Reply:

1. The Department of Small Business Development (DSBD) is aware of the interview of the Chief Executive Officer (CEO) of the North West Chamber of Commerce, and has researched for this study, but to no avail. The DSBD nonetheless note that there is a high number of foreign owned informal and small businesses but unfortunately there is no definite statistics in this regard.

Section 15 of the Immigration Act of 2011 provides for the Minister of Trade and Industry to stipulate the minimal financial and capital contribution or investment required for a Business Visa which as off 2014 has been set at R5million. The Department is of the firm view that this requirement does regulate and manage the entry and participation of foreign nationals in the small business sector. It seems that many foreign owned small businesses are operated by foreign nationals who have applied or secured Refugee or Asylum seeker status, rather that foreign nationals who have secured a business visa. The DSBD perspective is that the Refugee and Asylum seeker system has been heavily abused and corrupted with many economic migrants claiming refugee status. In this regard, the DSBD has engaged and supported the Minister of Home Affairs in his efforts to clamp down on corruption and abuse of our immigration laws.

The Immigration Act of 2011 also provides for designation of sectors that are undesirable for a business visa – meaning that while a foreign national may get a business visa – they may not engage in the sectors that have been designated as undesirable for a business visa. The following business undertakings are currently listed under the regulation or directive of the noted Act as undesirable:

• List of undesirable business undertakings in relation to an application for Business Visa [Section 15(1A)]

• 1. Business that imports second hand motor vehicles into the Republic of South Africa for the purpose of exporting to other markets outside the Republic of South Africa.
  2. The exotic entertainment industry.
  3. Security industry.

• List of undesirable business undertakings in relation to an application for a Corporate Visa [Section 21(1A)]

1. Exotic entertainment.
2. Hospitality industry.
3. Fast food outlets and franchises.
4. Cosmetic and beauty industry.

The DSBD has also been made aware that some South Africans are fronting on behalf of foreign nationals when applying for these work permits, which are then handed over to the foreign nationals upon approval.

The DSBD is currently reviewing the Businesses Act no.71 of 1991 with the intention of introducing provisions that will be aligned to the Immigration and provide for further powers to the Minister of Small Business Development in regulating the entry of foreign nationals to the small business sector; as well as better protections for South African informal traders including spaza shops.

Furthermore, the DSBD is mindful of the extent to which South Africa SMMEs are disadvantaged by the encroachment of foreign owned business. It is for this reason, that the DSBD is supporting the SMMEs especially the micro and informal enterprise through financial and non-financial programmes such as Informal Micro Enterprises Development Programme (IMEDP). To make these South African businesses more competitive, IMEDP provides appropriate tools and equipment to business (spaza shops, hair salons, garden services etc.) and the support is in a form of a grant.

2. DSBD has implemented the support to the SMMEs and Co-operatives that were affected by the Covid 19 through the Debt Relief Fund and Township and Rural Enterprise Programme (TREP). In this regard, DSBD spent an amount of R500m to support Covid affected SMMEs. Regarding tax relief National Treasury as the custodian of tax policy has also implemented tax relief to all business affected by Covid 19.

3. State contract and tenders are regulated by Preferential Procurement Framework and PFMA to ensure their implementation and remove corruption in the process.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The department’s policies are guided by the African National Congress’ (ANC) policy resolutions, being the majority party in Parliament, having consulted broadly with all critical stakeholders.

The National Small Enterprise Act, 1996 (No. 102 of 1996) as amended defines the National Small Business Support Strategy (NSBSS) as the national policy in respect of small enterprise support and includes the policy as stated in the White Paper on National Strategy for the Development and Promotion of Small Business in South Africa.

The Department of Small Business Development (DSBD) was guided by the Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises (ISPESE) from 2005 – 2014 as an iteration of the NSBSS. Currently the DSBD is in the process of developing the National Integrated Small Enterprise Development (NISED) Masterplan, which will be the third iteration of the NSBSS. The draft NISED Masterplan as a national strategy on small enterprise development gives provision for further policy levers, such as, the Localization Policy Framework, Incubation and Business Development Services Policy, SMME and Co-operatives Funding Policy and the Red Tape Reduction. These policy levers have further been and continue to be consulted and engaged on in different public forums.

The NISED Masterplan was consulted and engaged on in public forums in the 2020/2021 financial year, the Economic Sectors, Investment, Employment, and Infrastructure Development (ESIEID) Cluster and Cabinet Committee in the 2021/2022 financial year.

The Department led a Stakeholder consultation session – Small Enterprise and Cooperatives Policy Dialogue on 4-5 August as means of sharing and consolidating inputs to the NISED Masterplan and being a launchpad to the planned Annual National Small Enterprise and Cooperatives Summit during the entrepreneurship month in November.

In addition, the NISED Masterplan was published in the Gazette for public comment for a 30-day period from 10 May 2022. Furthermore, the NISED Masterplan was submitted and presented to the Trade and Industry Chamber of the National Economic Development and Labour Council (NEDLAC), as part of engaging Social Partners (Labour, Business, Government and Community) on the 25 August 2022. The NISED Masterplan will further be presented to the SMME Workstream at NEDLAC.

Consultation is a key part of any policy development process and all DSBD policy development processes have been observed under public consultation, engagement, and negotiation, particularly with key role players such as small, medium, and micro enterprises (SMMEs) as well as co-operatives and with private sector representatives.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Department de-coupled the Business Recovery Process from the requirement for a business license or Permit. Our pronouncement on this is contained in the Business Recovery Programme. Our relief assistance focused on ensuring that SMMEs both formal and informal accessed the funds speedily, but that non-financial support was available including assistance with all compliance requirements.

Notwithstanding the above, the Department of Small Business Development (DSBD) has engaged the South African Local Government Association (SALGA) to assist with supporting municipalities to streamline the process of issuing permits to street vendors. This process is currently ongoing. The DSBD is also reviewing the Businesses Act no.71 of 1991 with the intention of amending the legislation to provide for norms and standards, a common business licensing framework and better protection for informal traders. The proposed amendments would also include proposed provisions for the Minister to issue regulations and directives necessary for the effective implementation of the Act. The process by SALGA is expected to be initiated and implemented during the current financial year.

The processes outlined above are ongoing as of end-September 2022. DSBD and SALGA are continuing to align all processes that will lead to a streamlined implementation process. Further updates will be availed once consultation processes involving Informal Trader organisations, SALGA, municipalities and other relevant roleplayers has been concluded. Related processes such as the reviewing of Municipal Red Tape and improving the ease of doing business are proceeding in parallel and in anticipated outcome of the afore-mentioned initiatives.

The Informal Traders Support Program provided 4 844 informal traders with grants of R3 500. There are currently a further 7 000 clients in the pipeline and it is anticipated that these traders would be funded by the end of the year. Working through Seda and supported by Informal Trader’s Association and Local Municipalities, the DSBD is able to channel those that have been assisted towards additional support of a non-financial nature such registration of the business licensing and acquisition of trading permits. There is ongoing refinement of these support measures as our support programmes are constantly monitored and evaluated internally.

In order to develop a more sustainable approach to funding informal traders, sefa is in the process of supporting the growth and development of micro finance institutions to provide long term institutional access to financial and non-financial support as described above, specifically by sector-based Micro Finance Institutions (MFIs). Currently we are assisting the establishment of an MFI for fruit and vegetable hawkers, this is starting out as a pilot in the Buffalo City municipality.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Department of Small Business Development (DSBD) spent a total of R4 512 571.93 on consultants from 1 May 2019 to 31 May 2022, as tabulated below:

DSBD Consultants services - 1 May 2019 to 31 May 2022
Item	Purpose	Amount in Rands
Audit committee	Audit related functions	773 254,15
HRM services	Employee, Health and Wellness related matters	307 570,81
Occupational health	Training	7 900,00
Organisational structure	BBBEE Verification	54 625,00
Qualification verification	Payment for candidate verification	146 980,38
Research and advisory	Appointment of a service provider to provide an overview of the economic challenges experienced by SMME's cooperatives in South Africa and a comparative analysis of policy responses of at least three (3) countries at a similar stage of development and propose suitable policy responses to DSBD for a period of six (6) months. Appointment of a service provider to undertake a study on an analysis and assessment of barriers to entry for small, macro and medium enterprise and cooperatives to economic opportunities and to draft a policy framework. Update the IDBS Policy and Package for Gazzette. Appointment of a service provider to assist the Department with the strengthening of the Red Tape Reduction strategy. SMME Annual Review. Financial Literature and Context Review. Provision of human resources within the Office of the Director-General to render Secretariat functions for a period of 12 months.	3 118 601,60
Translate and transcription	Interpretation and sign language services	103 639,99
TOTAL		4 512 571,93

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOMENT

Reply:

a) The Department of Small Business Development (DSBD) through its entity, the Small Enterprise Development Agency (Seda) provides business development support to SMMEs and Co-operatives with Information & Business Advice, Business Plans, Mentoring and Training etc.

b) With limited resources, Seda has over the past five financial years provided the following skills development programmes for SMMEs and Co-operatives as per table below:

TRAININGS	2021/22	2020/21	2019/20	2018/19	2017/18	Total
Start Up 1	R1,014,111	R438,178	R566,617	R903,389	R774,003	R3,696,298
Small business Start Up	R150,844	R157,365	R409,954	R440,347	R497,540	R1,656,050
Basic Business Skills	R2,363,054	R2,610,713	R1,216,157	R1,224,240	R1,070,592	R8,484,756
Other Training	R20,011,593	R7,270,968	R1,435,190	R1,879,117	R2,631,256	R33,228,124
Co-Op Training	R203,920	R269,310	R384,764	R130,220	R380,542	R1,368,756
Total	R23,743,522	R10,746,534	R4,012,682	R4,577,313	R5,353,933	R48,433,984

“Other training” in table above includes amongst others: Productivity improvement, Capacity Building training, Customer Service training, Labour Employer training, financial wellness and sector specific training which was introduced in 2021/22 FY.

Seda through its Learning Academy has developed different training programmes. These programmes are credit bearing and accredited by the Services Seta. Quality training aims to assist organisations of all types to implement and operate the Quality Management System (QMS) to increase effectiveness, consistency and customer satisfaction, explain the benefits of implementing QMS and understand the quality, management principles. Whilst food safety introduces Food Safety, Understand Pre-Requisite programme, Hazard Analysis, Critical, Control, Point system (HACCP) and HACCP principles and Implementing a Food Safety Management System (SANS 22000:2019.).

The table below provides Seda’s spent for the past five financial years:

Quality Training and Food Safety	2021/22	2020/21	2019/20	2018/19	2017/18	Total
	R10,140,769	R7,107,300	R5,337,100	R4,706,400	R5,660,400	R38,612,369

Seda also has an Export Orientation Course (EOC) which focuses on Export Development. These courses focus on the business with the aim of helping the business assess its export readiness. The trainings target SMMEs that have the intention and the potential to enter the export business or those already involved in exports but wanted to strengthen their knowledge in this field of business. Seda has over the past five financial years provided Export Orientation courses for SMMEs and Co-operatives as per table below:

Export Development - Export Orientation courses	2021/22	2020/21	2019/20	2018/19	2017/18	Total
	R730,000	R291,845	R150,000	R380,000	R220,000	R1,771,845

Furthermore, Seda has an Entrepreneurship in Schools Programme that encourages learners to consider entrepreneurship as an alternative career to employment. The main objective of the programme is:

1. To influence the mind set of learners by encouraging them to become job creators instead of job seekers once they leave the schooling system.
2. To equip learners with entrepreneurial knowledge and skills needed to start and manage their businesses; and
3. To improve entrepreneurial activity amongst the learners and educators.

The table below provides Seda’s spent for the past five financial years:

Entrepreneurship in schools	2021/22	2020/21	2019/20	2018/19	2017/18	Total
	R3,260,000	R1,893,242	R2,072,671	R2,060,364	R2,103,817	R11,390,093

Seda is also in partnership with the United Nations Conference on Trade & Development’s (UNCTAD) Division of Investment and Enterprise United Nation’s Empretec training Programme. The following are details about the programme:

1. Empretec is a 6 Day programme aimed based on a unique Harvard University methodology focusing on behavioural approach to entrepreneurship.
2. The programme is interactive, experience and self-assessment based and takes 25-30 participants per workshop. Participants learn by doing.
3. Participants on this programme receive an UNCTAD endorsed certificate.
4. Programme develops Personal Entrepreneurial Competencies (PECs) such as Opportunity Seeking, Persistence, Goal setting, risk taking, fulfilling commitments, planning etc. for participants.

The table below provides Seda’s spent for the past five financial years:

Empretec	2021/22	2020/21	2019/20	2018/19	2017/18	Total
	R1,050,000.00	R1,155,000.00	R1080000	R1710000	R810000	R5,805,000.00

Seda also has a dedicated programme, The Basic Entrepreneurship Skills Development (BESD) which was jointly developed by Seda and German Federal Ministry for Economic Cooperation and Development via Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) since 2012. GIZ left the programme in December 2016. The programme is funded by the National Skills Fund for an amount of R84 million. The BESD approach utilises coaching as an innovative methodology to facilitate and reinforce learning and development support to emerging entrepreneurs. A total of 260 undergraduates and 1998 Emerging Entrepreneurs successfully completed the training initiative.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

1. The only meeting discussing appointments within the Department of Small Business Development (DSBD) that I attended within my role as Executive Authority of the DSBD was with the departmental officials duly appointed and authorised to engage on the appointment of personnel within the DSBD.
2. All appointments within the Department of Small Business Development (DSBD) are in line with the relevant Public Service Regulations as published by the Department of Public Service and Administration. Appointments within the DSBD follows the processes and guidelines contained within the regulations. As such these appointments do not get discussed at forums or external structures that are not regulated by the Public Service Regulations.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

Since the Minister took office (August 2021) no study has been conducted on SMMEs that have registered as formal businesses. The only study which was conducted was in partnership with Fin scope South Africa during 2021/22 financial year which has estimated the total number of SMMEs that have registered as formal businesses at 2 615 715. The study segmented micro enterprises at 2 219 026, small enterprises at 375 809 and medium-sized enterprises at 20 916, full details of each category are outlined below.

Table 1: Small Enterprises by category and number of employees

Additionally, small enterprises operate mainly within the services and trade industries whilst medium-sized enterprises are predominantly within the industrial sector. In terms of the study the industries/sectors of operation are as follows: majority of micro and small enterprises operate within the services sector/industry as well as trade, whilst medium enterprises are within the industrial sector.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

(a) The following Incubators are funded by the Small Enterprise Development Agency (Seda) through funding allocation from Department of Small Business Development (DSBD):

No.	Province	Number of Incubation Centres
1	Eastern Cape	17
2	Free State	6
3	Gauteng	36
4	Kwa Zulu Natal	19
5	Limpopo	7
6	Mpumalanga	10
7	Northern Cape	5
8	North West	8
9	Western Cape	14
122

(b) According to data collected during 2019/20 financial year, a total of 106 incubators in the private sector were recorded. See below breakdown:

Type	No
Accelerators	49
Incubators	57
Total	106

It is however difficult to get real time numbers since state funded and private sector incubators are not governed and or affiliated to a body. Seda is in a process of resuscitating the Southern African Business and Technology Incubation Association (SABTIA) which will address the intention of assessing the overall number of incubators in the country.

(c) Seda does not have data on international players per province, however Seda is co-funding an incubator with the French Embassy called French South African Tech Labs in Cape Town.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

A general approach adopted by the Department is to understand the quantum of financing and activity in specific value-chains within the sector. With this perspective, it was noted that renewable energy is clearly the most substantial sector currently, and opportunities were identified for specialised SMMEs who provide the technical services and products required at different stages of development and operation. Technologies such as solar water heating, bioenergy, smart grids and smart meters provide considerable opportunities across the board for SMMEs. Beyond the various product and service sectors and value chains, another key area of intervention is to support SMMEs to make them greener, more sustainable and thereby more competitive.

The Department has looked at mechanisms to support SMMEs within targeted sectors, using all instruments at their disposal. This includes:

1. Business Development Support, incubation.
2. Ensuring specialised technical and quality support for SMMEs.
3. Plans are afoot to look at preferential and specialised financial assistance and incentives.
4. Policies to set-aside or ringfence a percentage of the value of projects or products for SMMEs in defined value-chains, sub-sectors and state procurement.
5. Localisation and demand-side policies.
6. Export support.

The Department is also looking at supporting SMMEs to become more sustainable and to adopt green practices through partnership with the Department of Fisheries Forestry and the Environment (DFFE) and the Department of Mineral Resources and Energy (DMRE) looking at the following specific measures:

1. To publicise, support and facilitate access by SMMEs to the full range of energy and resource- saving services.

2. Encourage and incentivise SMMEs to install embedded power generation technologies as it becomes economically feasible.

3. Promote the concept of circularity and the efficient manufacture and sustainable use of materials and resources.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

(a) The Department of Small Business Development (DSBD) has engaged the South African Local Government Association (SALGA) to ensure that municipalities speed up the process of issuing permits to street vendors as this mandate resides with local government.

(b)(i)&(ii) The DSBD is working tirelessly with its entities, the Small Business Development Agency (Seda) and the Small Enterprise Finance Agency (sefa), together with local municipalities in KwaZulu-Natal to support informal and micro businesses that are conducting trade in many areas within the province. Local municipalities continuously approach the Department to implement its programmes to support these businesses in areas that have been identified as requiring urgent assistance particularly in rural areas and in locations along the N2 highway.

The three main programmes that the DSBD and its entities implements to support traders are the Informal and Micro Enterprise Development Programme, the Craft Support Programme as well as the Fruit and Vegetable Support Scheme. Local municipalities together with relevant business associations are encouraged to engage their local Seda offices to arrange for interventions aimed at targeted communities along the N2 for the provision of relevant tools and other business development support.

The DSBD further has signed off an MOU to collaborate with the Department of Forestry, Fisheries and Environment (DFFE) on several areas. One of these areas focuses on the fishing industry. The DFFE has issued fishing rights of up to 15 years to fishing co-operatives along the coastal communities in South Africa, some of which are in KwaZulu-Natal. The Department has found that most of them have little or no proper fishing equipment and tools including protective gear.

Some of them have received training but others still need to be capacitated or trained on several skills including but not limited to business training, financial management, safety protocols in water, co-ops training, etc. The DSBD and its entities are collaborating with DFFE in developing appropriate programmes and interventions to speedily address these gaps.

STELLA NDABENI-ABRAHAMS

MINISTER: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

Reply:

Statistics South Africa (Stats SA) does not currently dis-aggregate their reports on employment by sizes of enterprises. Both the Quarterly Labour Force Statistics (QLFS) and the Quarterly Employment Statistics (QES) reports do not disaggregate employment by large, medium or small enterprises and neither do they dis-aggregate by the different age groups. The Department of Small Business Development (DSBD) and its agency, the Small Enterprise Development Agency (SEDA) have commissioned the Bureau for Economic Research to analyse and compile the ‘SMME Quarterly Update’ which uses statistics provided by Stats SA and other sources to give a clearer and much nuanced picture on the contribution and participation of SMMEs in the South African economy.

According to 2021 quarter 3 SMME Update, a large percentage of small businesses are owned and operated by people between the ages of 35 and 55. The number of SMME owners aged 35- 55 increased by 7.2% between September 2020 and September 2021; while those outside this group (but younger that 75) fell by 5.8%. Surprisingly, SMME owners older that 75 increased from 7000 to nearly 12 000, while those between 15-19 years decrease by 2% (see table below)

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

Statistics South Africa (Stats SA) does not currently dis-aggregate their reports on employment by sizes of enterprises. Both the Quarterly Labour Force Statistics (QLFS) and the Quarterly Employment Statistics (QES) reports do not disaggregate employment by large, medium or small enterprises and neither do they dis-aggregate by the different age groups.

Stats SA does however, in the Quarterly and Annual Financial Statistics (QFS and AFS) provide dis-aggregated statistics in terms of Employment Costs borne by Large, Medium and Small enterprises. The 2021 quarter 4 Quarterly Financial Statistics show that SMMEs accounted for a greater share of employment costs of all industries (QFS excludes agriculture) amounting to 55% of R 1,7 trillion.

Large enterprises accounted for a larger share of employment costs in three of the seven major industrial groupings; namely Mining and Quarrying at R33 billion (90%); Electricity, Gas and Water at R8,2 billion (92%) and Transport at R 31 billion (71%).

SMMEs accounted for a larger share of employment costs in Manufacturing at R54 billion (55%); Construction at R 10 billion (63%); Trade at R12 billion (60%); Business Services and Real Estate at R 104 billion (72%) and Community, social and personal services at R 11,8 billion (51%).

The Department of Small Business Development and its agency, the Small Enterprise Development Agency (Seda) have commissioned the Bureau for Economic Research to analyse and compile the ‘SMME Quarterly Update’ which uses statistics provided by Stats SA and other sources to give a clearer and much nuanced picture on the contribution and participation of SMMEs in the South African economy. According to 2021 quarter 3 SMME Update, SMMEs accounted for 9,7 million jobs for themselves and to others (see details in table below).

The Department is of the view that Stats SA should dis-aggregate Labour and Employment statistics in terms of the contribution of large, medium and small enterprises in the same way as in the Annual and Quarterly Financial Statistics.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The exploitation of the SMMEs by the big companies is a concern as well for the DSBD. It is against this background that the DSBD, through the National Small Enterprise Amendment Bill, is in the process of effecting amendments to the National Small Enterprise Act, 1996 (Act No 102 of 1996) to provide for the establishment of the Small Enterprise Ombud Service.

The proposed Office of the Small Enterprise Ombud Service is meant to resolve disputes affecting small enterprises in an economical expeditious and equitable manner without the need to resort to costly litigation. This will include provisions to deal with unfair trading practices that result in the exploitation of small-, micro-, and medium- enterprises.

Regarding the processing of the Bill, public comments have been received and considered. Currently there is an engagement with the Office of the State Law Advisors (OSCLA) for certification and once that is done the Bill will be tabled to Cabinet for approval to be introduced in Parliament.

STELLA NDABENI-ABRAHAMS

MINISTER: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

Reply:

A joint study by the Departments of Small Business Development (DSBD) and Planning, Monitoring and Evaluation (DPME) on research on the delays and non-payment by government on small, medium and micro enterprises (SMMEs) concluded in June 2020 found that 56% of SMMEs, the majority of which were micro enterprises, were impacted by the delayed and non-payment by government. The recommendation was that the impact of this noncompliance with the 30-day payment policy was too large, especially given the compounding impact it has on not only business owners and their families but also employees and their families, and the recommendation was that government should take effective measures to enforce the 30-day payment policy. Legislative provisions for compliance to the 30-day payment policy falls within the ambit of jurisdiction of National Treasury. The DSBD’s role is to provide advocacy and awareness of these requirements and regulations. National Treasury has agreed and is currently in the process to strengthen these provisions.

Given the devastating effect that none and late payment of small enterprise supplier invoices has on the economic viability of the small enterprises, letters were written to our counterparts in provinces encouraging them to honour their payment obligations, especially to small enterprises, and to pay small enterprise suppliers within the agreed timeframes. As part of the DSBD current Roadshows and Partnership Dialogues that are being undertaken in all (nine) 9 provinces, counterparts at provincial and municipal level to ensure compliance to payment requirements to small enterprises whilst the regulations are being strengthened.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

(1)(a)(i) & (ii) Seventy (70) law firms are currently contracted to the Small Enterprise Finance Agency (sefa) and eleven (11) law firms are contracted with the Small Enterprise Development Agency (Seda).

(b) All law firms with Seda are contracted until finalisation of each case except one law firm which is contracted for 12 months at R921 600.00. In the case of those law firms contracted with sefa, the period of contract is 36 months ending during the course of this year.

(c) The following table shows amounts paid to each firm for the services rendered in the 2021/22 financial year in each case. It is to be noted that payments reflected for those companies that have invoiced to Seda and sefa, and those not reflected below, although contracted with the agency, may only paid when a service is sought from their respective firms. From sefa’s end, the reasons why some contractors are not utilised may be due to lack of response from the firms when asked to provide assistance or lack of work required to be sent out for external attorneys.

Seda	sefa
No.	Law firm	Amount	No	Law firm	Amount	No	Law firm	Amount	No	Law firm	Amount
1.	Firm A	R17 000.00	1.	Firm A	R1 439 615,68	16.	Firm P	R172 650,50	31.	Firm AE	R74 175,00
2.	Firm B	R1 741.10	2.	Firm B	R1 260 984,55	17.	Firm Q	R171 751,32	32.	Firm AF	R61 340,46
3.	Firm C	R 40 000.00	3.	Firm C	R906 766,81	18.	Firm R	R162 570,67	33.	Firm AG	R56 580,00
4.	Firm D	R 2 375.00	4.	Firm D	R675 521,89	19.	Firm S	R158 355,00	34.	Firm AH	R55 922,00
5.	Firm E	R 40 237.06	5.	Firm E	R564 318,64	20.	Firm T	R155 452,51	35.	Firm AI	R55 291,43
6.	Firm F	R23 000.00	6.	Firm F	R512 667,69	21.	Firm U	R144 588,73	36.	Firm AJ	R52 763,13
7.	Firm G	R 44 907.50	7.	Firm G	R465 365,74	22.	Firm V	R142 847,11	37.	Firm AK	R48 012,50
8.	Firm H	R 46 000.00	8.	Firm H	R392 891,56	23.	Firm W	R133 535,65	38.	Firm AL	R43 125,00
	9.	Firm I	R297 323,54	24.	Firm X	R131 265,00	39.	Firm AM	R34 787,50
	10.	Firm J	R278 483,35	25.	Firm Y	R130 500,05	40.	Firm AN	R29 006,84
	11.	Firm K	R275 014,50	26.	Firm Z	R104 933,48	41.	Firm AO	R20 326,25
	12.	Firm L	R272 124,51	27.	Firm AA	R104 388,76	42.	Firm AP	R5 453,44
	13.	Firm M	R238 671,02	28.	Firm AB	R103 250,09	43.	Firm AQ	R4 364,75
	14.	Firm N	R226 562,70	29.	Firm AC	R96 770,78	44.	Firm AR	R1 007,76
	15.	Firm O	R206 783,12	30.	Firm AD	R81 663,82	45.	Firm AS	R303,60

(2) No, Seda and sefa does not have Retainer fee agreement nor is there retainer fees paid to the law firms.

(3) In relation to law firms contracted by Seda, there is a pre-approved and agreed fee price schedule for invited tender bids. The lowest bidder is appointed and for one firm in particular the hourly rate for a Senior Associate is R1 600.00

For those law firms contracted by sefa, pre-approved and agreed fee price schedule is attached to the SLA signed between sefa and the law firm, entitled Annexure A, attached hereto.

(4) Yes, law firms are only paid for work conducted.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Department has engaged with Waterberg District and Bela – Bela Local Municipality to ascertain the potential damage and the envisaged assistance needed to support the street vendors in Bela – Bela. All three stakeholders have agreed to have formal discussions to assist the Bela Bela local Municipality to apply for the shared economic infrastructure facility to build stalls or containers for the informal business. Once such engagements have taken place, a permanent solution will be found to address this situation.

STELLA NDABENI-ABRAHAMS

MINISTER: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

Reply:

The Spaza Shop Support Programme as implemented by the Small Business Development Portfolio (the Department of Small Business Development [DSBD], the Small Enterprise Development Agency [Seda] and the Small Enterprise Finance Agency [sefa] is linked to a broader process of value chain development within the retail space of spaza shops that are owned by South Africans. This includes the concurrent linking up of beneficiaries with wholesalers, bulk buying arrangements done through South African Spaza Support Associations, access to SMME products at wholesalers by South African-owned spaza shops through localisation efforts of the DSBD and its entities as well as the formalisation and strengthening of these South African-owned spaza shops by working with municipalities and the Banking sector.

Secondly, the DSBD has facilitated the participation of relevant public sector and private sector role-players in the development and strengthening of spaza shops that are owned by South Africans by providing access to the tools developed by these role-players. This equips South African spaza shops to become more competitive within the areas in which they operate.

Thirdly, the Department is reviewing the Businesses Act no.71 of 1991 with the intention of amending the legislation to provide for norms and standards, a common business licensing framework and better protection for South African informal traders including spaza shops. The proposed amendments would also include provisions for the Minister to issue regulations and directives necessary for the effective implementation of the Act.

In addition to the above the DSBD is assisting with the transitioning of informal spaza shops to formality by providing assistance with regulatory requirements and instruments such as company registration and compliance with tax and labour legislation through Seda. This transition allows South African spaza shops to gain access to opportunities for growth and sustainability within the mainstream economy as described under the first point above.

Through all these efforts, the DSBD can capture and record South African spaza shops into a single database that allows the state to monitor and regulate the trends within the retail space that is occupied by spaza shops while at the same time providing support to South African spaza shops as described above.

As of 31 March 2022, non-financial support was provided to 10 574 Spaza shops through Seda. Furthermore, through sefa we approved and disbursed funding to 5 907 Spaza shops to the value of R36 945 500.00 which facilitated 6 633 jobs.

STELLA NDABENI-ABRAHAMS

MINISTER: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

Reply:

(1)(a) The Department of Small Business Development (DSBD) is collaborating with the Presidency on National Priorities and Approaches to Red Tape Reduction (RTR) and has formed a small working group of around 1-2 representatives from a broad range of stakeholders. The working group held its first meeting at a workshop held on the 15 June 2022, which was held at the Union Buildings and facilitated by the Government Technical Advisory Centre (GTAC).

(b) As the DSBD is part of this team, it will be the prerogative of the Presidency, as the leader of the initiative, to report on the proposals that emerge therefrom.

2(a) The Presidency through Mr Sipho Nkosi and the dedicated team, is collaborating with the DSBD, on the Inter-Provincial Task Team on Red Tape Reduction and Ease of Doing Business (31 March 2022), and has requested that written submissions be made by provinces on red tape challenges they experience:

• 1. Where does your work in the sector “get stuck” due to “red tape”, identifying challenges experience?
  2. How could the Red Tape Reduction Team in the Presidency assist?
  3. Identify Top 5 potential quick wins in Red Tape Reduction.

The Department is currently collating this information from the provinces and once all provinces have submitted, the information will be analysed and constructive inputs recommended by provincial partners, will be shared with the Presidency.

It should be noted that Mr Nkosi and his team at the Presidency have just begun their consultative work and engagements with all key stakeholders in the Red Tape Reduction and Ease of Doing Business Ecosystem. The DSBD views its role as supportive partner to the overall strategic focus of the Presidency, assisting to provide and facilitate access to key information on our consistency (Small Businesses, Cooperatives and the Informal Sector in Township and Rural Locations), to ensure non-duplication and a strategic focus on the needs thereof, supported by the Presidency.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Minister of Small Business Development is aware of the effects of the rising costs of fuel to small enterprises. However, the Minister has not considered further mechanisms to cushion the blow that small enterprises may have felt beyond the government fuel levy relief declared by government. The Minister of Finance announced that the general fuel levy would be temporarily reduced by R1.50 per litre from 6 April 2022 until 31 May 2022. The date of April has since been reviewed to end in August 2022 to provide relief. I believe that the Ministers of Finance and of Mineral Resources and Energy are handling the matter related to fuel relief.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The following are time frames to address for each finding:

1. Review of the Performance Information

The new reporting system for Performance Information was procured. It is in the final stages of design and will be available for use from 01 August 2022.

2. Two Irregular expenditures were reported

Lease of office space in the KZN for R182 358 was condoned. The second expenditure of R84 281 was reported to National Treasury and there was additional information required by National Treasury. Management is busy with the National Treasury request and will resubmit to National Treasury, the process is anticipated to be completed by 31 July 2022.

3. Vacancies of Executives

Effective from June 2020, a moratorium was implemented on the recruitment and selection process due to the incorporation process between the Small Enterprise Development Agency (Seda), the Small Enterprise Finance Agency (sefa), and the Co-operative Banks Development Agency (CBDA) that is underway and critical vacant positions were advertised for 12 months fixed term contract. The Executive Managers positions are re-advertised as the most suitable candidates could not be sourced. On 19 May 2022 the Minister uplifted the moratorium on filling of vacancies with immediate effect, but the fixed term contract should not exceed twenty-four (24) months to ensure that there are no duplicate positions post the integration of sefa and CBDA into Seda. All vacant Executive Manager positions were re-advertised on 03 June 2022.

4. Provision for Bonus error on the notes to AFS

Resolved during the audit.

5. Revenue not collected

The amounts totaling to R151 000 was written off in line with internal policies and procedures. Debts older than a year are provided for as bad debts and the process to recover them continues. The finding is resolved.

6. ICT Controls and Cyber attack

The organisation has sourced services of Sizwe IT to implement ICT security solutions in all Seda estate and the monitoring of the estate. An awareness across the whole of Seda staff regarding their roles and responsibilities and security awareness is underway through the ICT Governance project that resumed in July 2021. The finding is resolved.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

(1)(a) Zero.

(b) Not applicable.

(c) Not applicable.

(2) Not applicable.

(3) Not applicable.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Department appreciates the initiative taken by the Gauteng Department of Economic Development, Gauteng Enterprise Propeller in partnership with the Industrial Development Corporations for the purposes of setting up the Township Partnership Fund. However, the Department is however not in a position to request other state organs such as the provinces to adopt or implement the Fund since the provinces are operating independently.

The Department continues to engage with Provinces with the aim of ensuring uniformity in support for township and rural areas-based enterprises. The DSBD continues to support SMMEs through its own Township and Rural Entrepreneurship Programme (TREP), which is a Programme with a dedicated budget to assist small enterprises operating in underserved and unserved locations such as townships and rural areas.

To compliment the fund established by the Gauteng provincial government, the DSBD has adopted a Portfolio approach comprising of the DSBD, the Small Enterprise Development Agency (Seda) and the Small Enterprise Finance Agency (sefa) using an integrated approach for the support of SMMEs.

Both Seda and sefa have operational offices together with satellite and mobile facilities in provinces and districts throughout the country. This national footprint allows for ease of access and interaction with relevant public and private sector structures as well as with SMMEs that are located in rural areas.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Department of Small Business Development’s agency, Small Enterprise Finance Agency (sefa), which provides financial assistance could not find any record of an application by a Mme Kate, who owns a Spaza shop in Maseru Street, Soweto. For Mme Kate to be considered for funding, an application for funding needs to be submitted. Mme Kate may also visit the nearest sefa Regional Office for assistance in completing and submitting the funding application. The necessary details, including the funding application form, can be found on www.sefa.org.za

STELLA NDABENI-ABRAHAMS

MIINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

1. The Presidential Red Tape Reduction Team, under the leadership of Mr Sipho Nkosi, is an important red tape reduction initiative and a centralised coordination office, whose task is to rally both the efforts and resources to deal with issues of red tape in government. It is by no means a vote of no confidence on the DSBD by the President and the SMMEs.

The DSBD views this development as a meaningful contribution particularly by the private sector in providing expertise to contribute to coordinating, aligning and unblocking channels to address long standing red tape and administrative challenges, that have plagued businesses and more especially small businesses and Co-operatives, but also large ones with start-ups, micro and informal sector even more vulnerable as participants in the economy.

The Department have engaged on numerous steps to ensuring a productive, goal orientated and positive working relationship with the Red Tape Office in the Presidency. The engagement with the Presidency through the Red Tape Office have decided to identify clear areas of collaboration. The details of all these proposals are being finalised and shall form part of the strategic engagement and focussed coordination channels between the DSBD and Mr Nkosi’s Office.

2. The Department understands that communication is a dynamic process of engagement on the needs of our SMMEs and through the Provincial Roadshows and Provincial Partnerships, the Department has proactively engaged SMMEs and Co-operatives in seven (8) provinces already. These engagements would often take place in rural and far-flung locations with the purpose of meeting, listening to and attending to SMMEs’ and Co-operatives’ needs. The range of inputs received from SMMEs have been constructive, which is evident that SMMEs still have the confidence in the DSBD to reduce red tape. There has been overwhelming attendance and participation in these roadshows.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

a) As per the published audited 2020/21 Annual Report of the Department of Small Business Development (DSBD), the Department supported 1 015 women-owned businesses during 2020/21 financial year.

b) The lessons learnt in this regard is that the DSBD should consider designing support programmes which are targeted specifically for vulnerable groups such as women, youth and people with disabilities as these groups are still operating in the informal or micro level and mostly vulnerable to disasters and externalities. The department will also have to collaborate and partner with other entities within government in the private sector to leverage on existing resources and capacity. According to a study conducted in collaboration with the World Bank, women owned businesses have received between 13,8 % and 34% of government support during the different levels of COVID-19 lockdown.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The Spaza Shop Support Programme as implemented by the Small Business Development Portfolio (the Department of Small Business Development [DSBD], the Small Enterprise Development Agency [Seda] and the Small Enterprise Finance Agency [sefa]) is linked to a broader process of value chain development within the retail space. This includes the concurrent linking up of beneficiaries with wholesalers, bulk buying arrangements done through Spaza Support Associations, access to SMME products at wholesalers by Spaza Shops through localisation efforts of the DSBD and its entities as well as the formalisation and strengthening of the spaza shops by working with municipalities and the banking sector.

The responsibility to implement the Spaza Shop Support Programme lies with the entities, while the DSBD co-designed the Programme with the entities it continues to monitor and review the programme to increase uptake. Anecdotal evidence gathered by the entities responsible for implementing the programme has indicated that the major difference between the DSBD programme and the programmes implemented by provincial departments centers on the following issue:

• The funding structure employed by the provinces vs that employed by the DSBD: DSBD employs a blended finance model that incorporates an equal split between grant and loan funding whereas the provincial model is entirely grant funding.

Finally, the DSBD has facilitated the participation of relevant public sector and private sector role players in the development of spaza shops by providing access to the tools developed by these role players.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER FOR SMALL BUSINESS DEVELOPMENT

Reply:

The Minister’s inability to attend some meetings of the Portfolio Committee on Small Business Development is primarily because the scheduled time for this Portfolio Committee is on Wednesdays at 09:30, which clashes with the Cabinet Committee Meetings or Cabinet Meetings which commence on Wednesdays at 08:30 until later in the day. HE President Ramaphosa, has directed that Ministers must prioritise Cabinet work, while at the same time impressed upon the Leader of Government Business in Parliament, HE Deputy President Mabuza to engage Parliament to endeavour to strike a balance between work of Parliament and Cabinet in so far as it relates to Ministers. It has also been resolved that Deputy Ministers need to attend the Portfolio Committee meetings where Ministers are expected to be in Cabinet.

The Minister will endeavour to avail herself to balance her accountability between Cabinet and Parliament as practical as possible.

 

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

1. Reporting of jobs created and maintained by a respective financial Intermediary is furnished by the Financial Intermediary through capturing such information on the Small Enterprise Finance Agency (sefa) Intermediary portal. The legal agreement between the sefa and the financial Intermediaries requires the financial Intermediaries to have supporting documents to support their developmental information (such as, application forms, FICA documents and signed contractual agreement between SMME and the Financial Intermediary) for verification by sefa and its external auditors.

The information is captured, verified and approved by the respective financial Intermediary before sefa authorises it on the system. It is therefore the Intermediary’s responsibility to ensure that correct and reliable information is shared with sefa

2. sefa has not picked up any inaccurate financial reports nor a claim or complaint of such that could have required intervention. sefa hereby confirms that the said financial Intermediary has repaid the facility in full, both Capital and Interest advanced under the agreement. The last payment received was on 12 October 2020. The relationship between sefa and the financial Intermediary ended when the loan was fully amortised.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

No cases of sexual harassment and sexual assault were reported during the afore-mentioned period.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

The total amount in Rand that has been spent on (a) catering, (b) entertainment and (c) accommodation for (i) Minister, (ii) the Deputy Minister and (iii) officials of the department since 29 May 2019 to 16 March 2022 is R12 328 894.17

The breakdown is as follows:

a) Catering

1. Minister : R9 425.50
2. Deputy Minister : R2 311.05
3. Department : R1 091 326.99

Total : R1 103 063.54

b) Entertainment

1. Minister : R1 339.60
2. Deputy Minister : R0.00
3. Department : R0.00

Total : R1 339.60

c) Accommodation

1. Minister : R536 132.09
2. Deputy Minister : R489 473.23
3. Department : R10 198 885.71

Total : R11 224 491.03

Reply:

The applications from the SMMEs are funded from the University Technology Fund (UTF) a joint venture between University of Cape Town (UCT) and Stellenbosch University (SU). Although funded through UTF, they are managed by Stocks and Strauss. All the clients that they currently have, are leads from the university and none of them are from the townships. Using the SMMEs CK documents, Stocks and Strauss can pick up the location/address of the clients.

• Stocks and Strauss collects all the documents submitted when applicants apply for funding including the proof of addresses.
• A point of noting is that all the SMMEs funded under UTF are graduates or students of either UCT or SU.
• The criteria are that applicants must be registered or have been with these universities. This means that the University has all the information of the applicants. The Legal agreement stipulates that the identity of the students and applicants be protected.
• According to the legal agreement between sefa, UTF and other funders, the SMMEs should have an idea of the technology to be funded to qualify for funds.
• The idea is then conceptualised on paper at the pre-seed funding stage where sefa does not participate but only the SMME.
• Once the idea is approved for implementation, sefa then starts investing by paying for the legal costs to register the technology and investing in the venture/project. When conducting such exercise all the documents stated above are requested and protected for security reasons in line with the agreement.

The location of ventures/projects of such nature is therefore based on commercial viability and attraction.

STELLA NDABENI-ABRAHAMS

MINISTER: SMALL BUSINESS DEVELOPMENT

Reply:

a) Neither the Minister of Small Business Development nor the Department of Small Business Development received the correspondence referred to in the question.

b) N/A

c) N/A

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER FOR SMALL BUSINESS DEVELOPMENT

Reply:

(a)(i) Department of Small Business Development (DSBD)
(aa)	Number of supplier invoices unpaid by 30 days	None.
(bb)	Number of supplier invoices unpaid by 60 days	None.
(cc)	Number of supplier invoices unpaid by 90 days	None.
(dd)	Number of supplier invoices unpaid by 120 days	None.
(b)	Total amount outstanding	R0.00
(c)	Date envisaged to settle outstanding amounts	N/A
(b)(ii) Small Enterprise Development Agency (Seda)
(aa)	Number of supplier invoices unpaid by 30 days	None.
(bb)	Number of supplier invoices unpaid by 60 days	None.
(cc)	Number of supplier invoices unpaid by 90 days	None.
(dd)	Number of supplier invoices unpaid by 120 days	None.
(b)	Total amount outstanding	R0.00
(c)	Date envisaged to settle outstanding amounts	N/A
(b)(ii) Small Enterprise Finance Agency (sefa)
(aa)	Number of supplier invoices unpaid by 30 days	1 (One).
(bb)	Number of supplier invoices unpaid by 60 days	None.
(cc)	Number of supplier invoices unpaid by 90 days	None.
(dd)	Number of supplier invoices unpaid by 120 days	None.
(b)	Total amount outstanding	R 69 455.40
(c)	Date envisaged to settle outstanding amounts	Payment is expected to be made to the client by the 28 February 2022.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER FOR SMALL BUSINESS DEVELOPMENT

Reply:

 

Clients associate disclosures of such information with tax information and obligations. They are never comfortable with disclosing information that may create an impression that they make a lot of money. The Small Enterprise Development Agency (Seda) has improved the Service-Level Agreements (SLAs) that Seda signs with clients when an intervention is awarded or provide support that Seda will pay for, to make it easier for the practitioners to get information for reporting.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP
MINISTER OF SMALL BUSINESS DEVELOPMENT

1

DSBD response to NA2781–NW3299E

Reply:

The underspending of R218 million resulted from expenditure budget of R990 million against the actual expenditure of R773 million and National Treasury approved the request.

1. The R218 million was committed at year-end. Seda submitted the motivation to the National Treasury to retain these surplus funds. The explanation provided was based on the calculation that informed the surplus. The formula to calculate the surplus is based on the available cash (on the bank accounts) at year-end together with the amount due to Seda (account receivables), less the amount owed by Seda to suppliers (account payables) and lastly less commitments already made.
2. The National Treasury approved Seda’s request, an amount of R294 million is available to be added on the expenditure budget of 2021/22.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP MINISTER OF SMALL BUSINESS DEVELOPMENT

1

DSBD response to NA2782–NW3300E

Reply:

1. The Informal and Micro Enterprises Development Programme (IMEDP) is a 100% grant offered to informal and micro enterprises from the minimum grant amount of five hundred rand (R500) up to the maximum of ten thousand rand (R10 000) to assist them in improving their competitiveness and sustainability. The Informal and Micro Enterprises Development Programme was espoused from the National Informal Business Upliftment Strategy (NIBUS) that was developed in 2012 and 2013 to address the development void at the lower base of the Small, Medium and Micro Enterprise (SMME) Development strategy. The NIBUS seeks to uplift informal businesses and render support to local chambers/business associations and municipal Local Economic Development offices to deliver and facilitate access to upliftment programmes. The focus is mainly on designated groups, i.e. women, youth and people with disabilities, in townships and rural areas of South Africa.

(b)(i) During the current financial year, the Department of Small Business Development (DSBD) has assisted 83 informal business from eThekwini Municipality through the IMDEP programme. These informal businesses were mainly from Kwamashu. These IMEDP interventions assisted informal businesses with tool of trades depending on the business needs e.g, generators, baking ovens, catering equipment etc. The support provided by DSBD has managed to assist small businesses to compete with established business in terms of productivity, employment and to boost confidence to our beneficiaries.

The Small Enterprise Development Agency (Seda) assisted with non-financial support and mentorship and post disbursement to measure impact on these businesses. The Department is also work closely with the Province, District, and municipalities to ensure that there is adequate support for small business.

The Department has further developed an informal Trader support programme which is aimed at supporting informal and micro businesses following the July 2021 unrest. In this programme each entrepreneur is provided with R3000 (once off grant) to help informal traders who lost their business after the unrest. This programme is currently ongoing and has received 7 410 applications across the country, with total disbursements made to 3 356 Informal Traders worth R10.07 million.

(b)(ii) The DSBD has assisted various businesses under the Township and rural Entrepreneurship Programme (TREP). TREP is made up of various interventions / schemes:

• • Spaza Shops and General Dealer Support Scheme
  • Clothing, Leather and Textile support Scheme
  • Tshisanyama and Cooked Food Scheme
  • Personal Care Scheme
  • Bakeries and Confectioneries
  • Autobody repairers and mechanics
  • Butcheries Support Programme

Further support has been provided under the Small Enterprise Manufacturing Support Programme (SEMSP), which is being implemented by the DSBD’s agency – Small Enterprise Finance Agency (sefa).

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

The Department of Small Business Development (DSBD) started implementing the Pilot Administration Programme (PASP) in KwaZulu-Natal during 2020/21 financial year. The PASP focused on institutionalising the best practises and learnings made in two seminal studies that were conducted. Two seminal projects on Ease of Doing Business in the country were implemented by the Global Indicators Group (Development Economics) of the World Bank Group in collaboration with the National Treasury of the Republic of South Africa, the then Department of Trade and Industry (currently the Department of Trade, Industry and Competition) and the South African Cities Network. The 2015 Ease of Doing Business study conducted in South Africa and the follow-up Ease of Doing Business (EODB) study conducted in 2018.

While Good practices have been found in these two studies, the potential for improvement through the emulation of good practices is limited by factors such as internal coordination between urban metropolitan areas, districts and within the local municipalities. Collaboration among the different levels of government (National, Metropolitan, District and Local Municipal) authorities is hampered by a lack of proper resource allocation.

The key focus of the PASP was to assess the following EODB/Red Tape Reduction (RTR) dimensions:

1. Improving Municipal Service Delivery: Citizen Service Charters and Complaints Notification Systems (CNS).
2. Improving Municipal-Business Communication and Customer Relationship Management (CRM).
3. Improving Municipal Policies, By-laws, and Regulations.
4. Improving Supply Chain Management Processes.
5. Speeding up Land Development Processes and Time Frames - Spatial Planning and Land Use Management Act (SPLUMA).
6. Speeding up Building Plan Approval Processes and Time Frames.
7. Better Management of Informal Trading.

In addition to the above mentioned areas of focus, the PASP is aligned with Government’s “One Plan” for one district and metro model and involves all relevant national, provincial and local government officials, including Provincial COGTA and SALGA, in its execution. It is also a multiyear programme that aims at provide critical synergies between us (DSBD) and the Sub National Ease of Doing Business programme of National Treasury, called the City Support Programme (CSP).

The implementation of the Programme is underway, as indicated that it is a multi-year initiative. During the current financial year, the following successes have been registered:

• Comprehensive Red Tape Reduction Assessments were conducted with each of the three the participating Municipalities. Focus groups were conducted with small businesses in each municipality to “reality test” the information provided by each municipality, in terms of their red tape reduction activities. Compliance with the criteria for good practise as per the Red Tape Reduction Guidelines for Local Government, as well the verification of these efforts was also investigated. Functionality Scores for each of the seven red tape indicators were also computed, indicating the gap between each of the municipality’s red tape reduction efforts and their expected outcomes.

• Scoping of the problem areas and performance cycles detected by the Red Tape Reduction Assessments were conducted. Action Plans for each of the seven indicators across the three participating municipalities were developed.

• The Red Tape Reduction Assessment Results and Action Plans were shared with each of the three municipalities. Action Plan Registers were developed for each of the participating municipalities explaining the steps that they could follow to address the red tape problems detected. Municipalities were given the opportunity to report on which of the action plans they can implement given the fact that some of the are framed according to the immediate, short- and medium-term framework for implementation. The results of these engagements are being captured in a “Report on the Development of the proposed interventions based on the key problems identified through the municipal assessments”. This is in process.

During the last quarter of the current financial year (2021/22), the DSBD will be closely monitoring the implementation of the “action plans” by each of the participating municipalities. A “Report on Implementation of interventions and Monitoring of the performance outcomes of the interventions” will be compiled by the end of March 2022. Emerging best practises and lessons learned will be documented to be incorporated into the “One Plan” of a further five municipalities in the next financial year (2022/23) as well as another five of them in the final year of the current Medium Term Strategic Framework cycle (2023/24). This phased approach will allow for the learnings to be extrapolated to municipalities across the country, within the next three years through close collaboration with Department of Cooperative Governance and Traditional Affairs (COGTA) and South African Local Government Association (SALGA), our partners, using the District Development Model’s “One Plan” to embed these lessons into districts, across the country.

One of the successes that the Department is noting is how the programme is helping the participating municipalities realise the inter-connectedness and interdependencies between different components of local municipalities, for instance the coordination required in issue of a simple business license, between the health, fire and safety, and other forms of regulatory approvals involved in the issue of a business license. There are many centers of excellence that have also been detected across the municipalities assessed, but the administrative systems between most of them, lacks seamless administrative systems, which make for unnecessary delays, frustrations and cost burdens that small businesses have to carry. Red Tape Reduction truly does require a “whole of government approach” in order to be embedded into the fabric of good public administration.

The DSBD and Provincial Partners (Department of Economic Development, Tourism and Environmental Affairs [EDTEA], COGTA and SALGA) are working in close collaboration with three (3) target municipalities which are committed to implementing red tape reduction measures. The three municipalities are Ray Nkonyeni Local Municipality (Ugu District), the City of uMhlathuze Local Municipality (King Cetshwayo District) and Ubuhlebezwe Local Municipality (Harry Gwala District).

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

(1) The multi-sectoral SMMEs who participated at the Intra-African Trade Fair 2021 (IATF) 2021 were taken through the Small Enterprise Development Agency (Seda) Export Development Programme which focuses on among others, export information, assessment, support and market access opportunities. A call for applications was made via the Seda branch network located throughout the fifty-four (54) branch offices located throughout the nine (9) provinces of the Republic. It was also extended to the SMMEs that are participating in the DSBD’s localisation programme, provincial investment agencies and other institutions working in the SMME sector.

The identified SMMEs were assessed through a dedicated assessment tool called the Export, Readiness Assessment Tool (ERAT), to determine their export readiness. The SMMEs were then subjected to final adjudication. Qualifying SMMEs included those in the Craft Sector. All nine provinces were represented: Gauteng, Western Cape, Free State, Eastern Cape, KwaZulu-Natal, Limpopo, North-West, Mpumalanga, and Northern Cape.

Further to this, the Department also supported 45 SMMEs from the Craft Sector to exhibit at the Fair. Each province selected 10 enterprises that were presented to the National Craft and Design Body. Five enterprises per province were selected by the National Craft and Design Body on the basis of their products, capacity to deliver, colours and markets trends.

(2) A call for applications was made via the Seda branch network situated throughout the regional offices in all nine provinces and to the SMMEs that are participating in the DSBD portfolio’s Localisation programme, provincial investment agencies and other institutions working in the SME sector. These networks mentioned above include stakeholders such as municipalities that are situated in the rural and township areas.

The provincial hubs and agencies, which are key implementation partners of the DSBD, were requested to initiate a process of identifying craft SMMEs to be selected and screened from the DSBD e-commerce database called PEEK. A call for applications was also made through the Provincial Investment Agencies. This ensured representation from township and rural Craft SMMEs.

(3) Major trends observed were as follows:

3.1 Some SMMEs did not qualify as per the ERAT; and

3.2 The key areas in which the non-qualifying enterprises struggled with were Production and Markets/Marketing.

3.3 In terms of the Craft SMMEs, the following trends were observed:

3.3.1 Inconsistent product quality;

3.3.2 Lack of production capacity; and

3.3.3 Failure to differentiate between consumer and trade markets.

Non-qualifying enterprises are still supported through the Seda export development programme, with a number of interventions designed to improve their export readiness and the ability to therefore participate in market access events in the future.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

(a)&(b) On 4 August 2021 Cabinet approved the incorporation of the Small Enterprise Finance Agency (sefa) and Cooperatives Banks Development Agency (CBDA) into the Small Enterprise Development Agency (Seda) to form a new entity that will be responsible for the provision of both financial and non-financial support to small enterprises throughout the entire business development lifecycle, with effect from 01 April 2022.

This will involve the conversion of Seda into a Schedule 2 Public Entity with the Minister of Small Business Development as its Executive Authority. The new entity will have both financial and non-financial small enterprise support functions. Both the conversion of Seda and the definition of the support functions will be done through an amendment of the National Small Enterprise Act. The Capacity Building function and the Central Support Services of the CBDA will also be transferred into the new entity.

Currently the Business Case, that includes the implementation plan with clear milestones and time frames, developed to guide the implementation of the merger is being finalised. Furthermore, we have established a Joint Oversight Forum which is chaired by Minister and comprises the Chairpersons of the three entities and the Executives. In line with the provisions of Section 16B of the National Small Business Amendment Act the Minister has consulted with the Executive Authorities of the designated institutions for incorporation into Seda which are the Minsters of Trade, Industry and Competition, and Finance.

We have also gazetted a notice of intention to incorporate institutions whose objectives and functions are similar into a single Agency (Seda). The process of appointing the Board of Directors, of the new Agency, has been initiated and the advertisement calling for nominations, will be published in a newspaper on 12 December 2021 with a closing date of 24 December 2021. The same advert will be placed on the DSBD, Seda and sefa websites, as well as social media pages.

The Department of Small Business Development has established the following workstreams comprising of sefa, Seda, IDC and CBDA plus organised labour:

• Policy and Structural Reform: This team will be responsible for developing the enabling policy framework and legislation for the establishment of the Small Business Development Agency and the dissolution of the CBDA, Seda and sefa as separate, stand-alone entities.
• Organisational Consolidation Team: This team will be responsible for developing and implementing the consolidation of the business and operations of the CBDA, Seda and sefa post-merger into one seamless business enterprise and designing and implementing the post-merger organisational chart.
• Finance and Information Technology: This team will be responsible for developing and implementing the consolidated Information Technology and Finances of the CBDA, Seda and sefa post-merger.

On the 8th December 2021, the Portfolio Committee on Small Business Development, which Honourable Mthenjane is a member of, was provided with a detailed briefing on the processes towards the incorporation by DSBD and sefa, led by the Deputy Minister for Small Business Development.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

(1) – (2) The Department of Small Business Development (DSBD) has a mandate to lead and coordinate an integrated approach to the promotion and development of entrepreneurship, Small, Micro and Medium Enterprises (SMMEs) and Co-operatives, and to ensure an enabling legislative and policy environment to support their growth and sustainability. This includes ensuring that the SMMEs and Co-operatives are kept productive, not only during the periods of the unfortunate Eskom’s power cuts, but as a standard support provided by the Department to the SMMEs and Co-operatives.

The ongoing widespread rolling blackouts were not anticipated, however, through messaging and support to SMME’s in this regard, the department seeks to communicate to all SMME’s of the impact of power outages to their businesses and encourage them to employ contingency arrangements and planning in accordance with the ESKOM’s power alerts schedules on outages.

In so doing, SMME’s will experience minimum disruption through proper planning until the electricity crisis is resolved by ESKOM and respective supporting departments.

The department has not done an estimate as it has not engaged in an exercise of assessing the impact of power outages to the SMME’s. Further, power outages not only affect the economic sector alone but South African society as a whole and it is not clear from ESKOM, DPE and DME when these outages will end.

The Department has in earnest started considering green energy interventions, which will assist SMMEs and Co-operatives to stay abreast amidst the power cuts, thereby boosting their productivity and sustainability. A partnership has been formalised in this area of work with the Department of Forestry, Fisheries and the Environment and progress being made towards the implementation of the planned interventions is reported as part of the Economic Reconstruction and Recovery Plan.

The DSBD’s agency, sefa, has also prioritised green industries (renewable energy, waste, and recycling management) as one of the sectors that the agency funds for qualifying business ventures.

The Minister for Small Business Development launched the Youth Challenge Fund (YCF) on 18 November 2021, which is a youth start-up programme co-designed by the DSBD and its entities, sefa and Seda to contribute towards resilient, green and inclusive economic recovery. One of the innovative sectors targeted as part of the YCF is the green economy – focusing on funding youth entrepreneurs that are in the business of energy, renewables and recycling.

Despite the constant communication with the SMMEs and Co-operatives, there has not been an indication, to DSBD, of the losses that they have incurred due to the Eskom’s power cuts. However, it is understood that small business owners do from time to time approach the Department of Public Enterprises (DPE), as Eskom is DPE’s entity, with an indication of the loss they incurred due to the power cuts; and DPE, working with Eskom, assists those small business where possible. It should be emphasised that DSBD’s support of small businesses is not limited to challenges faced by SMMEs and Co-operatives due to power cuts, which will be addressed through the green energy initiatives outlined above, but it's a holistic support.

 

MS STELLA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

a) As a result of the unstructured economic framework, most SMMEs, especially those owned and run by women, youth and persons with disabilities continue to face economic exclusion. Women’s challenges are further compounded by structural barriers to gender equality and access to productive resources. The high rate of unemployment amongst the young people makes entrepreneurship a practical option to addressing the socio-economic conditions of this targeted group. The coronavirus pandemic had exposed the level of inequality between men and women, youth and persons with disabilities as most of them operate within the informal economy. This has raised an urgent need for the economic empowerment of women and girls and all targeted groups.

In responding to the above reality, the Department of Small Business Development (DSBD) has committed to deploy several interventions to support sustainable SMMEs and Cooperatives that will contribute meaningfully to the economy over the medium-term. Most of these interventions will prioritise young people, women and persons with disabilities, especially those that are from historically disadvantaged rural and township areas. This is in line with the DSBD strategic decision of mainstreaming the designated groups with a minimum 40% target for women, 30% for youth and 7% for persons with disabilities across all the SBD Portfolio programmes and interventions. To this effect, the DSBD will continue to contribute to Priority 2: Economic Transformation and Job Creation and the related sub-outcomes and interventions.

b) In responding to covid-19 negative effects on the economic, the Department of Small Business Development (DSBD) introduced the Township and Rural Entrepreneurship Programme (TREP) that was developed following the approval of the Township and Rural Entrepreneurship Fund by Cabinet in March 2020. TREP offers both financial and non-financial support and prioritizes supporting small businesses in townships and rural areas to participate meaningfully in the mainstream economy.

(c) Since TREP was introduced in the last financial year, the Department is yet to conduct an impact assessment. However, there has been significant support provided to SMMEs since programme inception. In terms of the financial support,6293 SMMEs were supported to the tune of R141 612 457, with 7674 jobs facilitated. Furthermore, 23 441 companies were assisted with non-financial support.

d) The Department adopted an approach that involved the joint implementation of the programmes together with its entities (the Small Enterprise Development Agency [Seda] and the Small Enterprise Finance Agency [sefa]) and worked as a portfolio wherein the capacity and reach of the entities was utilised for efficiency of delivery.

In addition to this approach, the Department forged meaningful partnerships with banks and other relevant private sector institutions such as the large telecoms companies. This allowed for the use of enabling technology to fast-track the programme and assist with the mainstreaming objectives.

e) The Department increased its cooperation with relevant associations whose members come from SMMEs and other targeted groups at it reached into communities to mitigate the adverse and ravaging impact of Covid on their members within those communities.

These efforts were strengthened by the adoption of the District Development Model approach coupled with the use of tools (an ecosystem development and related support tools were developed) and structures such as District Local Economic Development forums as well as aligning to and working with Provincial Economic Development Departments.

Over 50 officials were deployed from the Department into Districts throughout the country to partner with municipal officials, Seda and sefa for outreach, for the rollout of TREP and for the promotion of other government SMME support programmes.

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

a) The Department of Small Business Development (DSBD) has developed the Business Recovery Support Programme in response to the recent spate of public violence, looting and destruction of property in Kwazulu-Natal and Gauteng. The Business Recovery Support Programme focuses on uninsured small enterprises impacted negatively by the unrest, predominantly in KwaZulu-Natal and Gauteng provinces. The Programme caters for small enterprises that require funding for working capital (including stock), equipment (including delivery vehicles) and furniture, as well as fittings.

The programme offers financial support in line with the Blended Finance approach, which is a combination of a grant (60%) and a loan (40%). The interest rate on the loan component is limited to 5%. There is an initial payment moratorium of up to maximum of 12 months for small enterprises in KwaZulu-Natal and Gauteng; and six (6) months for other Provinces. The repayment period of a maximum of 60 months applies. Maximum funding available per entity is R2 million.

The DSBD also has the Township and Rural Entrepreneurship Programme (TREP), which offers financial and non-financial support to rural and township enterprises. This programme has been in existence before the looting that occurred in KwaZulu-Natal and Gauteng provinces in July 2021. The aim of the programme is to support SMMEs and co-operatives in order to revitalise and improve the economy. The SMMEs that were affected by the looting may also apply for the TREP support.

Furthermore, the DSBD and its entities (Small Business Development Agency [Seda] and Small Business Finance Agency [sefa]) has the Informal Traders Support Programme that is aimed at supporting informal and micro businesses in the informal sector that were affected by looting. The Programme provides business focused support (financial and non-financial) to informal businesses. The Programme will support 17 667 entrepreneurs at R3 000 each (as a once-off grant).

In addition, and linked to the Programmes outlined above, Seda provides Business Development Support (including pre and post investment support), which includes development of business plans where necessary, financial management training, and other business support related aspects.

b) Applications by businesses that were affected by the looting are currently being processed by sefa. These businesses affected by the looting, based in Kwa-Zulu Natal and Gauteng North and South at large, are open to apply for the programmes offered by the Small Business Portfolio (the DSBD, Seda and sefa).

However, the table below outlines the applications received so far at sefa KwaZulu-Natal and Gauteng Regional Offices that are currently being processed:

REGIONAL OFFICE	KWAZULU-NATAL	GAUTENG SOUTH	GAUTENG NORTH	TOTAL
Total number of applications received	30	10	19	59
Total value of applications received	R30 000 000	R9 700 000	R8 100 000	R47 800 000
Total number of applications being processed	13	5	3	21
Total value of applications being processed	R15 500 000	R2 593 000	R1 500 000	R19 593 000

MS STELLA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

1. The DSBD is the custodian of the Braai Café in partnership with the National Youth Development Agency (NYDA) as the implementation agency through a Memorandum of Understanding.
2. The DSBD budgeted funds totalling R8 400, 000.00 through the Cooperatives Incentives Scheme (CIS) to roll out the programme. A total of R1 800 000.00 was advanced to the NYDA. Of the advanced amount, R514 175.90 was spent and R1 285 824.10 was returned to DSBD and paid back to the National Treasury at the end of the 2020/21 Financial year as per Treasury Regulations.
3. YOU TURN - Consultant services and TABBS Group, as outlined in the budget breakdown below, are the service providers that were contracted by the NYDA. Payment terms were linked to the following key deliverables: project inception, store roll-out, and post implementation support as stipulated in the agreement. The payment services are also outlined in the table below.

Date	Amount Paid	Items paid/allocated for:
27/03/2018	R865,000.00	Amount approved by NYDA
20/04/2018	R240,000.00	TABBS GROUP - Technical support
	R50,000.00	TABBS GROUP - Business Plans
	R50,000.00	TABBS GROUP - Roll-out Delft store
	R13,168.31	Rental deposit - Delft
	R2,698.00	Game/Dion -
	R355,866.31	Total payments by NYDA
		SBD Investment - equipment
		SBD Investment - consultant services
20/04/2018	R509,133.69	Balance (NYDA approval)
30/04/2018	R8,400,000.00	Funds from DSBD
	R6,600,000.00	Adjustment of funds from DSBD
	R1,800,000.00	Balance of funds from DSBD
Nov-19	R13,168.31	Rental refund
Nov-19	R522,302.00	Balance (NYDA approval)
07/11/2019	R345,000.00	YOU TURN - Consultant services
18/03/2020	R7,547.00	Point of sale system
	R12,000.00	Architect
	R5,439.04	Uniforms
	R21,046.80	Health safety and hygiene
	R391,032.84	Total payments
21/08/2020	R6,184.16	Security
	R27,645.00	Building improvements
	R25,673.90	Kitchen utilities
	R2,737.00	Additional kitchen equipment (grease trap)
	R17,297.50	Kitchen equipment (Gas) & installation
	R41,805.50	Scooters
	R1,800.00	Working capital
	R123,143.06	Total payments
21/08/2020	R1 285 824.10	Balance from DSBD funds

MS STELLA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

1. The Department of Small Business Development (DSBD) piloted the Braai Café Programme which was coordinated through a partnership with the National Youth Development Agency (NYDA). This intervention is a youth-owned, micro-franchising project piloted in Mbekweni, Western Cape in 2019. The purpose and intent of the programme is to roll out a national youth-owned initiative owned through a cooperative business model to create and foster the next generation of entrepreneurs through structured interventions including incubation, coaching and mentorship, funding and after care support. The pilot project has revealed major challenges attributed to various factors impeding implementation as per the project plan.

(a) The DSBD set aside funding total value of R8 400 000.00 through the Cooperatives Incentives Scheme (CIS) to roll out the programme but only R1 800 000.00 was advanced to NYDA to invest in the pilot.

(b) The aim was to open fifteen Youth Cooperative Micro-restaurants, one hundred youth owning their own business through the cooperative’s model. However only one store in Mbekweni was piloted which had five co-operative members.

(c) The programme is currently halted as a review is being undertaken given the complaints received from other members of the cooperative.

(d) Out of a total of R1 800 000.00 that was advanced to the NYDA, R514 175.90 was spent and R1 285 824.10 was returned to DSBD and paid back to the National Treasury at the end of the 2020/21 Financial year as per Treasury Regulations.

2. (a) Assets were purchased in support of realising the pilot project which entail full kitchen equipment and delivery motor bikes.

(b) Assets purchased:

• Glass door underbar fridge.
• Anvil Axis Bain Marie- table top - 2 division.
• Anvil Axis Electric Double Pan Fryer (8kg).
• Munaaz e-cool  Double Glass Door Beverage Cooler.
• Munaaz e-cool Single Door Chest Freezer.
• Munaaz Double Bowl Preparation Sink 1500x650x915h.
• Overhead Pre Rinse Spray includes mixer taps.
• Munaaz 500x650x900 h double 10 liter fryer - 18kw floor standing with oil bin.
• Munaaz 5 burner gas flat top grill table model: specifications weight: 78 kg dimensions: 900x650x300h.
• Munaaz 2 burner boiling table grade 430 full stainless steel design anti-clog burners 2.5 350X800X 900h.
• 2000x1100 Munaaz Stainless Steel sloped vent hood complete with removable Cycloflow grease filters and grease catchment drawers.
• 2 Motor bikes.

(c) The assets were utilised to operationalise the co-operative and have the café fully functional.

(d) Two delivery motor bikes were purchased.

(e) The DSBD is the custodian of the Braai Café in partnership with the National Youth Development Agency (NYDA) as the implementation agency through a Memorandum of Understanding signed in 2019. The Department plays a critical role in the conceptualisation and designing of dedicated programmes to facilitate youth entrepreneurship. In this regard, the Department has conceptualised and coordinated the Braai Café programme. The Department’s role includes monitoring and evaluating the programme, regularly providing reports on the effectiveness of the programme.

The National Youth Development Agency (NYDA), as the implementor of the project, plays an oversight role and has control over the assets. The NYDA has recently embarked on a site visit and confirmed that all the assets are still in existence. As part of the programme review process, the department is looking at a more sustainable model of delivery where assets will be fully utilised by beneficiaries supported under the programme.

The Department’s remedial action includes the following:

• A site visit undertaken in April 2021 to ascertain challenges the co-operative is facing in respect of governance, an in-depth analysis of problems and risk factors inherent in the implementation of the project;
• The status and continued viability of Mbekweni co-operative assessed. Dissatisfaction regarding the governance and conflicts amongst members were identified as major problems attributable to the non-functional business operations;
• A legal opinion has been sought affording parties availability and applicability of remedies in law; and
• The Department has embarked on a programme review process in order streamline the delivery model ensuring that the initiative is integrated within the DSBD portfolio programme offering.

MS STELLA NDABENI-ABRAHAMS, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

Reply:

a) The Department of Small Business Development (DSBD) has developed the Business Recovery Support Programme in response to the recent spate of public violence, looting and destruction of property in Kwazulu-Natal and Gauteng. The Business Recovery Support Programme focuses on uninsured small enterprises impacted negatively by the unrest, predominantly in KwaZulu-Natal and Gauteng provinces. The Programme caters for small enterprises that require funding for working capital (including stock), equipment (including delivery vehicles) and furniture, as well as fittings.

The programme offers financial support in line with the Blended Finance approach, which is a combination of a grant (60%) and a loan (40%). The interest rate on the loan component is limited to 5%. There is an initial payment moratorium of up to maximum of 12 months for small enterprises in KwaZulu-Natal and Gauteng; and six (6) months for other Provinces. The repayment period of a maximum of 60 months applies. Maximum funding available per entity is R2 million.

The DSBD also has the Township and Rural Entrepreneurship Programme (TREP), which offers financial and non-financial support to rural and township enterprises. This programme has been in existence before the looting that occurred in KwaZulu-Natal and Gauteng provinces in July 2021. The aim of the programme is to support SMMEs and co-operatives in order to revitalise and improve the economy. The SMMEs that were affected by the looting may also apply for the TREP support.

Furthermore, the DSBD and its entities (Small Business Development Agency [Seda] and Small Business Finance Agency [sefa]) has the Informal Traders Support Programme that is aimed at supporting informal and micro businesses in the informal sector that were affected by looting. The Programme provides business focused support (financial and non-financial) to informal businesses. The Programme will support 17 667 entrepreneurs at R3 000 each (as a once-off grant).

In addition, and linked to the Programmes outlined above, Seda provides Business Development Support (including pre and post investment support), which includes development of business plans where necessary, financial management training, and other business support related aspects.

b) Applications by businesses that were affected by the looting are currently being processed by sefa. These businesses affected by the looting, based in Kwa-Zulu Natal and Gauteng North and South at large, are open to apply for the programmes offered by the Small Business Portfolio (the DSBD, Seda and sefa).

However, the table below outlines the applications received so far at sefa KwaZulu-Natal and Gauteng Regional Offices that are currently being processed:

REGIONAL OFFICE	KWAZULU-NATAL	GAUTENG SOUTH	GAUTENG NORTH	TOTAL
Total number of applications received	30	10	19	59
Total value of applications received	R30 000 000	R9 700 000	R8 100 000	R47 800 000
Total number of applications being processed	13	5	3	21
Total value of applications being processed	R15 500 000	R2 593 000	R1 500 000	R19 593 000

MS STELLA TEMBISA NDABENI-ABRAHAMS, MP

MINISTER FOR SMALL BUSINESS DEVELOPMENT

Reply:

(a) As the honourable member might be aware that all Cabinet Ministers serves in their portfolios at the behest of the President.  The acting period remains the prerogative of the President.

(b) I continue to execute and fulfil my responsibilities as Minister for Small Business Development as detailed in my Performance Agreement with the President and both the Strategic and Annual Performance Plans whilst also acting as the Minister in The Presidency.

Thank you

Reply:

Government through the Department of Communications and Digital Technologies is in the process of developing the Digital Economy Master Plan, which will look into the entire digital ecosystem, including the digital core, infrastructure, technologies and services. Government is approaching digitisation in a holistic rather than on a piecemeal approach as suggested in this question. The Department of Small Business Development is part of the Team lead by DCDT on the Digital Economy Master Plan with a definitive focus on its impact on SMMEs and Co-operatives.

Furthermore, enhancing access requires affordable pricing mechanisms based on telecoms policies that reflect wide digital network and sound broad band strategies, specifically reaching remote areas such as townships, rural areas, and villages. Small enterprises based within the afore-mentioned areas may not necessarily have access to same digital environment. In this regard, the DSBD is in collaboration with the Department of Communications and Digital Technologies (DCDT) whose mandate is to ensure provision of inclusive communications services. The partnership with the Department of Communications and Digital Technology (DCDT) is positioning the SA Entrepreneurship Ecosystem for the digital change and transformation through the investment in needed infrastructure like broadband fibre connectivity to all support hubs (Incubators, Accelerators, Centres for Entrepreneurship Rapid Incubator [CFERIs], Township and Digital Hubs) and high end computing and Rapid Prototyping facilities (3D printers, scanners, CNC and Laser cutting equipment) as shared facilities in all our TVET and University based CFERIs and new Digital Hubs.

The Department is also finalising agreements and engaging various stakeholders in the technology sector for the provision of supporting technological services and offerings to innovate and transition SMMEs and Cooperatives into the Digital era.

On the ICT side, Seda supported 13 Tech base Incubators and Accelerators and established 22 youth based CFERIs in underserviced TVETs and Universities in the 2020/21 financial year to the drive that transformation and support to Tech Start-ups to help build local technology solutions to solve both Social and Industry challenges.

The 13 Tech Incubators have recorded the following performance results in 2020/21 FY:

• 303 Tech Start-ups and SMMEs were supported.
• R49 284 220.16 in revenue was generated by the start-ups and SMMEs in portfolio.
• 441 of the total ICT related jobs in 2019/20 FY were sustained.
• 676 new jobs were created.

As part of our vision for township and rural economies in the digital sector Seda has established four (4) township based hubs in Mabopane in Tshwane, Kraaifontein in the Western Cape, Mogwase in the North West, and Thembalethu in the George. The new hubs will focus on building start-ups in the Gaming, Animation, E-Sports, Coding and Data Science, 3-D Printing, Hard and Software development, robotics, and Electronics. The hubs have taken in their first start-up cohorts in the fourth quarter of the 2020/21 financial year.

These hubs will be supported by the 6 new Digital Hubs that are positioned to lead SA charge in the 4IR space. The new Digital Hubs will endeavour to create start-up and digital business that can compete in local, regional and international markets while remaining locally relevant. The hubs will render support to young Grassroots innovators and start-ups providing needed shared infrastructure, industry collaborations, Enterprise supplier linkage, access to funding at pre-seed, seed and series A and B funding, private sector investor linkage. Also, the hubs will build firm level teams, revenue or paths to revenue, high touch mentoring and coaching aimed at building strong leadership, disruptive, scalable and smart business models poised for Rapid growth in sectors like EdTech, Fintech, E-commerce, HealthTech, Water, Energy and Agri.

Seda is focusing its efforts and have also approved four (4) new University based CFERIs:

• University of Johannesburg, Soweto - will focus on building young tech start-ups in Artificial Intelligence and Blockchain
• Nelson Mandela Bay University - will focus on start-ups in new technologies in water, oceans economy and Electronic Vehicles and Battery technologies.
• University of Venda - focusing on new Hardware, software, IOT and AgriTech start-ups.
• Rhodes University – start-ups in the Creative Industry.

The new CFERIs will be fully established before the end of the current financial year (2021/22).

_________________________________________________________________________________

RESPONSE RECOMMENDED BY:

_______________________

MR LINDOKUHLE MKHUMANE

ACTING DIRECTOR GENERAL: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

DATE:

______________________________________________________________________________

RESPONSE RECOMMENDED BY:

________________________

MS ROSEMARY CAPA, MP

DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

_______________________________________________________________________________

RESPONSE APPROVED BY:

_________________________

MS KHUMBUDZO NTSHAVHENI, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

Reply:

The Department of Small Business Development (DSBD), through the District Development Model initiative, has held a series of discussion sessions across the Western Cape District Municipalities, engaging SMMEs and Co-operatives on various matters that have an impact on their businesses and also focusing on the interventions that the Department has to offer the small businesses with the view of assisting them financially and non-financially. The Deputy Minister of Small Business Development led some of these engagements, particularly in Cape Town.

The growing practice of gangs demanding protection fee, not only from small businesses but from businesses in general is a serious matter that Government as a whole is acutely aware of and is attending to it with the seriousness it deserves. The DSBD, through the Government Cluster system has supported for the Justice, Crime Prevention and Security (JCPS) Cluster to look into developing a holistic strategy to address this phenomenon; and this is a process that is currently underway. This process will assist in determining the full impact of this specified practice on South African businesses, especially small businesses.

_______________________________________________________________________________

RESPONSE RECOMMENDED BY:

_______________________

MR LINDOKUHLE MKHUMANE

DIRECTOR GENERAL: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

DATE:

______________________________________________________________________________

RESPONSE RECOMMENDED BY:

________________________

MS ROSEMARY CAPA, MP

DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

_______________________________________________________________________________

RESPONSE APPROVED BY:

_________________________

MS KHUMBUDZO NTSHAVHENI, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

Reply:

The Department of Small Business Development has designed and implemented the SMMEs Debt Relief Facility to assist small business that were impacted negatively by Covid-19 pandemic. This main aim of this intervention was to protect the investment already made in the businesses involved, save jobs and prevent business closure.

To ensure that the Facility is executed efficiently and in a transparent manner, numerous control measures were put in place. These measures include heightening awareness about the Facility by publishing information, including the funding criteria on the websites of the Department and its agencies, Small Enterprise Development Agency (Seda) and Small Enterprise Finance Agency (sefa); and issuing of press releases. Furthermore, the information on all funded beneficiaries was published on the DSBD website for the consumption of the members of the public.

The SMMEs Debt Relief Facility was also subjected to an audit process. The audit performed by the independent auditors (Sizwe Ntsaluba Gobodo) awarded the Facility an unqualified audit opinion. In light of the above, the Department can provide a reasonable assurance that the principle of transparency and fairness were upheld in rolling out the SMMEs Debt Relief Facility.

_________________________________________________________________________________

RESPONSE RECOMMENDED BY:

_______________________

MR LINDOKUHLE MKHUMANE

ACTING DIRECTOR GENERAL: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

DATE:

______________________________________________________________________________

RESPONSE RECOMMENDED BY:

________________________

MS ROSEMARY CAPA, MP

DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

_______________________________________________________________________________

RESPONSE APPROVED BY:

_________________________

MS KHUMBUDZO NTSHAVHENI, MP

MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

Reply:

The Department of Small Business Development (DSBD) did not have any work exchange programme with the Republic of Cuba and has not employed any Cuban Nationals. There are no plans in the pipeline in this regard.

1. Not applicable.
2. Not applicable.

_________________________________________________________________________________

RESPONSE RECOMMENDED BY:

_______________________

MR LINDOKUHLE MKHUMANE

DIRECTOR GENERAL: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

DATE:

______________________________________________________________________________

RESPONSE RECOMMENDED BY:

________________________

MS ROSEMARY CAPA, MP

DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT

DATE:

_______________________________________________________________________________

RESPONSE APPROVED BY:

_________________________

MS KHUMBUDZO NTSHAVHENI, MP

MINISTER FOR SMALL BUSINESS DEVELOPMENT

DATE: