failure to do so they will hold us in
contempt.
Hon Deputy Minister Nkabane, I thought I was ignorant. When
you came to the podium I asked colleagues and even your own
colleagues, and some of them seem not to recognise you. I
thought that before you could think of workshopping the DA,
maybe you should start working on your profile as a Deputy
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Minister. Secondly, hon Modise, the hon Nyambi always say that
I mustn’t play the man but the ball – I would just stop at
saying that I’m sure sisi [sister] you have an off day and you
are not feeling well. I struggled to understand what you were
trying to say but I will give you a benefit of a doubt.
Setswana:
Ms D MAHLANGU: Chocolate, o na le mathata wena.
English:
Mr M NHANHA: Hon Mvoko, it is worrisome that in your
presentation, you shied away from the issue that I have raised
on the Wild Coast.
Mr M NHANHA: Hon Minister, in your opening statements, you
spoke of rising fuel prices and other goods related to it. But
remember that the DA cautioned the ANC government not to vote
in the United Nations, UN, condemning what Russia was doing to
Ukraine. Now that chickens are coming home to roost. We are
blaming everybody else, except yourselves. The failure of the
ANC not to vote against President Putin’s actions in Ukraine
actually emboldened and cheered on President Putin for what in
a state of disaster told the world, and the ANC has got to
take responsibility. It is worrisome ... [Interjections.] ...
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Mqwathi that your attitude against NGOs you tend to call them
as ugly developments. I would suggest to you, mkhulu wam [my
elder] that you should rather embrace these NGOs because they
will help to keep your government and your department on your
toes and you won’t make mistakes that you’ve just nearly made
in the Wild Coast.
Mama uBebee, you have dropped your standards terribly low. I
heard you mentioning municipalities that used to owe Eskom
about R4 million now they are owing R30 million plus.
Essentially we are saying that they have paid 40% of what they
owed to Eskom. With all due respect mama, that is a very low
baseline. In the Western cape, where we govern, municipalities
pay Eskom and they pay Eskom on time. [Interjections.]
And lastly, Mama uBebee, I heard you say that evidence from
relevant sources, and you sound like an undercover journalist.
As Members of Parliament, we don’t expect people to come and
tell us about reliable sources, give your scientific research;
give us the results; give us the evidence, otherwise you sound
like an undercover journalist. It’s probably a career that you
might have to consider after you are done with politics. Thank
you very much, hon House Chair. [Interjections.]
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Mr A J NYAMBI: Thank you, House Chairperson ... [Inaudible.]
...
Ms D G MAHLANGU: MALIBONGWE!
The HOUSE CHAIRPERSON (Ms W Ngwenya): It looks like hon Nyambi
has connectivity challenges. We will wait for him to come back
while we are proceeding.
Mr A J NYAMBI: ... Deputy Chair, Ms S Lucas, Chief Whip, hon
Mohai, Minister ... House Chairperson, can you hear me?
The HOUSE CHAIRPERSON (Ms W Ngwenya): Yes, I can hear you now.
Mr A J NYAMBI: I will switch off the video to reinforce the
network.
IsiXhosa:
USIHLALO WENDLU (Ms W Ngwenya): Yenza njalo sana, siqhube.
Mr A J NYAMBI: ... Minister Mantashe, provincial delegates,
fellow members, ladies and gentlemen, let me take this
opportunity to add my voice in conveying condolences to the
family and colleagues of Dr Namane Magau, whose untimely
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passing has dented our efforts in the fight to stabilize our
energy as a country. As a board member of the South Africa
Nuclear Energy Corporation, Necsa, Dr Namane Magau gave it her
all until the day that she died. Her talents and expertise
will be sorely missed. And yet, let me be allowed to take this
time to release her beautiful soul, may her beautiful soul
rest in eternal peace.
House Chairperson, the ANC-led government has done what deemed
politically impossible, as it reversed to a greater extent,
the racial nature of capitalism and the neo-colonialism of a
special type that were inherited from the sadistic project of
apartheid that hon Nhanha has forgotten about.
However, there are forces that are still working against
transformation and the radical change in particular. The
apartheid regime special planning undermines the government’s
efforts to reverse the division of South Africa into local and
central states, which is responsible for horizontal inequality
in the country. Access to electricity in the democratic South
Africa is paralleled by high levels of poverty and socio-
economic inequality. Under the apartheid regime, for instance,
nearly all white households including remote farms enjoyed
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secure and reliable electricity connection. While a few black
townships and informal settlement had access.
The ANC-led government has introduced the Integrated National
Electrification Programme to rectify this disparity. But
overshadowing such a good initiative is none other than the
legacy of the apartheid regime that hon Smith and hon Nhanha
seem to forgot about it today, particularly its spatial
blaming.
The Department of Mineral Resources and Energy, DMRE, has
transferred subsidies to Eskom and over 135 municipalities in
different provinces today, to accelerate the rolling out of
grid connection under the Integrated National Electrification
Programme in the current financial year.
However, House Chairperson, the main challenge facing Eskom
and municipalities is that they are unable to complete the
electrification programme within the year of funding. Thus,
the speed of electrification has reduced thereby allowing the
backlog of electrification to increase. One of the cited
reasons for these is linked to apartheid spatial planning. To
be more specific, a significant portion of the remaining
household to be electrified are sparsely populated rural
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areas, mostly in KwaZulu-Natal, KZN, Eastern Cape, and
Limpopo, and the remainder is urban informal settlement often
densely packed shacks are unsafe to connect to the grid. In
other words, the sparsely populated rural areas and informal
shacks are located in the former Bantustans territories set
aside for black people under the 1913 Land Act, hon Nhanha.
of which the DA and the FF Plus do not wish to tackle head-on,
as is the core engine of poverty and inequality in the
country, as their presence in Parliament follows a twin
strategy. This is supporting a democratic dispensation while
ensuring that there is continuity in white power and
privilege. It’s simple as that hon Nhanha. Hopefully, today
you will understand.
Regardless of the few ailments such as apartheid, spatial
planning, the DMRE has come up with a new household strategy
to assist Eskom and municipalities to provide universal access
to electricity in 2025, as outlined in the medium-term
strategic framework. In the same vein, the demand DMRE will
procure the services of professional service providers to
conduct studies in five provinces, which is Gauteng, Eastern
Cape, Mpumalanga, Limpopo and the Northwest in the hope that
these studies will be utilised to set rules and timeframes for
electrification roll out, as well as provide clear guidelines
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concerning which technologies to use in the electrification
process. To be sure, these studies to be conducted in line
with the National Development Plan, NDP, recommendation of a
thorough review of target planning and technology choices,
funding and implementation regarding the national
electrification and energy mix. In doing so, these studies
will decrease the backlog of electrification.
To complement this, six new substations will be built and nine
substations upgraded to allow a smarter and nimbler connection
to the grid in a sparsely populated rural areas and informal
shacks. Alternatively, households in the sparsely populated
areas and informal shacks will be connected to non-grid system
electrification, mainly, solar home system electrification.
What is unique about this solar home system is that it is not
only limited to lightning and challenging, but it will be
extended to reconfiguration coupled with Liquefied petroleum
gas, LPG in order to enable the household electrified through
non grid connection to be able to cook. Non-grid connections
are in line with the NDP, as a plan indicates that these
alternatives should be applicable to household for whom grid
connection are either costly or impractical.
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More importantly, 15,000 households connected through the
solar home system will be targeted in the current financial
year. Interestingly, the professional service providers will
be appointed to monitor and evaluate the solar home system
installation to ensure that they are completed on time and
installed according to specifications. The significance of the
solar home system is not limited only to tackling racial
segregation by increasing the number of households with access
to electricity, but will also minimize the burden of high
electricity tariffs, and impoverished household, but often
resort to sources of energy such as wood cattle dung, down
paraffin, etc. These contribute to carbon emissions, which is
harmful to the environment.
House Chairperson, it is worth noting that the success in
electricity is not reflective of affordability given that many
households cannot afford the electricity to which they are
connected. The amendment with the Electricity Pricing Policy
is designed specifically to address the issue of non-
affordability, hon Smith. This is because electricity revenue
and only financial survival are closely linked in metropolitan
municipalities. For instance, the DA-run Metropolitan
Municipality like the City of Tshwane and Johannesburg in
Gauteng province as well as the City of Cape Town in the
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Western Cape, are more dependent on electricity as a source of
revenue. Thereby suggesting that these municipalities increase
the commodification of basic public goods such as electricity
and water.
In the context of these metropolitan municipalities, the
commodification of basic public goods and trenches, municipal
racism intended to crowd out instead of crowding in the
majority of black people living in townships and informal
settlements. Moreover, the DA-run metropolitan municipalities
are heavily exposed to illegally electricity connection as a
result of using electricity tariffs to generate super profits
and Eskom estimate that illegal electricity connection cost
the country almost R20 billion per year. If the DA run the
best municipalities as you want us to believe, hon Smith as
all of you most of the time claim, the reality is indeed, the
“Truth is stranger than fiction.”
Hon Nhanha. I’m surprised today that as somebody who was once
a member of our glorious movement, you don’t understand why we
call Eastern Cape “home of legends.” You don’t know that you
and me are here today because it’s not a disputed fact that
Eastern Cape has produced many of leaders that fought for the
democracy we are enjoying today. And today you have forgotten
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why the Eastern Cape is the home of legends. What a shame my
friend!
Hon Smith and hon Nhanha, we are teaching you all the times
that we are not discussing the hon Minister Mqwathi or the
Deputy Minister or we are discussing the budget. That is why
we are teaching you that play the ball, not the man. But you
said that by contradicting yourself by saying “We are not
playing the ball we are playing the man, we are playing the
woman. What a shame my friend!
Hon Smith, the least said about your attack, the better. You
don’t understand what our glorious movement stands for. The
ANC is for a non-racial, non-sexist, democratic and prosperous
society, that’s what we believed in, that’s what we always
fight for and that’s what we will always advocate. And once we
discuss a Budget Vote, we are not discussing a Minister, but
we are discussing Budget Vote 34. And when we support it as
the ANC, we are not supporting it because it is delivered by
the ANC Minister, but we’re supporting it because it’s
addressing challenges facing the people we represent in
different provinces.
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Hon Nhanha, you represent Eastern Cape, not Western Cape for
your information. Why are you undermining what the Eastern
Cape stands for? The very same province that sent you to this
House to come and represent them and you fail to represent
them. Hon Mantashe, whenever we call the department and the
department is coming to present at the committee level we
always raise critical questions. We are always robust and
always forecast. But one thing for sure, we don’t play the man
we play the ball. Don’t make a mistake because you don’t know
the Deputy Minister and you don’t know the leadership and you
claim she must deal with her profile. What a shame? And worse,
somebody who is committed. This is Dr Nobuhle Pamela Nkabane,
the Deputy Minister of Mineral Resources and Energy. What a
jealousy and a disappointment? ... [Interjections.] ...
Mr M NHANHA: You are singing for your dinner, mchana
Ms S E LUCAS: The same wena [yourself] the same.
IsiXhosa:
ILUNGU LENDLU ELIHLONIPHEKILEYO: La masela.
Mr A J NYMABI: ... hon Nhanha, you must enjoy when we are
discussing because we never disrupted you. Hon Nhanha, at the
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ANC, we support this Budget Vote. We are not supporting it
because it’s ANC as I indicated, but we are supporting it
because it’s dealing with the issues that are affecting our
people on the ground. And it’s dealing with what is happening
in our respective provinces that we represent.
Hon Smith, honestly, must we come here to teach you how to
debate the Budget Vote after so many years being an MP and
towards the end of the term because you failed to grasp and
understand what is being presented by the Minister? Even if
they have prepared a speech for you, give yourself some time
to listen. Almost all that you have said was addressed by the
Minister and the Deputy Minister.
The DMRE will continue to implement important programmes in
the manner that represents the interests of the majority of
South Africans. As the ANC, we definitely support this Budget
Vote. Thank you, House Chairperson.
The MINISTER OF MINERAL RESOURCES AND ENERGY: Thank you very
much, hon Chairperson and members, we welcome all the
comments. We are quite happy with the comments that enriched
the debate. We are quite comfortable with that. I want to
start off by explaining that hon Smit is not expected in
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Luthuli House. I would imagine that he is expected in Theba
Hosken House in Cape Town. So, he must not confuse his head
office with the ANC head office.
The question of Eskom having enough energy, again it’s another
interpretation of lack of understanding. When we saying an
electricity rating institution has this amount connected and
is operating at a different level and we say that gap reflects
suboptimal performance of that institution. That what it is,
Chairperson.
I am not sticking to coal. Coal is a reality, 75% of our
electricity come from coal – that’s the reality of the matter.
All we are saying is that until you go to Belfast and Delmas
and understand the coal field, you will not understand the
question of being cautious and be systematic and ensure that
that transition includes justice, people and community. It is
not numbers.
The nuclear energy - Europe has declared nuclear and gas as
part of the green transition. I am sure that our bosses from
Europe are saying so will follow suit. Currently, Britain is
building seven reactors because they have accepted the message
that nuclear and gas are part of the green energy.
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War in Russia and Ukraine, it is not about supporting Russia.
Our stance remains correct is that we need to work for peace.
There is no war that leads to development. Therefore, that’s
where we are.
I am not going to get to hon Arnolds because he wants this
department to take responsibility for state enterprises which
has a department. He wants us to take responsibility for
environmental regulation which has a department. He wants us
to take responsibility for labour relations which has another
Ministry but we understand him.
He complaints about exploitation reflecting that it doesn’t
have a sense of how capitalism work. If there is capitalism –
capitalism is about exploitation – it’s about creating value
out of people.
Hon Nhanha, mkhaya [my homeboy] the Eastern Cape needs
development not less thereof. If we want to be an island of
angels in a sea of poverty that is the choice you are making.
Eastern Cape needs development urgently. The interest
therefore is development.
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Now the issue of systematic surveys and we call them blasting
because you have been told so. You have not taken the time to
understand scientifically how systematic surveys work. There
is no blasting there, its air that is used there.
Therefore, the question of an unspoilt wild coast but take the
time as I do. Go to that Coast during the pick hours, you will
see who are actually going to those the areas. I went to
Mbotyi Mount one time when there was no place to sleep in
Lusikisiki. I went there. I was the only black client of the
institution, precisely because what you call reservation and
you call people singing for their supper. You are singing for
your supper because you protect your bosses at the expense of
the province. I think you should desist from that.
Thank you very much to everybody, I want to thank you,
Chairperson of the House. I am happy we’ll take all the
comments. Mr Smit talk to Mr ... [Inaudible.] when we meet he
has to meet which I will honour ask him to bring you along
so that we take you through the basics of lessons of energy
which is a science is not something that you wish for – you
stick to coal -it is reality - it is there. It’s a science
that we must adhere to and that must guide us thank you very
much. [Applause.]
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The HOUSE CHARPERSON (Ms W Ngwenya): I wish to thank the
Minister and the Deputy Minister of the Mineral Resource and
Energy for availing themselves for the debate. Hon members, we
will proceed to the Second Order of the proceedings.
Debate concluded.
POLICY DEBATE ON BUDGET VOTE NO 36: SMALL BUSINESS DEVELOPMENT
(Appropriation Bill)
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Chairperson,
Deputy Minister, Sdumo Mbongeni Dlamini, Chairperson and
members of the select committee, hon members of the NCOP,
board members of Small Enterprise Finance Agency, Sefa, Small
Enterprise Development Agency, Seda, and Co-operative Banks
Development Agency, CBDA, senior managers from the department
and entities, entrepreneurs from the sector and other
businesses that are here, ladies and gentlemen, good
afternoon.
Two weeks ago we tabled our budget policy speech at the
National Assembly indicating our intentions to improve the
state of the Small, Medium and Micro-Enterprise, SMME, sector
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as specific interventions that we are to make towards that
end.
We further indicated how we have allocated the budget of the
Department and the various initiatives we intend to finance.
We are here yet again to share with the NCOP how we have
performed in the past period and our intentions for the coming
financial year. More specifically, it is our intention to
elaborate on specific work we are doing in the various
provinces.
Before we get to the provincial specifics, it would help to
briefly recap on what we said at the National Assembly. This
will assist in setting the context for what I am to present
later.
The budget vote we are tabling here as the department contains
programmes and services drawn from progressive policies that
the ANC received as per the mandate received from the people
of our country.
Small businesses might be small in size and turnover, but they
are not small in injecting jobs in our economy and sustaining
the livelihood of our people.
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While we are in times of hardship, we have a responsibility to
use policy instruments like business grants and loans that are
offered by many government institutions to bring joy and hope
to the people of our beautiful country.
President Ramaphosa announced several measures in the Economic
Reconstruction and Recovery Plan to bring such hope and to
place our economy on a path of economic recovery to replace
the two million jobs lost because of the COVID-19 pandemic.
The President was very clear. Government has prioritized SMMEs
and Co-operatives on the basis that these are the businesses
that create the most jobs and provide the most opportunities
for poor people to earn a living. All stakeholders must pitch
in, as part of the new social compact for jobs, growth, and
transformation. We must leave no one behind.
In the spirit of social compacting, as the portfolio we met
with stakeholders, SMMEs and Co-operatives across the width
and breadth of our beautiful country over the past few months.
We undertook roadshows across the provinces engaging with
those at the coalface to hear their concerns and issues. To
date, we have covered eight out of the nine provinces.
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We opened our door to meet with strategic stakeholders
including the community constituency in National Economic
Development and Labour Council, Nedlac, international and
local development partners, large corporates in the banking,
mining, agricultural, manufacturing, retail, telecoms and
digital sectors, representative business structures, relevant
Ministries, departments and entities, and our counterparts at
provincial and local level.
In all these meetings we asked three questions: Are our
policies and instruments working for SMMEs and Co-operatives?
What can we do better? How do we work together to achieve
greater scale and impact?
Hon member, this is what have found, firstly, we need to
urgently make it easier for SMMEs and Co-operatives to do
business. The regulatory burden on SMMEs is real and we need
to reduce red tape.
Secondly, we need to do more to open markets to SMMEs.
Everywhere, small business owners are complaining about being
squeezed out of markets by large players. This is what the
Competition Commission has characterized as over concentration
in our economy.
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Thirdly, SMMEs and Co-operatives are battling to obtain credit
from banks. This has been especially disastrous for SMMEs hard
hit by the COVID-19 pandemic, by the July 2021 unrest and by
climate change disasters like the recent floods in KwaZulu-
Natal and the Eastern Cape.
Fourthly, our own reach and accessibility as the Department of
Small Business Development portfolio was questioned,
especially in townships and impoverished rural areas. We must
address this to have more impact.
Fifthly, government is not working as one joined-up force to
support SMMEs and Co-operatives. The District Development
Model, DDM, is directing us towards working as one and we must
do more to make this work.
Lastly, and which augers well for the broader social compact,
there is huge appetite and goodwill among a wide range of SMME
stakeholders to partner with us and our entities. This will
ensure that the public funds voted to the department will
leverage significant additional resources and capacity from
our strategic partners.
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We have also drawn from the collective wisdom and feedback of
the Small Business Development Portfolio Committee and Select
Committee which has helped shape our strategic focus and
priorities for 2022-23.
This approach of mobilizing strategic partnerships across the
entire small enterprise ecosystem is directly aligned to our
National Integrated Small Enterprise Development Masterplan,
which has recently been gazetted for public comments. We
invite all stakeholders to contribute.
For the year ahead, we have anchored our programs around five
themes. The first on is to enable the start-up and development
of SMMEs and Co-operatives through red-tape reduction and
enabling legislation; the second one is market development and
market access; the third is access to Business Development
Services and Support Infrastructure; the fourth one is access
to Finance; and the last one is institutional strengthening
and gearing. Because as the coordinating department we ought
to make sure that our capability is able to match our capacity
and the challenges that we are faced with.
The details of what we are doing on each of these are spelt
out in our National Assembly speech document.
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Let me now turn to some of the programs we are implementing in
the various provinces.
On the District Development Model, the department together
with the agencies has made great strides in implementing it
across the country. We are currently on a country wide product
and programmes awareness campaign for SMMEs and Co-operatives.
Our theme is unlocking opportunities for SMMEs and
Co-operatives for economic growth and job creation. We have
covered the following districts out of the eight provinces
that I mentioned earlier: Mpumalanga, we’ve been to Nkangala,
Gert Sibande and Ehlanzeni District Municipality. In Eastern
Cape we’ve been to Nelson Mandela Bay, Joe Gqabi and OR Tambo
District Municipality. In the Free State we’ve been to Thabo
Mofutsanyana, Lejweleputswa and Mangaung. In Gauteng we’ve
been to Sedibeng and West Rand. In the Northern Cape we did
Namakwa, Pixley Ka Seme and Frances Baard. In the Western Cape
we did Mossel Bay and the City of Cape Town. North West we did
Bojanala Platinum, Dr Ruth Segomotsi and Dr Kenneth Kaunda. In
Limpopo we did Capricorn and Polokwane.
The voices of SMMEs and Co-operatives loudly indicated that we
need to make it easier for small businesses to do business by
attending to all the red tapes – as I mentioned earlier.
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On a positive note, concerning DDM, several small businesses
in various districts have continued to benefit from the
support programmes offered by our department and the agencies
such as the Township and Rural Entrepreneurship Programme
commonly known as TREP, and the Informal and Micro Enterprise
Development Programme commonly known as IMEDP which are
specifically designed to advance the DD model.
On TREP we initiated in response to the urgency of the need to
rollout appropriate support to SMMEs in the townships and
rural areas. Qualifying small enterprises are provided with
financial and non-financial support in order to help them to
acquire business equipment, tools and machinery as well as
development services with a view to increase their capacity to
access economic opportunities and enhance their
competitiveness.
The department has allocated R2,8 billion over the medium-term
to township and rural enterprises, including blended finance
initiatives. A total of R371 710 849 was approved through this
programme in the last financial year.
The provincial breakdown, you will get on the speech. In the
Eastern Cape we supported 102 SMMEs, Free State 119, Gauteng
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252, KwaZulu-Natal 314, Limpopo 390, Mpumalanga 150, North
West 130, Northern Cape 234 and Western Cape 229.
All of these good stories to tell include that of Siba and
Tutuse (Pty) Ltd, which is a 100% black female-owned business
which was established in 2017. The business falls within the
clothing and textile sector. The company has done work for
local SMMEs and has received an order for 50 000 cloth face
masks from the Department of Health in KwaZulu-Natal. Sefa,
through the TREP programme, approved funding for R110 million.
The funds were utilized towards purchasing of equipment and
working capital. Through the funding ten jobs were maintained.
Azania Exclusive Collections (Pty) Ltd is a manufacturer of
African traditional clothing, specializing in traditional
textile (iSeshwe) as well as accessories like scarfs, bags and
others. Again, this is a 100% black female-owned business.
I move to say this financial year we will upscale this program
and we are allocating R953 million.
On informal and micro enterprise development programme. As the
country emerges from the pandemic, the informal township
economy will play a key role in tackling the unemployment
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crisis. As we gradually seek to revive and rebuild the
economy, it is vital to have a clear picture of how these
businesses are coping and assist them to stay afloat. Our
department, in partnership with Seda and local municipalities,
provide tools and equipment to these businesses. We offer 100%
grant to informal businesses. The focus, of course, is on
designated groups, your women, youth and persons with
disabilities. In this programme we strive to accelerate growth
of informal and micro enterprises by improving their
competitiveness and sustainability to become formal businesses
in the mainstream economy.
On small enterprise manufacturing support programme. And here
we are looking at building a manufacturing sector for an
improved industrial base through a focused import replacement
programme and build the industrial base for both the domestic
market and external market. The financial support provided
through this programme is up to R15 million per entity. As of
31 March 2022, since the programme started approving
transactions on 18 September 2020, R389,8 million was
disbursed to 53 SMMEs.
Through this programme, once more, Dear Bella, an organization
manufacturing Maxi Pads made from wood fluff pulp, which is
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safe and great for absorption, is in the shelves of Dischem.
The mission is to build and empower girls to become active and
productive citizens. Some of the Dischem stores where this
product can be found include: Vaal Mall, Westgate, Southgate,
Soshanguve Crossing, Lakeside Mall, Maponya Mall, Tembisa Mal,
Randburg Square and many other reputable malls. We appeal to
all of you to please support the small businesses. A budget of
R295 million has been set aside for this year.
On business infrastructure support programme, we have
developed a Shared Economic Infrastructure Facility, SEIF, to
support the municipalities, national government, provincial
government, private sector, Co-operatives and SMMEs through a
co-funding for the establishment of shared infrastructure
facilities. These facilities will either be a refurbishment of
dilapidated building or construction of a new structure,
building or a containerized structure model that will benefit
SMME’s, informal sector and Co-operatives. These shared
facilities can be used for production purposes and access to
market by displaying their products or their produce to the
market.
We have approved and supported five projects in this financial
year, 2021-22, with an accumulative amount of R55 000 923. The
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approved projects estimate job creation of more than 5 000
supporting emerging farmers, Co-operatives and informal
business.
The following projects have been approved through this
facility:
In the Eastern Cape at Chris Hani District Municipality a
fresh produce pack-house, fertilizer blending plant and
renovation of two buildings for a fresh market with
R20 million. The applicant, of course, is Chris Hani
Co-operative Development Centre, CHCDC, in partnership with
Department of Economic Development and Environmental Affairs.
The second one, of course, as we looking at it, is in KwaZulu-
Natal in Bergville at Okhahlamba Municipality for an SMME
Light Industrial Park supporting them with a production
facility for various sectors with a budget of R10 000 886. The
project will benefit more than 20 SMME’s including informal
business.
The next Province is Free State in Mangaung, supporting SMMEs
in various sectors. Again, this is a containerized structure
programme in the Freedom Square Market, which is supported by
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our department, the Department of Tourism and Environmental
Affairs and Letsatsi (Pty) Ltd with a budget of R6 million.
Letsatsi is an energy and power producing entity [Inaudible.]
We also call upon the private sector through their Enterprise
and Supplier Development, ESD, which is 3% allocation as per
the Broad-Based Black Economic Empowerment, BBBEE, legislation
to support government initiatives because if we are working
together we can achieve more and recognize meaningful impact
in the SMME sector, and that will lead to an economy that is
transformed.
In terms of empowering women-owned businesses, the department
has launched SheTradesZA Hub, wherein we managed to register
about 2 500 businesses; and indeed these are the businesses
that have been taken outside South Africa to the continent and
globe in order for them to enjoy the network opportunities
and, therefore, creating a market for them.
At the centre of the work that we are doing in order to
address the industrialization and localization of the products
that we talking about is the establishment of Incubation and
Digital Hubs. To date, we have 110 incubation centres that we
have established, which include 22 Centres for
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Entrepreneurship and Rapid Incubation, CFERIs, in Technical
and Vocational Education and Training, Tvet, colleges and
universities including approval of an additional four centres
at the University of Johannesburg, Soweto Campus, Rhodes
University in Makhanda Campus, Nelson Mandela University in
the Gqeberha Campus and the University of Venda in the
Thohoyandou Campus. Some of these Tvet colleges include those
at the Northern Cape Rural Tvet in De-Aar and Kathu Campuses,
Maluti Tvet College, Phuthaditjhaba Campus, West Coast Tvet
College at the Vredendal Campus and the new Esayidi Tvet
College in Umzimkhulu Campus.
This will help us sustain 86 000 jobs with SMME ecosystem
partners. Some of those existing include the ones that are in
Amatole District Municipality, Ekurhuleni, King Cetshwayo
district, eThekwini, OR Tambo, Harry Gwala and Ehlanzeni
District Municipality. Again, we calling for more partners in
order to make sure that we can beef up the capability and be
able to bring this incubatees once they graduate from the
programme to a market that will help South Africa go back to
its industrial status.
On policy and legislation, we are busy, of course, in terms of
the amendments that we spoke about through President Ramaphosa
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in his state of the nation address. And we will make sure that
SMMEs and Co-operatives funding policy finds expression in
order to deal with the gap that is estimated to be
R346 billion in order for the SMMEs to catch up and deliver
what is committed to in the National Development Plan, NDP,
the nine million jobs out of the 11 million jobs as the NDP
direct us, we need more funding, R2 billion is just a tiny
drop in the ocean.
We have commenced with consultations around various
stakeholders including development finance institutions,
Banking Association of SA, BASA, the World Bank, Business
Chambers, organizations representing formal and informal. And,
of course, we’ve just – as I mentioned - ... we are amending
the National Small Enterprise Amendment Bill.
I present to you our budget – as indicated earlier – that is
R2,8 billion and 85% of that goes to our programmes.
Chairperson, allow me to thank yourself, the Deputy Minister,
the director-general and the officials of our department for
the support that they continue to provide to us in the
Ministry and, of course, our commitment to the SMMEs of our
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country, we dare not fail, and it is our responsibility to
leave no one behind. I thank you, Madam Chair.
Mr M I RAYI: Hon House Chairperson, greetings to the
Chairperson of the National Council of Provinces, Deputy
Chairperson of the National Council of Provinces, Chief Whip,
House Chairperson for committees, Minister and Deputy
Minister, MECs, permanent and special delegates,
representative of South African Local Government Association,
SALGA, Mr De Vos.
The past two years have placed a heavy toll on millions of
people in South Africa and the world. The ones who have
endured the most pain are the working-class, the poor and
those who run small enterprises ... [Sound lost]
The HOUSE CHAIRPERSON (Ms W Ngwenya): Advocate, assist me; I
do not know whether it is my side or his side, but I can’t
hear him.
Mr J J LONDT: Just tap your laptop twice on the right-hand
side, it will improve, House Chair.
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The HOUSE CHAIRPERSON (Ms W Ngwenya): It looks like the
network is too bad on hon Rayi’s side. Hon members, we will
continue with our list, maybe he will come back later. We are
going to continue, hon members, the next speaker is hon Mvoko
Eastern Cape MEC Finance, Economic Development, Environmental
Affairs and Tourism.
Mr M MVOKO (MEC: FINANCE, ECONOMIC DEVELOPMENT, ENVIRONMENTAL
AFFAIRS AND TOURISM, EASTERN CAPE): Thank you very much, hon
House Chairperson, and greetings to you ...
Mr M I RAYI: I am back, House Chair.
IsiZulu:
USIHLALO WENDLU (Nk W Ngwenya): Baba uNgwenya, asimdedele
kancane ingaphinde imlahle futhi. Ngena, Bra Mindlo.
Mr M I RAYI: Thank you, House Chair. I just had loadshedding
and I was connected to the Wi-Fi, so I had to hotspot now. I
don’t know if I should start from the beginning, Chair?
I was saying that the past two years have placed a heavy toll
on millions of people in South Africa and the whole world. The
ones who have endured the most pain are the working-class, the
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poor and those who run small enterprises. We have had to deal
with the human cost and catastrophic economic impact of the
Covid-19 pandemic. As if this was not enough, almost a year
ago, social unrest broke out in KwaZulu-Natal and Gauteng
followed by the devastating floods earlier this year, that
affected mostly KwaZulu-Natal, Eastern Cape and North West.
While we were beginning to see signs of economic recovery
taking place, especially since vaccines have been rolled out,
the world has been dealt another blow as a result of rising
oil, energy, and food prices towards the end of last year and
an explosion of these prices after the war in Ukraine started
in February this year. Add to that the fact that Covid-19 is
still infecting over 3 000 people a day. We thank God that the
numbers are now dropping. Eskom still has not found a
sustainable solution to its electricity generation shortfall;
and you realise that our economic recovery is likely to be
long and hard.
The drumbeats of war are sounding louder and louder by the
day. It now appears that the warmongering NATO, the US-led
alliance has moved to the east to stoke fires of instability
and war in that part of the world, thus further plunging the
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global economy into a sea of uncertainty and panic. The
hashtag #WorldWar 3 has started trending again.
As the World Economic Forum that is being held in person for
the first time since 2020 opened in Davos yesterday, the
International Monetary Fund, IMF, said the economy faces
perhaps its biggest test since the Second World War. The IMF
Managing Director, Kristalina Georgieva, said that we face a
potential confluence of calamities.
Rising interest rates are adding to pressure on countries,
companies and households with big piles of debt. Market
turbulence and ongoing supply chain constraints also pose a
risk. And then there’s climate change. The scale of the
economic challenge was underscored by a new report from the
Organisation for Economic Co-operation and Development, OECD,
showing that the combined gross domestic product, GDP, of the
G7, who are the largest industrialised economies in the world
shrank by 0,1% in the first quarter of this year, compared
with the previous three-month period.
Fears of a global recession with huge implications for global
stability are real and even the IMF is calling for government
officials and business leaders meeting in Davos to discuss
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drastic measures to stabilise global economic growth, such as
lowering trade barriers, amongst others.
The Budget Vote 36 of Small Business Development seeks to
promote the development of small businesses and co-operative
enterprises. Its ultimate objective is to contribute to
inclusive economic growth and job creation in South Africa.
Hon House Chair, I’m sure we all remember that the most
intensely debated points made by the President in this year’s
state of nation address was his affirmation that the private
sector has a large responsibility to drive job creation. This
sector provides hope that the unemployment rate, which is the
highest in decades at 46,6% will be addressed. The President
reminded us that about 80% of employed people in South Africa
are employed in the private sector. The test for government in
this year and in the medium-term will be how it creates the
conditions that enable small businesses and co-operatives to
emerge, to grow, to access new markets, to create new
products, and to employ more people. Our entrepreneurs must be
given the necessary regulatory, financial and other support to
unleash their creativity and ingenuity to participate in the
economic life of the country.
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The President set out in the state of the nation address 2022
five key priorities for government, namely, overcoming the
COVID-19 pandemic, a massive rollout of infrastructure, a
substantial increase in local production, an employment
stimulus to create jobs and support livelihoods, and the rapid
expansion of our energy generation capacity. All these
priorities have implications for small businesses and co-
operatives.
We welcome the increase in expenditure of the department at an
average annual rate of 0,6% from R2,6 billion in 2021-22 to
R2,7 billion in 2024-25. However, considering the scale of the
challenges in our national economy and the globe, this
increase is by no means is enough. I also wish to express a
concern regarding the budget cuts to Small Enterprise
Development Agency, SEDA, funding in the light of rising
unemployment.
Having looked at the annual performance plans and budgets of
the department and its two entities for 2022-23, we must
welcome the progress made towards the finalisation of the
Creative Industries Masterplan, pending referral of the
National Integrated Small Enterprise Development Masterplan to
Cabinet for approval, the finalisation and implementation of
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the SMME- focused Localisation Policy Framework and Township
and Rural Entrepreneurship Programme. These set the foundation
for achieving the vision set out by the President; a vision of
a thriving small business and co-operatives sector supported
effectively with various funding schemes and government
regulations.
We must also welcome the re-introduction of the Small Business
Advisory Council as well as the measures targeted at cutting
the red tape. In this regard, we must support the appointment
of Mr Sipho Nkosi, a seasoned business expert to assist our
government to eliminate red tape that stifle small business
growth. We also welcome the Minister’s commitment to tabling a
single Bill or a legislative amendment for consideration by
Parliament. We note and welcome progress with regard to the
National Small Enterprise Amendment Bill which is intended to
amend the National Small Enterprise Act.
We believe that the achievement the department’s objectives
and fulfilment its mandate will be greatly enhanced by the
successful completion of the National Small Enterprise
Amendment Bill, for example, the amalgamation of SEFA, SEDA
and CBDA must be underpinned by an act of Parliament.
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Likewise, the establishment of the Small Enterprise Ombud
Office is exclusively reliant on the Bill. The organisational
structure and the definition of SMMEs are all linked with
amendments of the Bill.
According to the National Treasury an amount of R416 million
has been ring-fenced over the Medium-Term Expenditure
Framework, MTEF, period to establish a Small Enterprise Ombud
Service, review the Business Act, review the definition of the
SMMEs and finalise amendments to the National Small Enterprise
Act. This is a step in the right direction.
In light of unfortunate tensions and incidents of violence
between local and foreign owned businesses, it is commendable
that there are ongoing interventions aimed at bringing policy
certainty for township and rural enterprises. These need to be
buttressed by a legislative and policy framework. Legislation
ensures that sustainability and continuity are safeguarded.
In this regard, I wish to extend congratulations to the
Gauteng legislators for the signing into law the Township
Economic Development Bill. I also wish to congratulate the
City of Joburg council for adopting its Informal Trading
Policy. I wish to call on the department to finalise its
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organisational structure and ensure that the filling of
critical senior posts is given priority.
We have observed in most of our constituencies that many co-
operatives are struggling to access funding or comply with
SEFA requirements. We would like to see the department playing
its leading role in the development of co-operatives. We also
believe that the Co-operatives Development Support Programme
should include a performance linked incentive scheme.
The extension of the reach of the department, particularly to
support enterprises in townships and rural areas is welcome.
We have called before and we would like to see the department
tabling legislation so that we can facilitate the rapid
transformation of many sectors of the economy to emerging
entrepreneurs. Today the department is presenting the budget
and spending plans mindful of what needs to be done as
articulated in the Economic Reconstruction and Recovery Plan
and complemented by the reimagined industrial strategy. The
current spending plans of the department further recognise the
risks that SMMEs and co-operatives have to navigate under the
current domestic and global economic situation. The spending
plans also take into consideration the opportunities presented
by the African Continental Free Trade Areas for SMMEs,
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including women, youth and persons with disabilities-owned
small businesses.
Over the medium-term the department is anticipated to spend
approximately R7,8 billion to help SMMEs and co-operatives to
grow. The spending priorities include the support of informal
enterprises, urban and rural small businesses. Young people,
women and persons with disabilities-owned SMMEs and co-
operatives will receive targeted development interventions.
Government, through the department, will continue to support
small businesses to grow and create jobs. The Small Enterprise
Agency will implement the Township and Rural Entrepreneurship
Fund. This initiative is expected to cost closely to
R2,9 billion over the medium-term. Over the medium-term the
department is anticipated to spend approximately
R882,1 million through blended finance facilities to bolster
the growth of SMMEs.
Government knows that this investment is not enough, hence
partnership between government and private sector will be
cemented. Government will leverage the current public funding
and financing facilities to crowd in private sector financing.
We support the Budget Vote, hon House Chair. Thank you very
much.
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Mr M MVOKO (EASTERN CAPE): Thank you very much, hon House
Chairperson and greetings to the Chairperson of the NCOP, the
Deputy Chairperson, the Minister of Small Business
Development, hon Stella Ndabeni-Abrahams, the Deputy Minister,
hon Dlamini, hon members of this august House, ladies and
gentlemen, greetings to you all. On behalf of the Eastern Cape
I first wish to welcome the Budget Vote for the Department of
Small Business and Development as delivered by Minister
Ndabeni-Abrahams. The strategic focus areas for this financial
year speak to and seek to address the real challenges that are
facing small business, especially in provinces such as ours.
At a time when the economy is struggling to support our
demands, where unemployment rate is high and business
confidence is low, it is correct that the government of the
ANC uses its policy instruments to support small businesses.
Small enterprises are the cornerstone of any economy. They
contribute to local economy by bringing growth and innovation
to the community in which businesses are established. They
help stimulate economic growth by providing job opportunities,
thereby relieving government of such a burden. It’s,
therefore, our responsibility as government to create such a
conducive environment by investing financial and nonfinancial
support to small businesses to thrive.
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Hon members, the Eastern Cape is one of the six provinces that
the Minister and her department visited to conduct the road
shows. We joined them as they conducted these road shows in
Nelson Mandela Metro, in Joe Gqabi and O R Tambo districts as
they met with small, medium and micro enterprises, SMMEs, co-
operatives and other stakeholders to listen to their cries,
but also to find sustainable solutions to their challenges. It
is for this reason that we welcome their strategic areas of
focus, as reflected on the Minister’s Budget Vote speech for
2022-23, as we believe that they are responding to issues
raised during the said road shows. We, therefore, support your
initiative to reduce the red tape in an effort to create an
enabling environment for small enterprises to do business. The
success of this initiative will come a great deal, especially
for a rural province such as the Eastern Cape where business
people who reside in the far-flanged areas struggle to access
government support because of cost that is associated with red
tape.
Hon members, the Eastern Cape has identified township and
rural economy as one of its high impact projects to drive for
this financial year, moving forward. We have in this case
developed a Green Paper on township and rural economy, which
is used to consult various stakeholders to consolidate inputs
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on drafting the policy document that will guide the
implementation of the programmes on township and rural economy
in the province. The department will currently develop a
Township and Rural Economy Bill that will be gazetted and
published for comments by public and stakeholders during the
2022-23 financial year. The interventions planned are aligned
to national department initiatives and have been structures in
a manner that we address the gaps experienced in the current
spaza schemes as well as focus on key initiatives that will
unlock the potential of informal economy to grow and develop
as part of the endeavours for creating an inclusive economy.
The implementation of these interventions will be done in
partnership with various stakeholders.
Hon House Chair, we are delighted to note that the Minister
has identified the Eastern Cape as one of the provinces that
will benefit over R200 million from the R2 billion that has
been earmarked for small businesses across the country to
access funding. With the budget cuts that we are experiencing,
which makes it difficult for us to provide sufficient support
to businesses, this funding will reinforce our efforts in
ensuring that there is adequate support to grow small
businesses. We are, however, not folding our arms as the
Eastern Cape province, albeit the meagre equitable share. For
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this financial year, we have allocated R25,8 million for the
jobs stimulus fund, in keeping existing businesses in
operation to create jobs. We have also allocated R32 million
to expand SMME support through loans recapitalisation.
The Department of Economic Development and Environmental
Affairs and Tourism in the province has also supported 27 co-
operatives in the last financial year to a tune of over
R13 million, where 153 jobs were created. We are also
utilising the local and regional economic development fund
instrument to provide financial support in the local and
regional economies. This financial support is implemented in
the form of a grant to legally registered enterprises meeting
the requirements of the department. The local and regional
economic development, LRED, fund provides and help the
environment for SMMEs to thrive and enable them to create
employment for the locals. The department will continue to
provide this support collaborating with the three sphere of
government and the private sector to ensure shared resources
and reducing high indebtedness for those seeking loan support
from other funders. An amount of R19 million has been
allocated in the 2022-23 financial year.
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House Chairperson, I wish to reiterate that we remain firm in
our resolve to develop SMME sector and the informal sector.
Going forward, we aim to use our flagship project, township
and rural economy to transform business setting in our
township and rural areas, and we are hopeful that the
Department of Small Business Development Township and Rural
Entrepreneurship programme will complement the work we’re
doing on the ground. At a policy level, we need a more
coherent approach that will mobilise all sector departments
across all spheres of government to collaborate and share
resources in a more effective manner through joint planning
and resource utilisation.
The Eastern Cape needs to have complementary programmes at
local level to change the fortunes of the local enterprises
for the better, and thereby achieve our ultimate goal of
building a self-reliant and vibrant economy in our townships
and rural areas. The Eastern Cape once again welcomes and
supports the Budget Vote for the Department of Small Business
Development for 2022-23 financial year. Thank you very much,
hon House Chair.
Mr J J LONDT: Hon Chair, I am speaking as – here we go.
Colleagues when this department was established in 2014, it
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was started as a turning point for small, medium and micro-
sized enterprises, SMMEs in South Africa. Although there were
critics, there was also a sense that maybe, just maybe, this
could indeed work. Maybe it would help tackle the rising
unemployment, maybe it would help address an economy that is
going in the wrong direction and maybe it will help navigate
or even better, it would cut down on the maze of red tape
faced by entrepreneurs and business owners willing to risk it
all, to look after their families and those they employ.
Unfortunately, as we look back and with the most recent
reports being tabled before the Select Committee, it is only
the most disingenuous that can say that this department has
lived up to any of the expectations. Ever since the inception
of this department we’ve had excuses upon excuses as to why
targets are not being met, budgets being underspent and
basically the objective of this department, that of supporting
SMMEs not being fulfilled.
Colleagues, it is heartbreaking to realise that you do not see
and hear the despair of South Africans, but in particular
those that you are entrusted to help, the SMMEs to survive, to
flourish and to contribute to our successes as a country.
South Africa has one of the highest failure rates for start-
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ups and entrepreneurs, due in part to the stranglehold that
regulatory burdens and red tape have on entrepreneurs and
small businesses. Small businesses continue to struggle to
operate in a highly inflexible and rigid regulatory
environment.
This was exasperated by further red tape with the application
for COVID-19 Relief Funding. It shouldn’t therefore be
surprising that there was such a low uptake of this. During
the Select Committee meeting, hon Dangor echoed my sentiments
and concerns about the impact this department has in real
terms. Hon Minister, this should be a wake-up call for you
that across party lines we are concerned of the impact that
this department has.
What do we get from this government to help and assist SMMEs?
One word, DigiTech, an App Store with no security, no curation
and low quality and as Minister Ntshavheni stated in her
budget speech last week, and I quote:
The platform allows users to browse and download apps
developed across operating systems. It promotes South
African developed digital products/apps for purposes of
expand their adoption and use.
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Now, this is not developed by this department. This department
keeps on using excuses that they need help and assistance from
other departments. This was created by the department that you
were demoted from Minister, after you broke the lockdown
regulations or illustrated your in-depth knowledge of
geography and I quote: “I never went to Switzerland; I went to
Geneva”.
The Department of Communications and Digital Technologies, I
would hope in consultation with your current department you
would put together an App that will cater for the small
business market, but it seems as if you are not doing that,
that each department is working in isolation and in silos. How
on earth are we meant to uplift and promote out SMMEs when the
platforms we provide them with to succeed, looks like it is
created by an 8th Grader.
We are facing an ever decreasing pool of taxpayers in this
country. They are shouldering an ever increasing but failing
economic policies and our inept national leadership. If the
department truly wants to be seen as a success, that real
measurement tool should be how do you contribute to our tax
base. Instead, this department complains, as they’ve done from
year one that, they are not filling all the positions, that
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they are struggling with the organogram, yet the remuneration
off staff continues to escalate without an escalation in
positive outputs by the staff. In fact, almost 90% of this
budgets are transfers. So what on earth is the department
actually doing?
We could easily let some officials in another department
handle the little that is being done by this department now
and save quite a few million. If we cut out on roadshows, what
is there left for the Minister that she actually does? A few
questions that we should ask: The consolidation of Small
Enterprise Development Agency, Seda and Small Enterprise
Finance Agency, Sefa is urgent and the Minister must give us a
clear final date and be held accountable on when this will be
completed.
The government owes small businesses millions in unpaid
invoices. What is this Minister going to do to ensure that,
all state departments pay the SMMEs within 30 days? If it does
not improve Minister, are you willing to fall on your sword?
Because these are the few measurable that you can actually say
listen, hold me accountable for. We also need to get a full
list of the COVID-19 Relief Fund beneficiaries because as we
have seen, this government has been exceptionally good in
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making sure that money does not reach those who truly need it,
instead it is channelled to those to the ANC inside. We need
to know who they are, how many received and how much money got
lost along the way.
Hon Minister, as a country we need our SMMEs to flourish. We
need to firstly stop this trajectory we are on when it comes
to crippling unemployment. Thereafter, we must ensure that
this ship is turned around. If not, we will continue to hear
the questions about the need for this department to exist, as
long as you are defending, as long as unemployment rate keeps
increasing, as long as there is not a bigger pool of SMMEs
contributing to this tax base, you are losing. That should be
your measurement tool. This can only be done by improving our
SMMEs’ pool. If we start treating them like the VIPs, they
are. Roll out the red carpet and we should cut the red tape.
The ball is in your court hon Minister. I thank you.
The DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT (Mr S
Dlamini): Thanks very much, Chairperson. I thought I was in.
Good afternoon to yourself, Ministers, and in particular
Minister Stella Ndabeni Abrahams, Deputy Ministers, hon
members of the NCOP, distinguished guests, members of co-
operatives who are present here today and those listening all
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over the country, the small, medium and micro business owners,
ladies and gentlemen, as a country we are preoccupied with
trying to find a way out to the challenges of unemployment,
poverty and inequality.
As we speak, we have more than 11 million people who are
unemployed and this figure include discouraged jobseekers and
it also comprises of young people of working age.
Our approach to address these challenges is also at the same
time linked to the continued struggle to address the legacy of
apartheid and colonialism of a special type.
Our work to confront these challenges has been compounded by
the emergence of the 2007-08 global economic crisis, which has
been made worse by the emergence of Covid-19 and now the
unrest which affected KwaZulu-Natal and parts of Gauteng. As
if this was not enough, we also have to deal with the double
impact of disaster caused by the floods in KwaZulu-Natal and
the Eastern Cape and some in North West. Surely, these
multiple challenges cannot be addressed by the government
alone. We need progressive ideas, contribution and energy from
every South African citizen.
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The July unrest in KwaZulu-Natal and Gauteng necessitated the
introduction of formal and informal sectors business recovery
support packages to accelerate business and economic recovery
with a view to curb job loses as well as business closure. The
programme focused on uninsured small enterprises which
required funding for working capital and equipment. Blended
financial support of up to R2 million was offered per entity.
To date, the Small Enterprise Agency, Sefa, has approved over
R235 million. A total amount of over R93 million in Gauteng
and over R142 million in KwaZulu-Natal. It is anticipated that
through the disbursement of these funds 2 046 jobs will be
maintained. Through this programme 35,24% of the funding is
approved to women owned businesses and 19,6% to youth owned
businesses. While only R176 million of the approved funding
has been disbursed to affected small business, Sefa is
continuing to work hard at both approvals and disbursements
and expects to make more progress in this new financial year.
In partnership with Nedbank, financial and non-financial
support for informal traders is facilitated through business
associations. During the July unrest the scheme targeted
support for 13 333 informal traders at R3 000 each as a once
off grant amounting to a cumulative amount of R40 000 000. To
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date, a total of 8 894 applications were received and total
disbursements were made to 5 135 informal traders worth of
R13,75 billion through Sefa.
On the red tape, it is clear that as a country we cannot
succeed in our attempts to transform the economy and get our
people to play a meaningful role in the economic activities of
our country if we continue to have “excessive bureaucracy or
adherence to official rules and formalities that inhibit the
ease of doing business”.
The Department of Trade, Industry and Competition and National
Treasury have focused on specific reforms linked to 10 of the
World Banks Ease of Doing Business indicators. Our department
has been particularly active in understanding the complexity
of red-tape, convening a task team of officials from across
local, provincial and national departments and in partnership
with the Government Technical Advisory Centre, GTAC, have
completed a Diagnostic report on Red-Tape Reduction.
Coming out of this report, the department has run a municipal
level initiative of the Pilot Administrative Simplification
Programme. This has been piloted in three municipalities. We
are also taking lessons from the pilot into the red-tape
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reduction awareness programme we will run with 20
municipalities this year.
The fact of the matter is that no single ministry has the
mandate to address red-tape obstacles across the whole of
government. This can only be the Presidency. We see the Red
Tape Reduction Office in the Presidency working as an
escalation mechanism for issues that cannot be dealt with at
provincial level, by the Department of Co-operative Governance
and Traditional Affairs, by the Department of Trade, Industry
and Competition, by National Treasury, or by the Department of
Small Business Development.
There will be no duplication of efforts. The Department of
Small Business Development, Co-operative Governance and
Traditional Affairs, and the Department of Trade, Industry and
Competition have already earmarked responsibilities in red-
tape reduction on co-operatives which are supposed to be the
country’s hope when the economy is facing challenges. They
tend to assist when things are not going well in our
economically.
As a country, we need sustainable co-operatives that will be
supporting the interest of members and most importantly look
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after its communities. We must accept that we have not done
well in the front of ensuring that we have a vibrant co-
operatives movement that has the capacity to contribute to the
economy.
In this context, we are scaling up our work towards ensuring
that the co-operatives are made to be functional and have
access to financial support and markets.
Hon Chairperson, whatever the challenges are there, whatever
the obstacles that they may be but failure is not an option
for us. We will succeed. I thank you very much, Chairperson.
Mr T APLENI: Thank you very much, Chairperson, my apologies,
it’s that time of the year. Load shedding consequences of
Jamnadas are beginning to haunt us.
IsiZulu:
USIHLALO WENDLU (Nk W NGWENYA): Asiqhube, asiqhube khona lapho
ebumnyameni.
IsiXhosa:
Mnu T APLENI: UMphathiswa ofonyozayo usifake engxakini.
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English:
Thanks, Chairperson.
IsiZulu:
Nk D G MAHLANGU: Hhayi, siyakubona yekela ukukhala.
Mr T APLENI: I beg yours, Chair. The EFF rejects the proposed
budget for small businesses. We reject this budget for the
Department of Small Business Development because this is a
budget of salaries and procurement for the department and not
to help small businesses. As the EFF, we have made it very
clear in the past that we do not need a Department of Small
Business, as there is no basis to separate this from Trade and
Industry. We reject this budget, as it is a budget for a
department which was created out of a need to create positions
for factions in the ruling party and it that must come to an
end.
We know this to be true as we have been on the ground, in
various provinces across South Africa and understanding the
decision to separate this department from the trade and
industry has impacted on entrepreneurs. From our groundwork,
we have learnt that Uncedo and Botha Taxi Associations in
Matatiele, Mount Fletcher, Maclear and Umtata in the Eastern
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Cape who spend a lot of money in the automotive industry, do
not benefit at all from this department. Even when these
associations ask for basic support, such as land for building
taxi ranks, they are not given land. Instead, they are being
harassed by traffic officers on a daily basis.
The same can be said regarding small businesses in the
Ezingolweni Township in Port Shepstone whose businesses were
burnt down during 2021 July unrest, and to date have not
received any intervention and businesses are still in ruins.
Small businesses are not only suffering in the automotive and
farming sectors, but in all other sectors as well. We found
the same to be true in construction, retail, textiles, and
hospitality industry.
This is disappointing to note for a Ministry which should have
had by now a very clear program on how to assist women, young
people and persons living with disabilities, especially those
who were deliberately excluded by the system, made to be
slaves for white masters for the entirety of their lives. This
is disappointing for a department which should have by now,
had a database of all young people who are interested in
starting their own businesses regardless of their political
affiliation.
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In almost all the so-called industrial zones, there is no
clear plan on how to deliberately push for women, youth and
people who are living with disabilities to play a role in
establishing their own businesses. It is only the few
connected, especially those who have links with the ruling
party who get funding and even that they do not get any proper
guidance on how to run their businesses. That is why you will
see them buying expensive cars and then their business within
no time they vanish. What is even worse is that the
government, especially municipalities, is the biggest culprit
that is killing small businesses. They accept services from
small businesses but do not pay them on time. A typical
example of that is that in November 2020, a small business
called Thomson Construction did work for Alfred Nzo District
Municipality, but they haven’t been paid up-to-date. They
haven’t received their money
We must close this department and make small business the
business of industrial policy. It is high time that we stop
this empty bragging about getting our people to actively
participate in business while we all know that there is
nothing the government is going to do to help young people and
people living with disabilities and women to start their
businesses. But we just make noise about that every time as if
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there is something the government is doing for them. The so-
called industrial zones must not be about a talk to get votes
during campaigns, but we must make it a point that we make
those industrial places functional and well running. All this
need divisive leadership which unfortunately we do not have in
this country.
Small businesses are a backbone of any economy growth. If this
country could actively push for more support for those who are
doing small businesses, this could play a great role in
reducing the unemployment rate, which is very high in this
country. Unfortunately, everything else which this government
does with everything that have a budget, it is simply meant
for enriching corrupt, those who are linked to the ANC and
individuals who are linked with the President. So, it does not
assist with anything, it’s just a talk every day that this is
what we are doing and in reality when you go to the ground
there is nothing happening. We therefore reject this budget.
Thank you very much, Chairperson.
Ms M L MOSHODI: Thanks very much, Deputy Chair, hon Minister,
Deputy Minister and hon members.
Setswana:
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Dumelang bagaetsho.
English:
Tomorrow, 25th May 2022, we will be celebrating the 59th
anniversary of the founding of the Organisation of African
Unity, OAU, which is now the African Union, AU. We are also
concluding the celebrations of our Workers’ Month. On this
occasion, I want to salute the mineworkers of Sibanye Gold
whose demand for R1000 monthly wage increase we believe is
fair, in the light of the CEO and shareholders who are
awarding themselves hundreds of millions of rand, thus further
widening the shocking inequality gap in our country. We also
pay tribute to the most vulnerable workers of our country, the
women and men who produce and sell food, clothing and other
items in markets, at street intersections and everywhere else
in order to put a warm plate of food on their tables.
They are our heroes and they deserve to be recognised. In
spite of their heroic efforts to earn an honest living, they
often become victims of harassment by Metro police,
particularly in DA-run cities like Cape Town and Johannesburg.
Hon Deputy Chair, we all agree that, COVID-19 pandemic, had a
damaging impact on small, medium and micro enterprises, SMMEs,
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and Co-operatives. Social?distancing restrictions and health?
and economic?driven demand shifts from the pandemic have
shuttered many small businesses and entrepreneurial ventures
across the country.
The July unrest and climate-related natural disasters have
added to the pain felt by millions of our people. Of course,
government and other charity initiatives have provided support
to millions of workers and families who lost their incomes and
homes, as well as companies that were in distress during all
these events. Hon Deputy Chair, these findings of losses to
small business activity have important implications for
government’s economic policy going forward. The Reconstruction
and Recovery Plan as well as the social compact that is being
finalised with social partners in NEDLAC have to talk to the
issues of income losses, current and future economic
inequality among the impacts brought about by the pandemic.
We have noted that Small Enterprise Finance Agency, Sefa, is
planning to put effort into implementing economic recovery
programmes, and continue to manage COVID?19 relief programmes
such as the SMME debt relief fund, the business growth,
resilience facility introduced in the previous financial year
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as well as the Back Support Scheme announced by National
Treasury on 26 April 2022. The Scheme announced by Treasury
will also help those businesses recovering from the July 2021
civil unrest in KwaZulu-Natal and Gauteng, as well as damage
caused by the floods. Sefa is planning to approve R6,3 billion
in finance over the period ahead for SMMEs and Co-operatives
and disburse R5,1 billion.
These relief measures demonstrate the caring character of the
ANC government, but they may not be enough given the scale of
the damage. The private sector, particularly the banking and
insurance industry, must put up funding in the form of low
interest-bearing loans and grants to match government’s
efforts. Without economic transformation, the economic
recovery path will be challenging in South Africa. Currently,
our biggest concern is unemployment, while growing levels of
poverty and inequality plague the country. The goal of
economic recovery and growth should be to broaden economic
ownership and inclusion. In this regard, the goal of public
policy, legislation and regulations must be to build economic
inclusion through transformation programs, particularly, in
strengthening inclusivity and transformation in the quality of
growth.
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Hon Deputy Chair, we must indeed celebrate the launch of the
Township and Rural Entrepreneurship Programme. TREP, which is
a necessary innovation by the Department. However, we believe
that national legislation that provides for the achievement of
these goals is necessary, as we have observed that a number of
provinces have taken initiatives on their own to enact
legislation to respond to the same challenges. The
contribution of SMMEs and co-operatives to the South African
economy is far below its potential.
Globally, the focus is on the sustainability of entrepreneurs
rather than the number of start-ups included in the ecosystem.
We urge the Department to step up efforts to encourage more
people to start businesses. But it is also important to
support programmes to replicate and scale up the production of
quality small businesses and co-operatives. We are excited
about the launch earlier this year of the Hustle Academy with
the support of the Department and global tech giant, Google,
who committed to help empower local entrepreneurs in a free
week-long boot camp.
In conclusion, hon Deputy Chairperson, we are also happy that
the department has focused on Master Plans, targeting the
manufacturing, agriculture, digital, automotive, and mining
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industries. These must focus on supporting real entrepreneurs
and not individuals who want to live rich lifestyles with
public funds and not reinvest in their own businesses and thus
grow our economy. Thank you very much, hon Deputy Chair, as
the ANC, we support Budget Vote No 36.
Setswana:
Ke a leboga.
Mr T A MOKONE (Limpopo): Hon Deputy Chairperson, hon Minister,
Stella Ndabeni-Abrahams, hon Minister Gwede Mantashe, hon
Deputy Ministers, hon House Chairperson of Committees and
Oversight, special guests and delegates and all esteemed
members, I am pleased to be given an opportunity to
participate in today’s debate on Budget Vote No 36 for the
Department of Small Business Development.
As the Limpopo government, we are aware that driving economic
reconstruction programme, Small, Micro and Medium Enterprises,
SMMEs should be at the top of our agenda. Our aim is to build
an all-inclusive economy. It is imposable to do so without
effectively, supporting the growth and sustainability of the
Small, Micro and Medium Enterprises.
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Two years ago, we made it clear that our postCOVID-19 in
rebuilding the economy will endeavour to ensure that no one is
left behind.
The Limpopo Executive Council approved the Limpopo Executive
Masterplan 2020-2030 which is encored on industrialisation
agenda for implementation. This plan shall change the
structure of the Limpopo economy.
The department in partnership with Department of Trade,
Industry and Competition, DTIC, will continue to strengthen
our investment in the Provincial Industrial Park. The aim here
is to transform these industrial hubs in Seshego and
Nkowankowa, into centres that will provide digital
transformation and innovation thus supporting a range of
complementary activities for youth.
Hon members, leader through Limpopo Connexion, finalised the
business plan for establishment and implementation of the
digital hub in Seshego and later in the year in Nkowankowa
Industrial Park to bolster digital training and job creation
for young people. Phase 1 of the Seshego Digital Hub will be
up and running in this 2022 financial year.
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The department has signed a Memorandum of Understanding, MoU,
with the Department of Trade, Industry and Competition. The
R23 million has been set aside to actualise the implementation
of the project in 2022-23 financial year.
Working with our partners, we intend to prioritise
infrastructure support for the development of street-level-
enterprise note for micro enterprise, industrial parks,
business parks and incubation hubs, consumer-owned and control
retail and wholesale stores.
Making land available around the township and rural space to
enable township and rural enterprises to operate. Rolling out
broadband infrastructure which is essential to support
township and rural economy and reduce the cost of connectivity
to the Internet and broadband communication channels.
Hon members, Limpopo has already secured partnership with the
private sector, to realise the objectives of the enterprise
and supplier development. Coca cola, Spar, Pick and Pay,
Exxaro, De Beers and many others, are on board as we now put
in motion as we now put the Economic Recovery programme.
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The department, in partnership with Coca Cola South Africa has
implemented Business-in-a-Box Programme. The programme has
provided infrastructure in the form of equipment to spaza
shops in the province. Twenty SMMEs benefitted from this
programme in the last financial year. We are now looking
forward to additional 50 SMMEs benefiting from this programme.
The department in partnership with SA Brewery, SAB, is further
training 50 youth SMMEs in our province who would ultimately
benefit from the Ditholwana Programme which will start in
September 2022.
In partnership with ABSA and Standard Bank, we will be
offering a programme on financial and nonfinancial support to
SMMEs to assist them to develop and sustain their businesses.
The implementation of the Socioeconomic and Recovery Plan
which is monitored by this department is in full swing, as
strategic interventions to deal with the impact of COVID-19
and resuscitate the provincial economy, in short, medium to
long-terms.
During the 2020-21 financial year, the provincial government
disbursed a total amount of R152 million, as COVID-19 Relief
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Fund in all sectors of our economy to assist the SMMEs and co-
operatives. This programme assisted in creating more than 600
jobs.
Hon Deputy Chairperson, the implementation of the Limpopo
Township and Village Economic Revitalisation Strategy is in
full swing. As a result, a total amount of R8,722 million was
disbursed through the national Spaza Shop Support Scheme to
benefit 1 243 registered spaza shops in Limpopo.
Again, 207 SMMEs and co-operatives, are currently
participating on Leadership Business Incubation Programme, of
which 63 SSMEs and 32 co-operatives are youth-owned
enterprises. Through this incubation programme we have been
able to sustain at least 279 and 690 job opportunities in
SMMEs and co-operatives spaces respectively.
In his state of the nation address, the President Mr Cyril
Ramaphosa made a call to government to redesign its loan
guarantee scheme that enable business to bounce back from the
COVID-19 impact.
Hon Deputy Chairperson, the President’s calls require us as a
provincial government to adjust the eligibility criteria to
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SMMEs and co-operatives financing strategies to encourage
greater uptake by small businesses. This call further requires
the provincial government to modernise its processes to enable
SMMEs, co-operatives and citizens to easily access government
services, for example lodging of business loan applications,
permit applications, etc, at the comfort of their homes
without travelling to government buildings.
As a result, during the 2021-22 financial year, we started a
process of developing a Permit Management System and Liquor
System, with the assistance of State Information Technology
Agency, Sita. We anticipate that the two mordernisation
projects would be completed in 2022-23 financial year for full
implementation.
During the course of 2021-22 financial year, the department
through the leader further supported 77 youth-owned
enterprises in Limpopo to access finance from different
development financing institutions. To crown in more support
to SMMEs and to co-operatives, leader extended its partnership
with Companies and Intellectual Property Commission to assist
the Limpopo-based enterprises to access various statutory
services. To date, 4 633 local enterprises were assisted to
access various Companies and Intellectual Property Commission,
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CIPC, services ranging from business registration, filling of
annual tax returns and so forth.
The Limpopo One Stop Shop will be officially launched before
March 2023. The total investment and intervention of the
recovery plan is valued at R170 billion. It is projected to
create over 48 000 job opportunities in the medium to long-
term.
Together with the Department of Small Business Development, we
will continue to work together to ensure the reduction of the
red tape in business sector for easy requirement of doing
business in the province.
In conclusion, as the Limpopo province we support the Budget
Vote No 36 as tabled by the Minister. We further affirm that
this budget, will go a long way in improving the livelihoods
of the economic mainstay of our country. I thank you, hon
Deputy Chairperson.
Afrikaans:
Mr S F DU TOIT: Agb Voorsitter, ...
English:
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... the purpose of this Vote is to promote the development of
small businesses and co-operatives that contribute to
inclusive economic growth and job creation. The mandate of
this vote goes further, and I quote: “The realisation of this
mandate will lead to a transformed economy, increased
employment and the reduction of poverty and inequality.”
Over the MTEF period, support to medium and micro enterprises,
SMME’s, is provided through an allocation of R2,6 billion to
the Small Enterprise Development Agency, Small Enterprise
Development Agency, to co-ordinate support nationally. But
what is the reality? I posed a question to the Minister to
Small Business Development, SBD, wanting to know how many
small, medium and micro enterprises have benefited from
government’s assistance since 1996 and what has been the
monetary value of the said funding? I wish to share the reply
by reading it verbatim, and I quote:
Due to unco-ordinated and fragmented support that included
public support institutions, there has not been composite data
that captures accurately the number of SMMEs supported,
especially tracking this back from 1996. The last few years
have seen several reviews and assessments of South Africa’s
public sector support programmes and strategies, prepared by
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public authorities and by independent researchers. However,
these studies have not been able to track a number of SMMEs
supported as a standalone variable, given the fragmented
nature of support that transcends across three spheres of
government.
The overall budget for the support varies across various
government institutions. The Development Finance Institutions
Review in 2008 captured a figure of R120 billion of total
assets. However, only 50% of these assets were dedicated to
developmental funding and investment. The department is able
to accurately account for financial support provided by the
entity that reports to the Minister of Small Business
Development, which is the Small Enterprise Finance Agency,
Sefa. Since Sefa’s establishment in 2012, the institution has
supported a total of 478 340 SMMEs and co-operatives to the
tune of R9,7 billion and facilitating 629 799 jobs. From 2016
to 2018 alone, the department through its grant funding
invested R2,5 billion on incentives programme to SMMEs and co-
operatives and these grant instruments have since been
reviewed and are delivered through Sefa as blended funding.
However, once again the lack of co-ordinated development
finance services portrays a skewed picture wherein DSBD can
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only account for the Development Finance Institution, DFI,
reporting under its authority. There are accelerated efforts
to consolidate and merge some of the institutions to enhance
their support services and consolidated reporting.
Afrikaans:
Dit is dus duidelik dat die departement daarop toegespits is
om die ekonomie te transformer eerder as uit te brei, deur hul
fokus op aanvanklike ondersteuning aan sogenaamde voorheen
benadeelde kandidate te plaas. Fondse word ongekoordineerd
spandeer, sonder om die vordering of sukses van die besighede
te monitor. Julle deel net geld uit.
Dit laat die moontlikheid dat dieselfde begunstigdes, as
gevolg hiervan, by meer as een inisiatief befondsing kan kry,
of hul nou ’n sukses daarvan maak of nie.
Die huidige bemagtigingsmodel wat deur die regering toegepas
word, ontneem sommige belowende entreperneurs op grond van
ras, van die geleentheid om tot die staatskas by te dra.
Die regering moet sy rasbehepte transformasiebeleide skrap en
eerder op sosiale koësie en die uitbreiding van die ekonomie
fokus. In die bogenoemde antwoorde van die Minister word erken
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dat die inisiatiewe nie werk nie, dat geld spandeer word
sonder dat die nodige suksesse bespeur word. Dankie.
Ms H S BOSHOFF: Hon Deputy Chair, today we are debating small
business development, but looking at the unemployment
statistics, the figures have sky rocketed, and it is clear
that the governing party has failed in creating a conducive
environment for job creation and for businesses to flourish.
To top it all off, we have now been made aware of the
governing party, or should I say the poverty Cabinet, wanting
to donate R350 million to Cuba. This is a slap in the face of
the small business sector as this money should rather be spent
on capacitating small businesses who in turn could assist in
curbing the unemployment statistics. The amount of money
flowing to Cuba is of grave concern to the DA and the matter
should be analysed as not only is this government wanting to
give money to Cuba, it has recently been discovered that since
2018, the ANC has loaned an amount of R147 631 000 to Cuba as
well. I can only imagine what this amount could have meant for
the small business sector who is trying to keep afloat in
light of the mismanagement of Covid-19 pandemic funds, the
continuous years of state capture, and the looting and
corruption, which is carrying on unabated. It would appear as
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if Cuba is our 10th province and more is being done for them
than for the destitute in our own country.
Hon Minister, what is of concern is that in the past and
currently, rural and township communities have discussed with
us, as we do oversight, that there is a lack of programmes
emanating from this department to support SMME’s in these
under serviced areas. Complaints have also been received that
little to no communication on the availability of funds for
them is received. This matter must be addressed with the
urgency it deserves.
In his Sona debate, the President announced the establishment
of a Red Tape Unit to look into the problems faced by this
sector. This, we welcome, hon members, but had he only acted
against his members who during the Fifth Parliament, rejected
the Red Tape Reduction Bill and the Ease of Doing Business
Bill in the Sixth Parliament, as tabled by the DA in the NA,
we could have seen cost cutting and the relief of burdens that
are carried by small business much earlier. It appears as if
government does not realise the importance of SMME’s in
building a reliable economic environment.
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In view of the establishment of this Red Tape Unit, we need
now to see what plans they have to utilise their powers and
functions, to free small businesses from the snares of red
tape. We cannot allow for this unit to be established, which
we all know will be an extra cost to the tax payer as these
employees need to be remunerated, and no feedback is
forthcoming. The President needs to enlighten the sector as to
what the unit’s mandate will be and who will have oversight on
this unit, to ensure that the functions of this unit are
executed appropriately and within the time frames given.
Hon Minister, we and the country are aware that South Africa’s
debt stands at a whopping R3 trillion rand and if environments
are not created for small businesses to flourish, to
contribute to the fiscus, this debt will never be eradicated.
It will continue growing with a ripple effect on the
unemployed and the poor.
In conclusion, we are all aware that the hon Minister is not
new to controversy and I therefore call upon her to be more
considerate when spending taxpayers’ money on accommodation,
etc, as alleged by a media release on 18 May 2022, and rather
ensure that it is spent on building a sustainable small
business development environment. I thank you.
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Mr N M HADEBE: Hon Chairperson, hon Minister, hon members,
small business in South Africa is a major driver for economic
growth and addressing unemployment. For this to flourish,
there needs to be a committed and innovative government, one
that understands the needs and challenges of the people.
According to small matters, a 2019 study by the International
Labour Organisation, which included data from South Africa,
and I quote: “In almost all of the 99 countries in this
sample, the self-employed and micro and small enterprises,
small economic units make up more than two thirds of
employment.” This means that government has clear data that
must inform the ways it reprioritises the needs to focus on
additional and effective support to small businesses.
While we are not saying that the government must become a
specialist in all sectors of business, there must be baselines
support and accountability mechanisms that government works
with, to achieve small businesses.
Small businesses do not have the access to the capital
expenditure that the larger ones have and thus, are solely
reliant on services that government provides to keep its doors
open and its operating going.
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Many small business owners are struggling to operate their ...
[Inaudible.] ... operations and manage downtown due to the
frequent electrical cuts by Eskom. It is also unreasonable for
them to return to burning fossils, fuel for electricity
generation, given the sharp and continued increase of these
commodities.
The very problem with load shedding, amongst many others, is
that it is an antidevelopment and antismall business ...
[Inaudible.] ... This department with this in mind must find
solutions of providing capacity to small businesses. This
requires a proactive approach from government to identify and
receive help from local and small business owners, to access
the relevant relief packages and stimulus available to address
the impediments that they are facing.
The lack of attention paid to capacitating and consulting
small businesses, together with the destructive unrest in
KwaZulu-Natal and Gauteng has further set back any progress of
business development in South Africa. According to the South
African Special Risk Insurance Association, the damage in
July’s looting and mayhem, the most expensive riots in the
world, cost more than R50 billion. This was followed by yet
more devastation in 2022 with the flooding in KwaZulu-Natal
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and the Eastern Cape. Not only lives were lost, but businesses
and livelihoods destroyed.
Therefore, the budget allocated to the Department of Small
Business Development must work harder to reach beneficiaries
in the most effective ways. There is no more feint in our
country’s GDP to allow for irregular, fruitless and wasteful
expenditure. There is no room to create excuses for comrades
who have been involved in corruption, maladministration, while
people do not know if they will see tomorrow, as starvation
intersects.
In closing, this department needs to be more on the ground,
especially at our disaster-struck provinces to work with
businesses in a friendly and welcoming approach, to achieve
its mandate and help take the destroyed businesses in the
successful and job creation entities. I therefore, with the
above, wish to state that the IFP wishes to support the Budget
Vote.
Cllr D DE VOS (SALGA): Chairperson of the National Council of
Provinces, Mr Amos Masondo, hon Members of the National
Council of Provinces, Ministers and Deputy Ministers,
distinguished guests, I greet you all, the Companies and
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Intellectual Property Commission, CIPC, reported that a record
510 000 companies were registered in 2020, a 32% leap over the
385 000 new companies registered in 2019. A similar increase
in new company registrations took place during the 2008-09
global financial crisis. This trend leads us to one
conclusion: there is a large number of people forming
companies out of distress and economic necessity. Much like
with the 2008 crisis, COVID resulted in many people losing
their jobs or finding themselves working reduced hours or
doing part time work. In response, they naturally resorted to
starting their own businesses in order to earn an income.
Hon Chair, I am prefacing my response with this reality in
order to demonstrate the enormity of the task that lies ahead
for us as leaders. The vast majority of people who opened
their small businesses due to the effect of COVID-19 did so
with nothing but their will and tenacity. They do not have the
financial means nor the requisite infrastructure to start and
run a successful business. The majority of them are destitute
and disenfranchised. They have pinned their hopes on
government, to provide the necessary support to enable them to
grow and thrive. As leaders, we carry on our shoulders the
hopes and aspirations of many of these small businesses.
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I would therefore like to commend the Minister of Small
Business Development, Hon Stella Ndabeni-Abrahams for tabling
a budget vote that proportionally responds to the realities of
today. As local government, our mandate in relation to
economic development is that of being an enabler and a
facilitator, and it gives me great pleasure to inform the
house that we have managed to build a solid relationship with
the Department of Small Business Development, including its
entities, in the course of executing of our respective
mandates. Allow me to start with the work we’re collaborating
on in the domain of:
The creation and promotion of an enabling environment for
business is fundamental to a competitive and vibrant economy.
The amount of red tape and bureaucracy faced by business when
dealing with government is considered a key constraint to
economic development and growth. In partnership with the DSBD
and other stakeholders, we are supporting the
institutionalisation of the Guidelines on Red Tape Reduction
in municipalities, with a focus on streamlining and
simplifying business processes. We are also working with other
role players to review cumbersome and counter-intuitive
Municipal ByLaws that inadvertently reinforce red tape. We are
acutely aware of the enormous cost of red tape to investment,
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and by extension, economic growth and job creation, which is
why we will spare no effort in undoing it.
Following the successful completion of our Municipal Trade and
Investment Guidelines project, which also included in-dept
engagements with a sample of municipalities across the
different categories, we are now setting our sights on
developing a “model” municipal investment profile which,
amongst the many envisaged outcomes, will produce a typical
best practice investment profile ideal for a South African
municipality, taking into cognisance the different categories
and local dynamics in each municipality. The municipal
profiles are designed for potential investors to facilitate
the implementation of local investment projects and contribute
to the creation of new jobs, the growth of local incomes, and
the sustainable development of the local economy. It is
anticipated that through the design of municipal investment
profiles, municipalities will be able to improve the
investment-readiness of key local projects and develop
compelling propositions to make them more attractive to
external investment.
The Salga has completed a sub-regional study on the Ease of
Doing Business which has, amongst its main outputs, identified
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key push and pull factors that either facilitate or hinder
investment. With respect to the pull factors, effective
service delivery and efficient applications processes are
amongst the key indicators that are critical in facilitating
investment. On the other side of the spectrum, push factors
such as poor infrastructure, crime and corruption, and poor
service delivery as seen as detrimental to investment. The
Salga is using these findings to develop a competitive index
for municipalities, which will essentially be a ranking based
on the pre-determined set of ease of doing business
indicators. The index will then serve as a point of reference
and benchmark for our support programme and will put a
spotlight on those municipalities that are further down the
index.
Hon Chair, we can draw valuable lessons from the world’s top
performing economies, where competitiveness has become the
mainstay of economic policy making. In recent years, there
has also been an increasing emphasis on framing
competitiveness from a subnational level; that is, at regional
and city levels. In a number of these economies, the regional
or city competitiveness strategies have become an important
predicate for national competitiveness and performance. The
municipal competitive index will thus enable our
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municipalities to measure themselves against one another using
a tried a tested methodology, and this will in turn put them
in good stead to identify their shortcomings and leverage
their strengths.
Hon Chair, there is a need for a more conscious and concerted
effort to use procurement as a lever to recalibrate the local
economy through targeted and preferential procurement that
favours SMMEs. Municipalities can and should re-direct their
enormous spending power to disproportionately focus on
injecting life into the small businesses operating within
their respective jurisdictions.
In giving further impetus to this initiative, we have entered
into an MOU with one of the entities of the Department; that
is, the Small Enterprise Development Agency, Seda. One of the
flagship initiatives coming out if the MOU is the capacity
building programme for LED practitioners and SMMEs, delivered
through SEDAs Learning Academy. To this end, a (4) day
training of practitioners from the OR Tambo District was
conducted from 22-24 March 2022. The training, attended by the
District and all its local municipalities, sought to
capacitate officials on the training course: Tender to secure
business. The course is designed for SMMEs who engage in
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tendering as a means to secure business (particularly from
government entities). It is aimed at assisting SMMEs to:
• Identify information sources available to them
• Analyze tender documents for viability
• Calculate costs, revenue and profits when preparing a
tender;
• Complete tender documentation
We will continue to rollout more initiatives targeted at SMMEs
in line with the MOU implementation plan.
On Export promotion
Honourable Chair, SALGA has set out to use the African
Continental Free Trade Area (AfCFTA) as a vehicle for
supporting SMMEs to expand to other markets beyond our shores
to the far reaches of the African continent. This endeavour
also seeks to position local government to stay ahead of the
curve with respect to the implications of the AfCFTA on the
sector. To this end, SALGA convened the first Local
Government Dialogue on the AfCTA from 16-17 March 2022. This
was done in partnership with the AfCFTA Secretariat, UCLG
Africa, and Afreximbank. Amongst the many objectives, the
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Dialogue was aimed at putting municipalities in pole position
to fully exploit the myriad of opportunities that will be
precipitated by the AfCFTA.
SALGA also brought thought leaders to dissect the following
thematic areas in relation to the AfCFTA:
• The envisaged role of LG in the AfCFTA
• Special Economic Zones (SEZs) as the epicentre and
catalyst for a successful AfCFTA
• Innovative infrastructure financing instruments –
unlocking infrastructure financing for a successful
AfCFTA;
• Facilitating cross-border trade, investments, networks,
and free movement in pursuit of an integrated African
market
Hon Chair, the road to economic recovery will be long and
hard, fraught with pitfalls along the way. Throughout this
journey, local government will serve as a beacon, a point of
reference, as we navigate this unchartered terrain journey. As
a sector, we are uniquely positioned as a frontline sphere and
a chief catalyst for economic development, and with this we
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carry on our shoulders the hopes and aspirations of millions
of South Africans. The District based economic recovery plan,
which is pivoted on the 44 Districts and 8 Metros, is
testament to the centrality of local government in the
country’s economic future. From the onset, Salga has always
supported the District Delivery Model as it is our firm belief
that District and Metro spaces offer the appropriate scale and
arena for intergovernmental planning coordination. That being
said, we implore that all District Plans be synchronised with
Integrated Development Plans of municipalities, and this is of
particular significance as IDP processes are subjected to a
vigorous public participation process, and as such, they
reflect the needs of communities.
Hon Chair, it is now common knowledge that the COVID-19
pandemic has obliterated the job market, and there is a
dreadful possibility that some of those jobs may never be
recovered. As a result, we are witnessing an exponential
growth of the informal economy as more people seek means to
earn a living. In response, Salga has developed the Public
Space Trading Guidelines to serve as a tool that
municipalities can use as a point of reference when developing
their Informal Trading Bylaws. The informal sector, and small
businesses in general, will continue to grow in leaps and
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bounds, and it is important that municipalities are ahead of
the curve with respect to policy responses. Salga will
continue to support municipalities to review their bylaws as
to ensure that they are business friendly, fit for purpose,
and in the process remove the shackles of over regulation that
have for so long paralysed small businesses. The ongoing
review of the Businesses Act offers all of us a window of
opportunity to counter the crippling effect of red tape,
especially on small businesses that do not have the means to
bear the often-high cost of compliance. We will therefore be
bringing the Public Space Trading Guidelines to the table
during the review process as our own contribution in shaping
what should be a more enabling and responsive new version of
the Businesses Act. All in all, Salga wishes to express its
support to the department’s proposal for the development of
national norms and standards to deal with business licensing.
At the height of COVID-19, when we were working with the
Department on relief support for SMMEs, it came to light that
some municipalities lacked basic systems and processes for
business licensing. So, the review of the Businesses Act could
not have come at a better time, and Salga will be bringing
forth its own experiences and learnings to radically enhance
the new version of the Act.
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Hon Chairperson never before has there been a greater
obligation on all of us to support the small business
community. If we are to turn around our economic fortunes, we
need a robust SMME sector that is able to perform at the apex
of its potential, unencumbered by red tape and over
regulation. I’m certain that through partnerships, mutual
cooperation, and IGR, we will realise our shared vision of a
thriving small business community that is at the heart of our
economic reconstruction and recovery efforts. And with that, I
thank you.
Mr T J BRAUTESETH: Hon Chairperson, hon members, and hon
Minister, Small businesses should be the engine of economic
growth that South Africa needs to bring down unemployment, and
it therefore becomes critical that government creates an
environment for SMMEs to thrive. But Chairperson, the simple
reality is that for small businesses to really thrive, they
need a growing economy, a stable power grid, a well maintained
transport infrastructure, protection of citizens and their
place of employment by a functioning police force and capable
state, run by capable officials who have no political ties and
were not cadre deployed.
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The sad reality is that with the current government we will
have unreliable power, criminals protected by politicians,
failing infrastructure and increasingly dysfunctional police.
The result will be increased inequality and poverty.
Global Entrepreneurship Monitor measures the Total Early-stage
Entrepreneurial Activity in South Africa at a low level of
17,49%. Five out of seven new small businesses fail in the
first year. A study in 2017 concluded that only 10% of adults
intend to start their own business. We only need to look as
far as the Minister to see the problem.
Minister Ndabeni Abrahams is synonymous with flaunting wealth,
flouting COVID rules, dancing next to new BMWs and running up
astronomical bills on accommodation and catering. This all
contributes to the bubble in which she lives, totally
disconnected from the hardship from running a small business
in South Africa.
She also shows her disregard by only attending the tiniest
portion of portfolio committee meetings, with her attendance
sitting around 20% Minister of Small Business Discouragement -
Ndabeni-Abrahams was boasting about how many small businesses
she intends to shut down due to regulatory non-compliance. She
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was quite happy to do this during the COVID pandemic as she
placed BBBEE ideology before helping businesses survive based
only on her sycophantic obsession with the racial makeup of
business creating employment.
And the President has little faith in the Minister as well –
he has moved the Red Tape Reduction Unit, her job, to the
Presidency.
If South Africa was a business, we would surely need new
management. The voters of South Africa are the shareholders of
this business and they need to fire the ANC board in 2024 and
replace them with DA directors that have a proven, successful
management track record. This will be the final chance to
create employment and wealth in our country before it is too
late. I thank you.
Mr M DANGOR: Deputy Chairperson, may I switch off my video?
The DEPUTY CHAIRPERSON OF THE NCOP (Ms S E Lucas): You are
handsome enough, you can leave it on. Unless you have a
problem. [Laughter.]
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Mr M DANGOR: Deputy Chairperson, Minister, Deputy Minister,
colleagues and fellow South Africans, inflation and interest
rates that are rising to historic levels are the two main
headlines in our daily market news reports on television and
radio. As we observe world-wide food shortages and possible
famine in some parts of the world, is it not a truism to admit
that we are heading for economic challenges, perhaps
depression.
Some hon Members of Parliament from minority opposition
parties, have come out and shown us that their hearts are
bleeding for Europe, rather than Africa, South Africa or the
rest of the world. This was aptly demonstrated by the leader
of the DA who recently went on what can be characterised as a
war tourism visit to Ukraine, rather than focusing on solving
problems in this country and this continent. I don’t know if
he knows where Libya is, when it started. Also NATO has a
problem. That the uprising in Libya was a NATO uprising led by
some Libyans. There are problems in Sudan. There are problems
in South Sudan. There are problems in West Africa with the
French ... [Inaudible.] ... but no visits there. Only to
Europe because they blinded ... [Inaudible.] ... as some of
those reporters have been reporting.
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Indeed, when businesses – big and small – were hit by the
impact of COVID-19, everybody became patriotic and understood
why we have a government. The President and government
departments and entities were asked to provide rescue packages
to companies and to support workers in distress. But as soon
as the recovery began, that solidarity has vanished. Many
large companies went back to their old habits of stifling
competition and economic transformation.
Now, we are facing a new challenge and if trends in North
America and Europe continue, a global economic crisis on the
scale of COVID-19 pandemic and the 2008 global recession which
started in countries in the Global North, is coming. Some
economists have started reporting that North America and
Europe are experiencing a phenomenon called stagflation –
which is a double whammy that of inflation and the question of
an economy that is slowing down.
Economists tell us that if inflation is high, the cost of
making products rises. This means domestic products may become
more expensive than foreign ones, and may also affect exports.
People on fixed incomes or tight budgets will spend less of
their earned wages and give them less spending power. Economic
uncertainty or instability causes investors, business owners
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and consumers to be cautious and less likely to spend money.
All of these could lead to a downward spiral that will be
difficult to reverse.
Higher inflation and higher interest rates mean that it is
more expensive to acquire a loan and as we know, this does not
bode well for small businesses. In fact, it is bad for big
businesses as well, especially for those that wish to expand
their operations. Statistics South Africa reports that the
combined effect of the severe drought and the depreciation of
the rand in recent months have driven annual food inflation to
9,8% in March this year. It is a highest level in four years.
In times of high food inflation, the poor experience of higher
overall inflation than the average consumer and inflation of
the poor’s food basket increases more rapidly than that of all
other groups.
So, what are we to do as a nation about these multiple crises,
many of which are not of our own making? As a movement, we can
do an introspection, and look at our problems. Some people
have not done introspection since 1652, on some April there,
when all the problems in this country began and to repair for
after 25 years what has taken more than 400 years to mess up
is ... [Inaudible.] ... ... job. So I think hon Londt and ho
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Du Toit should admit to that and say we had this problem from
1652 up until years ago. We didn’t repair it then. We need to
assist now, coming together as patriots, trying to repair what
was damaged from then.
The Department of Small Business Development has been
criticised in the past for underspending while thousands of
small, medium and micro-enterprises, SMMEs and co-operatives
around the country needed funding. However, we must commend
the department for making strides to get its agencies working
to support small businesses and coops in the 2022-23. Minister
Ndabeni-Abrahams has pledged that the department will make
better funding opportunities available for small and medium
enterprises in her department’s budget going forward and, more
importantly, making access to these support systems easier for
the vast majority of people who need them.
We welcome the commitment by the department to leverage the
R500 million Innovation Fund. The R416 million allocated over
the medium term to sector and market development within the
department in order to extend access to business development
services and support infrastructure is a critical development.
The Minister’s pledge to upscale support to incubation hubs
and digital hubs, and roll out business support infrastructure
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to townships and rural areas have been demands of the Members
of Parliament and our constituencies for a long time.
The R953 million that is earmarked to be spent through the
Township and Rural Enterprise Programme targeting 24,000
township and rural enterprises is a step in the right
direction. We need to take lessons from this initiative and,
if it proves to be successful as we expect it will be; it must
serve as an example for the whole of government on how to
scale up programmes that benefit the many rather than the few.
The potential game-changer in this Vote 36 this year is the
commitment to ramp up support for the manufacturing sector
through a focused Import Programme to strengthen the country’s
industrial base. This is important for the overall development
of innovation and skills in our economy and improving our
capacity to produce our consumer goods locally. I wish the
educational institutions in our country could work closely
with the department to ensure that the necessary training and
skilling are provided particularly for the youth so that they
start their own businesses, learn and grow the new industries
of the future.
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The department’s plan to introduce targeted loan programmes to
promote financial inclusion, and strengthen focus on
enterprises owned by youth, women, people with disabilities,
and those based in townships are important interventions.
Equally, the plan to strengthen the capacity of the
microfinance division, and address dependence on only two
microfinance intermediaries must be pursued with vigour.
We must support the department and its entities in their
commitment to invest and build a sustainable black-owned
financial intermediary base. In building and stimulating
entrepreneurship and growth of the SMME and cooperatives
sector, the ongoing initiatives of the department to cut red
tape and the appointment of Mr Nkosi by the President will
hopefully bring relief to small business owners.
Many of our people have shared with us how they have struggled
to keep up with all the bureaucratic and administrative
processes they have to go through in order to comply with our
government’s many regulations. As the capacity of the
department grows, we call on the Minister to be more
ambitious. The merger of Small Enterprise Development Agency,
SEDA, the Small Enterprise Finance Agency, SEFA and the
Cooperative Banks Development Agency, CBDA must help to
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unleash co-operatives movement that will enable coops to grow
into large businesses like the Co-operative Bank of Kenya and
the coops in the region of Mondragon in Spain where coops have
annual revenues of billions of Euros. We are concerned that
SEFA in the previous financial year failed to lend money to
small enterprises through Co-operative Financial Institutions,
CFI. We would like to see stronger collaboration with key
participants in the public sector and donors, as well as
stronger sectoral research and knowledge management
capabilities in SEFA to utilise the ...
In conclusion, we need a national piece of legislation to
regulate SMMEs co-operatives and informal traders who bear the
brunt of diverse municipal by-laws around the country.
Currently, each municipality and provincial department crafts
its own laws. The fragmentation and lack of uniformity may be
costing the fiscus billions of rands. We call on the
department to fast-track tabling of the Business Amendment
Bill earlier than 2025, the President mentioned it in his
state of the nation address.
Therefore, it is urgent and appeal to the department to
respond accordingly. To give meaning to the President’s call
for a new social compact, we must urge the department to
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continue actively pursuing partnerships with the private
sector, civil society, women and youth led businesses, and
organised labour in order to define its role in the fight
against the scourge of unemployment, reducing poverty and
inequality in our country. Just to repeat again, we as a
movement, had the courage to introspect. We will look at
ourselves and that doesn’t mean we agree with you. We have
different policy. Our policy is pro-poor. Our policy is to
right the wrong of the past. [Interjections.]
Mr J J LONDT: Your other policy is to steal from the poor.
Mr M DANGOR: Other policy is to defend what happened since
April day in 1652.
The DEPUTY CHAIRPERSON (Ms S E Lucas): Order, hon Londt!
Mr M DANGOR: Thank you very much.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much
hon Chairperson. We do note the comments made by ...
[Interjections.] We do appreciate the suggestions and positive
feedback from members across the spectrum. We are of course
encouraged particularly by what has been said by the MECs of
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SA Local Government Association, Salga as we can only execute
our work and programmes in their provincial spaces, and in
partnership with their departments and municipalities.
As we had indicated, we have been to eight provinces already
listening to our stakeholders, while also take notes of the
inputs made by the select committee. We intend continuing with
these engagements and partnerships. Through listening, we can
improve and enhance our service offering. Hon Chair, this I
would say, probably some have had the memories of escaping
them because they are busy focusing on things that do not
matter in the area of responsibility.
Earlier on when I delivered the Budget Vote speech, I
mentioned that 89% of the total budget for this financial year
is going to programmes of the department. But of course we do
find those that cheap politic by saying we are only taking the
budget, the budget for salaries. It means again, somebody was
sleeping on the job, because they are busy surfing the net for
gossip. Others have claimed that the department since its
establishment has not performed.
Hon Chairperson and other members with your permission, I
would like to bring to the attention of the members that, it
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is not ethical to come and mislead the house, especially the
public of South Africa. In 2017-18, we spent 98% of the budget
as this department. In 2018-19, we spent 95% of the budget. In
2019-20, we spent 98%. In 2020-21, we spent 99% and right now
we are still finalizing for auditing purposes, but we are over
99%.
Now for any hon member who comes to the House without having
prepared whatever controversy that they are looking at, would
have at least done the research as we expected hon members to
do so, so that they can participate meaningfully in the
contribution towards the Small Business Development and not
come and put lies in front of everyone that is here.
Of course hon members, we are forging ahead with the merger of
our entities and in the process to ensure that the SMMEs is
are provided with a one stop shop platform to deal with their
requirements. These again requires all of us to join hands
what because as we understand that there is a need for the
review of the legislative framework, which is going to also
require the contribution and support by the hon members that
are so committed towards that Small Business Development. We
are looking forward to working with you in fast-tracking that
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Bill that we are going to present sooner in ensuring that our
small businesses can finally see the light.
The hon member that make reference to the 1996, if we were to
give account of what contribution have we made, unfortunately,
in 1996 we did not have this department and of course, we also
did not have even the Small Enterprise Finance Agency, Sefa
that you are talking about. But of course, we can take pride
in the fact that since the inception of Sefa in 2012, there is
a lot that has been done, including funding 478 340 SMMEs and
corporations, disbursing R9,7 billion. Chair, I can go on and
on if time was allowing.
We are looking forward to future engagements with hon members,
as the NCOP and the various provinces. We will endeavour to
talk less and do more in changing our SMMEs landscape, deploy
mechanisms to ensure sustainability of our informal and small
enterprises, including corporatives. We are going to ensure
that we create livelihoods for our youth in townships and
villages, and facilitate opportunities for women-led
businesses. We are doing this, looking at the state of the
economy in our country, addressing the injustices of the past,
that saw many of our people are being excluded.
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Therefore, it cannot be by mistake that whilst we are
inclusive in approach, but we are focusing on those that have
been excluded. It is the right thing to do for any person who
is fair, that indeed democracy must prevail and let the right
people enjoy the benefits that our forebears fought for.
Indeed, as the beneficiaries, we cannot fail them. Our
responsibility is to make sure that, we deliver economic
freedom as things stand. Thank you hon Chair.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms S E Lucas): Thank you
hon Minister. Thank you MaFaku. That concludes the debate. Let
me thank the Ministers, the Deputy Ministers, MECs from
provinces, Salga Representatives, permanent and special
delegates and all of you that participated in this debate
today. That concludes the business of the day and the House
stands adjourned. Thank you and good night.
Debate concluded.
The Council adjourned at 18:52
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