Questions and Replies

Reply:

1. Yes the person (name furnished) has shares in the company mentioned and the company is the service provider of the Gazelles Programme. The person concerned has 40% shares in the company concerned which are in the process of being disposed.
2. There was no expenditure for 2014-15 financial year. For 2015-16 financial year the department incurred the costs to the tune of R22 085 000.00 towards the implementation of the programme, broken down into the following expenditure items:

Reply:

The department does not have a contract with Kohwa Holdings but a memorandum of understanding (a) All 12 Cooperatives have received services from Kohwa Holdings at various levels and (b) Each Cooperative has received grant funding to the tune of (i) R 350 000 and (ii) the company received R35 000 per cooperative which is R35 000 X 12 = R 420 000-00 from (aa) the Cooperatives Incentive Scheme and/or (bb) No support from other budgets  since 1 April 2015  

(2)   what is the (a) detailed breakdown of the costs of implementing the agricultural plans for each of the co-operatives and (b) company’s fees for providing services to the co-operatives;

       Reply,

For each of the 12 Cooperatives the total amount of R350 000 per cooperative was spent as follows:

Wayhans Group which supplied Irrigation Scheme
Description and Deliverables	Qty	Excl	Total Amount
Main pump diesel pump/generator combo	1	96 150	96 150
PVC main line, elbow,t-fittings, PVC cement	1	30 700	30 700
Fertigation unit and 20 foot container with	1	42 167.2	42 167.2
Galvanised steel 50m3 resevoir tank	1	47 624	47 624
Drip network	1	44 341	44 341
Valves links	1	10 495	10 495
Transport	1	3760	3760
Installation and engineering supervision	1	-	-
	Sub Total	275 237.7	275 237.7
Wayhans Group which supplied fencing material
Description and Deliverables	Qty	Excl	Total Amount
110m x 110 x 1.8m high bonnax fencing roll	5	4 700	4 700
100mm gum poles & accessories included	159	9 620	9 620
Gumpoles stays 75/100/1.8m	18	990	990
Fence U-tack	9	1 170	1 170
Rolls of fence wire galvanised 2.5mm 130m	9	2 430	2 430
Bags cement & balast	62	3 952	3 952
Gate	1	3 500	3 500
Labour	1	10 500	10 500
Transport	1	2 900	2 900
	Sub Total	39 762	39 762
Kohwa Holdings
Sweet corn seed	1	1210		1210
Spinach seedling	1	515		515
Beetroot seedling	1	1246.7		1246.7
Cabbage seedling	1	650		650
Soil preparation	3	1500		1500
Fertilisers	3	1950		1950
Chemicals	3	3759		3759
Lime treatment	3	9 171		9 171
Project Management	1	14 998		14 998
	Sub Total	35 000		35 000
	Grand Total	350 000		350 000

 

 (3)  whether the company has provided her department with a full breakdown of (a) monies spent and (b) services delivered to each of the co-operatives during the specified period; if not, in each case, why not; if so, in each case, what are the relevant details?NW2522E

Reply

The department has undertaken a post disbursement inspection as per the standard procedure to follow up and verify if all approved items have been delivered to applicants and are in order and functional. During the follow up visits, it was established that most of the items approved and paid for by the department were not delivered to almost all the 12 cooperatives. The department is in the process of commissioning a full investigation into the 12 cooperatives to ascertain the reasons for the non-delivery of the items referred to above.

Reply:

(1) The process to finalise the appointment of the new Chief Executive Officer (CEO) of the Small Enterprise Development Agency (Seda) was delayed by the consideration of change management and transition within and between the department and Seda. The department was of the view that the transition processes needed to be finalised before a new CEO was appointed. Moreover, the sudden departure of the Acting CEO back to the Department of Trade and Industry necessitated that the environment be stabilised within Seda before appointing a new CEO.

(2) Yes, Ms Mandisa Tshikwatamba was the best candidate for the position as per the recommendation of the selection panel which I fully supported and subsequently endorsed her appointment as the Chief Executive Officer of Seda.

Reply:

(a)(i) The Chief Financial Officer (CFO) at the Department of Small Business
evelopment has a Bachelor of Accounting Science degree obtained at the University of South Africa. The CFO has also attended an African Leadership Programme at the University of the Witwatersrand.

a)(ii)Not Applicable.

b)(i)The Director General of the Department of Small Business Development obtained the following qualifications:

▪ BA. Social Science,
▪ BA Social Science (Hons),
▪ M. Social Science,
▪ M.ED (Bristol, UK),
▪ Senior Executive Programme (Harvard-Wits)
▪ International Organisational Systems Development (Gestalt) Programme.

b)(ii)Not Applicable.
 

Reply:

(1) The HOD signed a performance agreement (PA) for the 2016/2017 performance management cycle. The PA was signed and submitted to the Department of Performance Monitoring and Evaluation within the due date.

(a) N/A. There is one HOD and she was compliant

(b) N/A. The HOD was compliant

(c) N/A. The HOD was compliant

(d) N/A. The HOD was compliant

  (i) The last assessment that was conducted for the HOD was for the period 23 September 2015 until 31 March 2016 at the Department of Small Business Development (DSBD) – The Director General was appointed in the Department of Small business Development on 23 September 2015.

  (ii) The outcome of the assessment at DSBD: 142%, Above Expectation. The employee will qualify for notch progression on condition that the following requirements were met:

• Submission of her Performance Agreement at the beginning of the cycle by the due date (this must be confirmed and relevant documents must be submitted by the previous Department); and
• The submission and moderation of her first bi-annual appraisal (must be confirmed and relevant documents must be submitted by the previous Department).

No outcomes have yet been processed for the HOD by the DBSD. Also, the HOD will not be paid a cash bonus, since the DPSA has not yet issued any directive for HODS in respect of this matter.

(2) No. The HOD was compliant with submission of performance agreement and no performance bonus has been received since appointment.

(a) N/A

(b) N/A

(3) The HOD has not received a performance bonus since her appointment at the DSBD.

The HOD for DSBD did sign and submit her 2015/2016 and 2016/2017 Performance Agreements. No outcomes have yet been processed (see response at Question (1) (d) (ii)).

(a) N/A

(b) N/A

Reply:

(1) How many jobs did her (a) department and (b) the agencies reporting to her directly create in the South African economy in the (i) 2014-15 and (ii) 2015-16 financial years;

(a) Jobs supported through Department Incentives Programs

Program	Number of Jobs Supported	Total
	2014-15	2015-16
Corporative Incentive Scheme ( CIS)	1359	1542	2901
Secondary Marketing Corporative Incentive Scheme ( SMCIS)		330	330
Black Business Supplier Development Program (BBSDP)	10425	11217	21642

 (b) Jobs supported by agencies

Program	Number of jobs supported	Total
	2014-15	2015-16
SEDA Provincial Network	2099	2696	4795
Incubation Programme	Permanent jobs	2035	2331	4366
	Temporary jobs	1283	1055	2338
Sefa ( created and sustained)	60 169	157 417	217 586
Grand Estimated Total			253 958

 

(2) What mechanisms are in place to ensure that a job that has been created is sustained beyond the year in which it was created;

For the department the employment figures are captured during receipt of an application and approval stage and are verified when the clients are being interviewed by the staff. This process is conducted when the unit performs site visits to verifiy the existance of the business, interviewing the clients about the interventions applied for and as well as the content of the information as captured in the application forms.

Sefa’s funding to repeat clients has gained traction in recent years, both among its direct lending and wholesale lending clients (the latter being financed through the micro finance institutions (MFIs) and retail finance institutions (RFIs). To this end, each year, sefa captures information on both new jobs as well as jobs maintained as a result of their repeat clients.

Seda provincial network uses the client journey approach whereby clients receive more than one intervention over an agreed period of support which results in a greater impact on the growth and development of a business. To track the progress and impact after completion of an intervention, Seda conducts an improvement assessment. The business incubation programme is supportive of SMMEs by design and as such SMMEs in the programme are nurtured to continue to grow and hence sustain the jobs created.

(3) What were the gross tax revenues raised and gross addition to South Africa’s Gross Domestic Product directly resulting from the creation of these jobs?

For the Seda Provincial Network, out of a sample size of 841 improvement assessments for the 2014/2015; the clients realised a combined increase in turnover of R230 888 275,00. This sample is from a population of 10,697 clients that were assisted during the financial year.

Out of a sample size of 909 improvement assessments for the 2015/2016; the clients realised a combined increase in turnover of R398 531 287, 30. This sample is from a population of 10,679 clients that were assisted during the financial year.

For the Seda Incubation Programme, for the 2015/16 financial year, the incubation programme recorded a total turn over for the 1 650 supported SMMEs of R 605 908 829

For 2014/15 FY, the SMMEs supported under incubation programme generated a total of R488 980 979.

The department and sefa does not have information pertaining to its client’s tax revenues

 

NW1258E

Reply:

(a) The total amount budgeted for the National Gazelles Programme for the year 2015-16 is R R 22 085 000.00

(2) What (a) amount has been budgeted for the specified programme in the 2016-17 financial year and (b) is the breakdown of how the specified budget will be spent;

a) The total amount budgeted for the National Gazelles Programme for the year 2016-17 is R R 20 300 000.00

(3) What are the names of the selection panelists who are responsible for evaluating the applications and making the final selections in each province?

Province	Institution	Representative
Free State	SEDA	B Mshumpila
		Jackie Ntshingila
	Free State Development Corporation	Mafee Mokhethi
	Ernst Young	JJ du Toit
		Barry Fichardt
	Mangaung Chamber of Commerce & Industry	Samuel Galela
	Traction	Karen Kuhlcke
Limpopo	SEDA	Peter Maredi
		Koenie Slabbert
	Limpopo Economic Development Agency	Karabo Kolobe
	Limpopo Business Forum	Nady Thelele
Eastern Cape	SEDA	Zuko Somtunzi
	Mtiya	Zukile Nomafu
	Eastern Cape Development Corporation	Zoliswa Mnqokoyi
Mpumalanga	SEDA	Ntokozo Majola
	National Empowerment Fund	Kgaugelo Sibiya
		Bongani Qokose
	SEFA	Sabelo Mamba
	Lowvelt Chamber of Business & Tourism	T Welem
Kwa-Zulu Natal	SEDA	C Mnguni
	Ithala	Mzondo
		R Naidoo
		D Gpapal
	Success Avenue (ED Expert)	B Ntlabathi
	Kingdom Estate (ED Expert)	E Nhliziyo
Gauteng	SAICA	Mandisi Nombembe Puseletso Modimogale Sabelo Qupe
	University of Johannesburg	Dr Pule Kholopane
	Business Place	Udesh Sewrpersad
		Shaun Govender
	Small Business Development Institute	KB Motlhoioa
		C Kadlodlo
		C Kujekwga
		Thabo Sebeko
		Charles Madzindu
	Industry Experts	I Neethling
		R Kalain
		John Francis
North West/ Northern Cape	SEDA	Mr maimane
		M Moseki
	North West Development Corporation	WJ Wanzi
	Industrial Development Corporation	K Magan
Western Cape	SEDA	Alex Qunta
		Ivor Hendrics
		Kiewit Mhlongo
		Matthew Bertram
	SEFA	Zandile Nyawo
	Anglo Zimele	Portia Zilwa
		Bonita Daniels
	SAP Tradeworld (ED Expert)	Paul Hills
	AEDL (ED Expert)	Mike Klink
	Klop Accelerator (ED Expert)	Guy Harris
	McKellar & Associates (ED Expert)	Ralp McKellar
	SAGE WIZE (ED Expert)	Jean Van Der Merwer

NW1257E

Reply:

(a) At this stage the sefa board has approved the framework for the sale of the transfer to the tenants. The salient features of the framework are that the properties will be transferred to the initial group of tenants that were promised transfer of the properties.

(b) The properties will be sold at market value and will either be a cash sale or financed by sefa through an Instalment Sale Agreement over 60 months. The properties will only be transferred to tenants who carry out business activities in the Industrial Parks.

(c) The framework has been communicated to Gauteng Province Industrial Parks Association (GAPIPA) and sefa has met with the leadership to give an overview of the framework.

 

Reply:

Yes, All Ministers enter into Performance Agreements with the President.

(a) The Performance Management Framework for Ministers is the Medium Term Strategic Framework (MTSF) for 2014-2019, which is the first 5-year implementation plan of the National Development Plan (NDP) 2030. The performance targets and indicators are derived from the 14 Outcomes which government seeks to achieve.

These outcomes and targets constitute governments Programme of Action (POA), against which performance is tracked and reported at least on a quarterly basis. POA reports are publicly available on government’s websites.

(b) to (e) Cabinet closely monitors the implementation of the NDP 2030/MTSF 2014-2019 through POA Reports. These reports tabled before an Implementation Forum of a Cluster of Ministers collectively responsible for MTSF outcomes, and then submitted to Cabinet, where progress is noted, bottlenecks to implementation are discussed, and recommendations to address bottlenecks are considered and approved.

Reply:

1. (a-d) Minister has not earned any additional income from business and, is not doing any business with the Government.

2. (a)      No

    (b)      No

    (c)      No (i - iv) No, as stated above.

Reply:

1. The purpose of the review is to determine the money spent, by government on Small Medium and Micro Enterprises and the impact thereof. This will be done in order to ascertain the effectiveness government programmes and to improve interventions going forward.

2. However, the Department of Small Business Development has just recently, 1 April 2016, established its Policy and Research Branch. This component in conjunction with the relevant stakeholders, in the focus of developing the research agenda that will inform the policy formulation within the Department of Small Business Development. Given this fact, no timeframe has yet been formulated for the review in question and it is also dependent on the available resources within the Department of Small Business Development. With this in mind and the multi-faceted nature of the review it is safe to say that the Department will take a phased approach to implementing the said review.

3. It is reasonable to assume that the review will consider the value of investment by Government and impact thereof. It might be difficult to determine the total universe of private sector investment, however it will be borne in mind in the planning of the review.

Reply:

(a) Table A & B below depicts the following questions ; (a), (i) , (ii), (aa) , (bb)

Table A : Existing DSBD Programs

Name of Program (a)	Brief Description of the Program (aa)	Target Group (i) and Budget (bb)
Informal and Micro Enterprise Development Program ( IMEDP)	The Informal and Micro Enterprises Development Programme is a 100% grant offered up to R80k to informal and micro enterprises to assist them in improving their competitiveness and sustainability in order to become formal businesses and part of the mainstream economy with turnovers from R1k to R200K and Eligible entities can receive up to R 80k	(i)Informal and Micro Enterprises (bb) R 65m
Shared Economic Infrastructure Facility (SEIF)	The programme is a 50:50 cost-sharing grant made available on a reimbursable basis, where DSBD makes a contribution of 50% towards the qualifying infrastructure project upon the completion of agreed milestones. The programme is capped at a maximum grant of R5 million (VAT inclusive) per qualifying applicant.	(i)Informal and Micro Enterprises (bb) R 30m
Black Business Supplier Development Program (BBSDP)	The program aims to leverage the competitiveness of black owned enterprises through the provision of machinery, tools, equipment’s and business development services. The program provides a R1 million grants which is broken into a maximum of R800 000 for tools, machinery and equipment and R200 000 for business development and training interventions per eligible enterprise.	(i)Small to Medium Size Enterprises, Established (ii) Cooperatives (bb) R 225m
Cooperative Incentive Program	The program aims to promote the development and competitiveness of sustainable co-operatives that promotes equity and greater participation by black persons, women, persons with disabilities and youth. The scheme provides financial support in the form of grants to co-operatives. The maximum grant that can be offered to one co-operative entity under the CIS is R350, 000-00 (three hundred and fifty thousand rands).	(ii)Primary Cooperatives both Start up and Existing (bb) R 75m
Secondary Marketing Cooperative Incentive Scheme (SMCIS)	The objective of the SMCIS is to assist secondary marketing co-operatives to provide specialised managerial services not available within the co-operative, such as quality control, logistical services, bulk-buying, marketing and other value-adding services to primary co-operatives and thereby unleashing their potential to achieve economies of scale, obtain fair market prices for goods and services. , comply with the relevant industry and market requirements and to increase profitability for members and thus contributing to the economic development and growth of the economy Eligible Secondary Cooperatives can receive up to R 10 million	(ii)Secondary Cooperatives (bb) Utilises the above of R 75m

Table B : DSBD New programs in Progress

Name of Program	Brief Description of the Program	Eligible Amount
Emerging Enterprise Development Program (EEDP)	The Emerging Enterprise Development Programme (EEDP) provides support to enterprises owned and managed by Women, Youth and/or People with Disabilities in order to increase their capacity to access economic opportunities and enhance their competitiveness. These enterprises are prioritised and supported to enable their meaningful participation and contribution to the economy through employment creation, poverty reduction and reduced inequality. Eligible entities can receive up to R 200k	(i)Micro and Small Enterprise run and managed by the designated grouping of either Women, Youth and People with Disabilities (bb) Once approved to utilise the BBSDP Budget
Enterprise Incubation Program	A programme has been designed with distinct elements to best respond to the specifications placed by firms in opening markets for enterprises in their supply chains. The program is being finalised and will provide support of up to R5 million	(ii)Cooperatives and (i)Small Businesses (bb) R 46m
The Gazelles Programme	The Gazelles programme is aimed at enhancing the development and growth of oriented enterprises and to select and provide a structured systematic blend of best practice support to 200 identified SMEs. Forty (40) of the 200 entities were identified as National Gazelles, being the primary focus cohort of high potential SMEs to benefit from integrated business accelerated programme. The programme is implemented by Seda and the selected technical partner. The National Gazelles programme implementation commenced in September 2015 after the official launch by the Minister of Small Business Development.	(bb) R40 Million

cc) The the above programs are designed to collate actual Job Creation Information on applications received by the Department .Historical Information on Jobs supported through the exisitng programs is captured and is depicted in the Table C below

Program	Number of Jobs Supported	Total
	2014-15	2015-16
Corporative Incentive Scheme ( CIS)	1359	1542	2901
Secondary Marketing Corporative Incentive Scheme ( SMCIS)		330	330
Black Business Supplier Development Program (BBSDP)	10425	11217	21642

Grand Estimated Total 24873

The Entities

b) The Small Enterprise Finance Agency (sefa) was established in 2012, with the primary mandate to facilitate access to finance and post investment support to Small Medium Micro Enterprises and Co-operatives. sefa primarily facilitates access to finance for SMMEs and Co-operatives that are unable to access finance via the formal financial channels such as the commercial banks and other financial institutions.

To facilitate access to finance, sefa administers the following loan programmes

• Direct Lending – via its 10 regional offices.
• Wholesale Lending – Partnership Loan programme whereby sefa partners with financial intermediary institutions, who on-lend to SMMEs and Co-operative Enterprises.

(aa) Direct Lending:

Direct lending channel provides funding to small businesses and co-operative enterprises operating in the formal sector of the economy. Funding is made available for start-ups, expansions, working capital requirements as well as business and asset acquisitions. Products offered are term loans, bridging loans, revolving credit, instalment sale agreement and non-financial support. SMEs can request loans ranging from R50 000 to R5 million.

(aa) Wholesale Lending:

The Wholesale Lending Programme partners with financial intermediaries to better service and reach a particular segment of the SMME market. To date, sefa has established and is managing Wholesale loan programmes with the following intermediaries:

• Microfinance Institutions and other partnerships for on-lending and business support to micro enterprises, mainly operating informally;
• Co-operative Financial Institutions (CFIs) to facilitate credit and savings mobilisation to enterprises in rural and peri-urban areas;
• Land Reform Empowerment Fund (LREF) to support small scale famers who are beneficiaries of governments’ land reform programme;
• Funds and Joint Venture, targeted to facilitate financing of business start-ups and growth in priority economic sectors such as mining, transport logistics, agriculture and to target groups such as women and the youth. Funds may invest in high risk instruments for a limited period of time depending on the development phase of the SME; and
• Credit Indemnity Scheme to indemnity financial institutions and suppliers who extend credit to SMMEs.

(bb) what amount has been budgeted and (cc) how many jobs will be created through the specified development programmes in the 2016-17 financial year?

Table 1: Outline of budgeted amounts (approvals) and estimated number of jobs to be created and sustained in 2016/17 FY.

Programme	(bb) Budgeted amount for 2016/17 (Approvals)	(cc) Estimated number of jobs (new & sustained)
Direct Lending: SME & Co-operative support	R229 million	817
Informal and Micro Enterprises	R97 million	69 300
Wholesale Lending: RFIs, Funds & JVs	R246 million	1080
Co-operative Enterprise Lending	R53 million	760
Credit Guarantee	R260 million	1905
Total	R885 million	73 862

SEDA

(b) Seda by virtue of its mandate is provides enterprise development support to small enterprises and cooperatives.

(aa) Seda provides business related information, advice, consultancy, training, technical interventions and mentoring services in all areas of enterprise development. These services aim at providing solutions related to various business functions from production to human resources, finance, marketing and export development. Rural enterprise development and cooperatives are supported through the Cooperatives and Community Private Partnerships Programme (CPPP). Through Stp, Seda also provides technology transfer, business and technology incubation services, as well as incentives for management systems implementation (such as ISO9001 and OHSAS 18001), product testing and certification.

(bb) R481,495 million for Seda, and R139,187 million for the Seda Technology Programme.

(cc) Seda aims to provide long term support, through numerous interventions to 10,830 small enterprises and 135 primary and secondary cooperatives. Approximately 35% of these are expected to see an increase in number of people employed.

Seda Technology Programme aims to support 2,235 clients through incubation support, technology transfer incentives, conformity and product testing, and systems implementation. Approximately 1,650 new permanent jobs are expected to be created by the programme through its interventions.

Reply:

(a) the dti worked in close collaboration with provincial agencies and the Development Bank of Southern Africa (DBSA) in conducting the assessment. In implementing the recommendations of the assessment six industrial parks were prioritized for revitalization and these are namely Seshego Industrial Park, Botshabelo Industrial Park, Babelegi Industrial Park, Isithebe Industrial Park, Queendustria Industrial Park and Vulindlela Industrial Park.

(b) The total budget allocated by the dti for the refurbishment of the industrial parks for 2015/16 was R 117 million and (i) for 2016/17 is R 70 million and (ii) there is no indication on the budget allocation for 2017/18 financial year.

2. Whether her department will ensure that provision is made in these parks for facilities for the incubation and support of small businesses; if so, what are the relevant details? NW1256E

The revitalization Programme is categorized into the following phases:-

Phase 1: Security infrastructure upgrade, fencing, street lighting, top structures and critical electricity requirements

Phase 2: Engineering designs and construction of new and existing roads, bulk water supply and sewage treatment plants or industrial effluent control

Phase 3: Upgrading electricity infrastructure, and build new top structures in line with the expansion programme of the Parks.

Phase 4: Development of sustainable industrial clusters in the Parks.

Most of the work that is still being undertaken on the industrial parks is still in phase 1 and 2, and the plan of the dti is to develop sustainable industrial clusters in all the parks.

Reply:

1. Whether the department was approached by any political party for any form of funding

     (a) In the

          (i) 2013-14: Not applicable to DSBD

          (ii) 2014-15: Not applicable to DSBD

           (iii) 2015-16: The Department was never approached.

2. Whether her department provided any form of funding to any political party in

     (a) In the

         (i) 2013-14: Not applicable to DSBD

         (ii) 2014-15: Not applicable to DSBD

          (iii) 2015-16: No funding was made to any political party.

Reply:

(a) The Department of Small Business Development

         (i) Advertising in 2015-16: R1 946 239.64 was paid during the 2015-16 as follows:

Item	Amount
Marketing	125 400.00
Recruitment	169 496.12
Promotional Items	1 651 343.52
Total paid	1 946 239.64

Promotional items include amongst others the following

• 2500 Self Guidelines Booklets and 2500 NIBUS Strategy Booklets design and printing, 150 non branded Casio Scientific calculators, and branded back packs for the Techno Girl Programme 2015, held in Durban at the International Convention Centre from 17-19 April 2015
• Design and production of IFAM and ASF catalogues, photo shoot, and 80 branded work suits. Minister Zulu visited women at the Vuyani market on the 20/05/2015, to help clean the area.
• White vinyl stickers for Mandela day event hosted by Minister Zulu in Pimville Soweto, on Saturday 18/07/2015.

      (ii) Budgeted for the 2016-17 financial year as per the ENE: R2.750 million or R2.8 million.

Reply:

(a) The joint private and public sector fund established by the private sector and Government under the auspices of National Treasury is a fund that is aimed at accelerating the scale-up of high-potential SMEs for jobs and growth. This fund will only address one part of the mandate which we call growth-focused support. The details of how the different departments will be involved in the establishment and operationalization of the fund are still being discussed by the parties.

(b) As mentioned in the President’s statement the focus of the fund is to provide “venture” capital-type funding and mentoring to the target groups, especially black entrepreneurs, Sefa does not provide venture capital funding but provides financial support through loans.

(c) The date of operationalizing the fund has not been finalised as the parties are still dealing with the details of setting up the fund and therefore it is envisaged that the dates will be announced once all systems are in place.

(2) whether her department will have an oversight function over the specified fund; if not, why not; if so, what are the relevant details? NW1798E

The parties are still in discussions regarding the operationalisation of the fund and as this fund’s mandate falls squarely on the Department of Small Business Development’s mandate the department will play a role in the fund.

Reply:

(a) The properties identified to be transferred to the tenants are located in Gauteng Province. sefa’s Board of Directors has approved a resolution to transfer the ownership of the properties to qualifying tenants. The preferred tenant representative organization, Gauteng Province Industrial Parks Association (GAPIPA) and OWIPA (Orlando West Industrial Property Association) and sefa are currently in discussion to formulate and agree on the process to be followed in transferring the ownership of the properties to the existing tenants.

The Township Industrial Parks are:

Industrial Park	Registered Owner
1.	Orlando West Industrial Park	sefa
2.	Atteridgeville Industrial Park 1	Tshwane Metro
3.	Atteridgeville Industrial Park 2	Tshwane Metro
4.	Sebokeng Industrial Park 1	Business Partners Ltd.
5	Sebokeng Industrial Park 2	Business Partners Ltd.
6.	Vuka Tsoga Industrial Park	sefa
7.	Mamelodi Industrial Park 1	Tshwane Metro
8.	Mamelodi Industrial Park 2	Tshwane Metro

(b) The transferring attorneys, Kokinis Inc. are currently in the process of transferring these properties to Khula Business Premises Ltd. (100% subsidiary of sefa), where these properties will be housed.

(c) This process is anticipated to be completed by September / October this year. Once this is done, sefa will commence with negotiations for the sale of properties to the tenants. The process of transfer of ownership to the tenants is being negotiated with GAPIPA and their respective affiliates currently.

It is important to note that these properties were not designed and developed with the intention to sell to individual tenants at the time. The cost of subdivision may end up being substantial. It is for this reason that sefa is engaging with tenants representative bodies and together try and ascertain the most suitable way to transfer the properties and also ensuring that all the tenants hold equity (ownership) equivalent to the square metres and portion(s) they are occupying / renting. The recipients (tenants) of the properties will be notified of the obligations, both financially and legally, of owning a fixed commercial property.

Reply:

Cost of South African Business Incubation Conference

1. (a) and (i) The total costs for staging the SA Business Incubation Conference was R 4 383 375 (ii) (aa) The department did not cover any costs for the conference (bb) seda contributed a total amount of R 3 479 379 to the conference ,the other agency sefa, reporting to the department did not cover any costs for the conference. (b) The conference organisers were paid R 259 850 to organise the said conference;

     2. Yes, sponsorship was raised, (a) the names of the sponsors are listed in the table below; (b) the amount paid by each sponsor is specified in the table below;

Sponsor Name	Contribution
Vodacom	R 400 000
Exhibition stands sold	R 482 000
New Generation Mindset	R 22 000
Total	R 904 000

Reply:

Question 1:

Whether she is aware of the dispute between Razoscan (Pty) Ltd and sefa as outlined in a letter to the Minister dated 14 March 2014 from the owner of Razoscan, Ms Mendiswa Mzamane. 

Reply: sefa is not aware of the letter or its contents by the said Ms. Mzamane to Honourable Minister Zulu. However, sefa would like to highlight the dispute with Ms Mendiswa Mzamane as follows:

Purpose of Razoscan (Pty) Ltd Transaction

The transaction was to export 15 (fifteen) containers of fruit (oranges known as Valencia) to one of the largest importers of fruit in Dubai, viz Floral Fruit LLC. Purchase orders were placed with Razoscan (Pty) Ltd in US Dollars for the fruit.

Stakeholders and Background

Razoscan (Pty) Ltd approached sefa for funding in February 2015 for loan facility of R3 200 000.00 (inclusive of Initiation fee & VAT) in order export of fruit (referred to as the “exporter”).

Floral Fruit LLC: large retail entity in Dubai (referred to as “the Importer”); who imports fresh fruit from most parts of the world. Clinched a deal with Razoscan (Pty) Ltd last year (2015) for Razoscan (Pty) Ltd to supply fresh fruit.

Cosmo Fruit (Pty) Ltd: a key player in the fruit industry in the Western Cape. An importer and exporter of fresh who was approached by Razoscan (Pty) Ltd to source fresh fruit from farmers in the Western Cape.

FNB: the commercial bank appointed by Razoscan (Pty) Ltd to overlook the flow of funds and proceeds resulting from the export of fruit.

N.B: Agreements are in place for the following: importer and exporter; exporter and fruit supplier; sefa/FNB and Razoscan (Pty) Ltd.

Background

After battling for over 5 (five) months to get all the required information to put together the deal, sefa’s Investment Officer presented the deal to sefa’s credit committee in June 2015. The deal was declined after sefa had followed its normal systems and procedures in the assessment of Razoscan (Pty) Ltd’s application for funding based on the following reasons:

Poor profitability

Ms Mendiswa Mzamane, the owner of Razoscan (Pty) Ltd, showing inability to carry out the transaction and lack of adequate expertise and industry knowledge; and poor backup and no financial strength to carry out the transaction for a start-up business in the highly competitive sector.

Ms Mendiswa Mzamane, the owner of Razoscan (Pty) Ltd, appealed the “decline decision” and presented her model where she indicated how she will mitigate the risk. She was afforded two meetings where she presented her model. One meeting was held at sefa’s Centurion Head Office (attended by key sefa internal stakeholders). The other meeting was held at IDC offices where she also presented her risk mitigating factors. Key sefa stakeholders attended the meeting. FNB, who are her bankers and key players in the transaction, attended all meetings represented by Mr Richard Harvey.

Razoscan (Pty) Ltd’s application was finally approved by sefa in July 2015. By then the following key areas formed part of the deal:

• Suppliers: the new supplier of the fresh fruit was Cosmo Fruit (Pty) Ltd – owned by Ioannis Ntinos. Ms Mendiswa Mzamane, the owner of Razoscan (Pty) Ltd had already changed suppliers three times. sefa had to conduct due diligence on all of the suppliers;

• FNB as the commercial bank of Razoscan (Pty) Ltd had to oversee the export transaction. A Collection Agreement was signed between sefa, Razoscan (Pty) Ltd and FNB, in order to regulate the flow of the transaction and to agree on the parties respective roles and responsibilities; and

• Fruit: at approval there was only one type of fruit to be exported namely, Valencia (oranges). The agreement with Floral Fruit was to export 15 containers but only 1 was shipped.

Approval of the Deal (see below – Approval and Disbursement of Funds)

Loan Structure

Loan Structure	Total Rand value	R2 868 000.00 (excluding fees)
	Term	60 days
	Grace Period	n/a
	Grace Type	n/a
	Interest rate	Prime 9.25 + 5.75% = 15%
	Initiation Fee	5% of Loan (incl. VAT) = R163 476.00
Description of Business	Fresh fruit exporter to Dubai (UAE)

Approved and Disbursed Funds

Cost of 15 Fruit Containers (inclusive of cost freight/inspection/insurance, etc) R2 868000.00

sefa initiation fee @ 5% (inclusive of VAT) R 163476.00

Total Loan Value R3 031476.00

Disbursement Status

Instruction to make Disbursement of the amount of R2 868 000.00 was given by sefa at the instance of Ms Mendiswa Mzamane, the owner of Razoscan (Pty) Ltd to FNB in October 2015 to release the payment to Cosmo Fruit who would then take the funds and secure fruit from the farmers. Cosmo Fruit was thus paid an amount of R2 868 000.00 to secure the entire fruit of 15 (fifteen) containers.

Update on Export of one container and the awaited proceeds:

Only one container was shipped by Cosmo Fruit (who also assisted with the freight and loading).

The importer’s bank has not honoured the payment for the one container due to error from FNB with regard - to the payment instructions. FNB send payment instructions that did not match those agreed upon and as a result of this error the importer’s bank will not pay.

 

Ms Mendiswa Mzamane, the owner of Razoscan (Pty) Ltd, has since instructed her bank FNB to amend the instructions.

It was later discovered that Cosmo Fruit (Ioannis) has shipped the wrong fruit i.e. class 2 instead of class 1;

Ms Mendiswa Mzamane, the owner of Razoscan (Pty) Ltd, alleges that Razoscan (Pty) Ltd has a dispute with Cosmo Fruit (Pty) Ltd which is owned by Ioannis Ntinos.

Question 2:

If not, why not.

Reply: sefa and Razoscan (Pty) Ltd have entered into a legally binding loan facility agreement or an amount of R3 031 476.00 on 17 September 2015 and the whole loan facility has been to date fully disbursed in terms of the provisions of the loan facility agreement.

Question 3:

(3) If so, what steps is the Minister taking to investigate (a) the causes of the dispute and

Reply:

 (a) sefa is not aware of the specific dispute referred to in the letter dated 14 March 2014; and

(b) Razoscan (Pty) Ltd is currently in breach of the provisions of the loan facility agreement and sefa is proceeding with legal action against Razoscan (Pty) Ltd as well as against Ms. Mzamane, as the surety for the obligations of Razoscan (Pty) Ltd, arising from the loan facility agreement. Currently the legal process is underway. In conclusion, sefa’s rights shall at all material times remain reserved to protect its interest.

Question 4:

If so, what steps is the Minister taking to investigate (b) Ms Mzamane’s allegations of corruption at sefa which she claims has impaired her company’s ability to fulfil its obligations to clients?

Reply:

• sefa is not aware of the nature of the corruption claims alleged and/or made by

Ms. Mzamane in the letter dated 14 March 2014;

• • sefa is not aware of any corruption relating to Razoscan (Pty) Ltd application for funding

and the transaction; and

• sefa therefore has no basis to institute any investigation into the matter.

Reply:

(1) (a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Moses Kotane Local Municipality in North West, the turnaround times for payment to small businesses have been reduced to the required 30 days period.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. However, in terms of Moses Kotane Local Municipality the by-laws are reviewed every two years.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement on turnaround times regarding complains on service delivery from 48 to 24 hours.

Reply:

Deputy Minister recently undertook official international travel as follows:

a) From the 14th to the 20th of February 2016.

b) To the United States of America (New York).

c) Deputy Minister was invited to participate as a Speaker/ Panellist at the 19th Wallstreet Project Economic Summit, and to attend special B2B networking sessions co-hosted by the African Economic Expansion Network and its affiliates. The Wall Street Project was established to secure equal opportunity for minority employees, consumers, and entrepreneurs. The project’s mission is to promote inclusion, opportunity and economic growth by encouraging public and private industries to:

• Provide more business opportunities for minority and women-owned companies on Wall Street and throughout the financial services industry
• Encourage more minorities to participate in corporate boards
• Allocate more capital to minority companies
• Promote intra-trade relationships among diverse businesses

The areas of focus of this summit were found to be relevant to the Department of Small Business Development’s objective of facilitating radical economic transformation through increased participation of small businesses and cooperatives in the mainstream economy.

Deputy Minister also met with the US Small Business Administration, which is responsible for providing support to SMME’s in the US for purposes of benchmarking. Further meetings were attended with various American corporates to explore opportunities of them investing in South African previously disadvantaged communities and enterprises.

d) The department has not received final invoices yet but the budgeted amount was R479 769.46 for all officials who travelled.

Reply:

The department has been engaging with Makhado Municipality Local Economic Development (LED) Office regarding putting plans together to initiate improvements to put proper sheltered stalls and related infrastructure for Tshakhuma Fruit Market vendors. The Shared Economic Infrastructure Facility (SEIF) has been identified as an appropriate instrument to be used to support this project. SEIF is an incentive for infrastructure support for informal traders, it covers the funding of common infrastructure that is either new, upgrading or maintenance and shared by a number of businesses. To date the department has assisted the LED Office to package the application which is expected to be presented to the SEIF Adjudication Committee seating scheduled to take place on 29 March 2016.

 

Reply:

1. The depatment has a list of small, medium and micro enterprises particulalry spaza shops in formally black townships and rural areas benefited from training and services through the Informal Traders Uplifment Programme (ITUP) during the 2015/16 financial year.
2. The list indicating beneficiaries of ITUP, broken down per province, district, municipality and town, and showing a breakdown of targeted groups is attached for reference by honourable KRJ Meshoe

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Moretele Local Municipality in North West, the turnaround times for payment of small businesses have been reduced to the required 30 days period.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. However, in terms of Moretele Local Municipality the by-laws are reviewed every two years.

(c) The current assessment did not consider the administration costs. But the reduction of Red Tape in each of the identified areas will lead to the reduction of costs in of turnaround times, improvement of communication on compliance will also reduce costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: The establishment of the Moretele call centre to receive, capture and provide status report on general community queries.

Reply:

(a) The Minister and the Department has not as yet engaged with conveners of the entrepreneur fund work stream emanating from the meeting in February between the President and business leaders. (c) The outcome of the work stream will only be known and considered once all relevant documents and information on the work stream is furnished to the department through the reporting channels.

Reply:

(1) (a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Ephraim Mogale Local Municipality in Limpopo, the Department is to consider the procedures and systems in terms of payment of SMMEs within 30 days as the prioritised red tape issue.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. However, specific to Ephraim Mogale, by-laws related to small business promotion are currently being reviewed.

(c) The current assessment did not consider the administration costs. However, the reduction of Red Tape in each of the identified areas will lead to the reduction of costs of the turnaround times, improvement on communication on compliance and also reduce costs experienced by SMMEs.

(2) Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement on the building plan approval processes. This also has a positive impact on reducing the costs experienced by small businesses related to building plans applications.

Reply:

(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Elias Motsoaledi Local Municipality in Limpopo, additional staff is allocated for the processing of invoices.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year.

(c) The current assessment did not consider the administration costs. But the reduction of Red Tape in each of the identified areas will lead to the reduction of costs of turnaround times, improvement on communication on compliance will also reduce costs experienced by SMMEs.

(2) Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement of building plans applications processes. This also has a positive impact on reducing the costs experienced by small businesses.

Reply:

1. (a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Greater Kokstad Local Municipality in Kaw- Zulu Natal, a committee has been established to handle all complaints within municipality.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year.

(c) The current assessment did not consider the administration costs. However, the reduction of Red Tape in each of the identified areas will lead to the reduction of costs on turnaround times, improvement of communication on compliance will also reduce costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: improved communication on business registration and permit issued on the same day if all documents are submitted.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Umzimkhulu Local Municipality in Kwa Zulu Natal, the turnaround times for payment of small businesses have been reduced to 20 days.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. In terms of Umzimkhulu the by-laws for informal traders are currently being reviewed.

(c) The current assessment did not consider the administration costs. However, the reduction of Red Tape in each of the identified areas will lead to the reduction of costs of the turnaround times, improvement of communication on compliance will also reduce costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement on turnaround times regarding land use management on land availability and accessibility.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Sol Plaatjie Local Municipality in Northern Cape, the intergovernmental relations will be improved regarding communication to small businesses.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: revisiting the mining sector to consider the legislative framework for small scale mining.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Khara Hais Local Municipality in Northern Cape, there is an improvement of infrastructure regarding the building plan approval processes.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: revisiting the mining sector to consider the legislative framework for small scale mining.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Matjhabeng Local Municipality in the Free State, access to information by the municipality to small enterprises will be improved.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. Informal business by-laws are currently being reviewed including the enforcement.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement on building plan application processes and approvals turnaround times due to committee established to consider these.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Maluti-A-Phofung Local Municipality in the Free State, access to information by the municipality to small enterprises will be improved.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. However, informal business by-laws are currently being reviewed including the enforcement.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: The improvement on by-laws related to tourism business promotion in the area as one of the sectors identified for local economic development.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Lukhanji Local Municipality in the Eastern Cape, access to information by municipality to small businesses will be improved.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. Informal business by-laws are currently being reviewed including the enforcement and conducting of information session workshops.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

(2) Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement on 30 days payment processes and approvals turnaround times due to establishment of the internal financial committee.

Reply:

(1)(a) The current plan of the Department of Small Business Development (DSBD) regarding the Red Tape Reduction Programme is to revisit the piloted municipalities to assess progress made in relation to the following: complaints notification system, 30 payment system, building plan approval processes, business registration permits, by-laws and communication of small business information to SMMEs and Cooperatives. Specifically for Buffalo City Metropolitan Council in the Eastern Cape, upgrading of traffic congestion measures of the Metro to help decrease traffic volumes as well as high accidents is the priority.

(b) There is no record of unnecessary (i) policies, (ii) by-laws and (iii) regulations rescinded in the specific municipality. The total number of policies, by-laws and regulations that impede the development and promotion of small businesses will only be outlined upon the conclusion of the proposed study on regulatory protocols affecting small businesses to be conducted by DSBD during the 2016/17 financial year. However, the informal business by-laws are currently being reviewed including the enforcement.

(c) The current assessment did not consider the administration costs. However, the improvement on turnaround times as well as communication on compliance will reduce Red Tape in each of the identified municipalities ultimately reducing costs experienced by SMMEs.

2. Some of the examples that can be referred to regarding how the red tape has been reduced include: improvement on 30 day payment and customer notification systems.

Reply:

The Department of Small Business Development (DSBD) does not have any frozen posts on the current establishment.

Reply:

1. (a) The Minister of Small Business Development received an invitation

from the CEO of the Women Forum for Economy and Society, Ms. Jacqueline Franjou, to attend the 11th edition of the Women’s Forum Global Meeting on the Economy and Society in Deauville, France.

The Minister of Small Business Development also received an invitation from Minister of International Relations and Cooperation (DIRCO) to attend and participate in the 11th Session of the South Africa- UK Bilateral Forum in London.

(b) The Minister of Small Business Development visited France and the United Kingdom in October 2015 respectively.

(c) In France, the Minister spoke at the 11th edition of the Women’s Forum Global Meeting where the Minister engaged with women from different parts of the world including; Minister’s and Deputy Ministers, high level female entrepreneurs and executives, global thought leaders and think tanks, financiers, and youth innovators, amongst others.

In London, the Minister met with Minister’s in the Economic Cluster from the United Kingdom and fellow South African Ministers, (as part of the official Bi-Lateral proceedings).

Minister also met with the UK Secretary of State for Business Innovation and Skills, Hon Sajid Javid and Ms. Baroness Scotland, Prime Minister Cameron’s Trade Envoy to South Africa.

Minister held a Business Breakfast Dialogue with Members of the South African Business Chamber of Commerce in the United Kingdom.

Minister also spoke at the Chatham House Business Round Table on the important role of SMME’s and Cooperatives in advancing economic growth and development.

(d) In France the meeting discussed the important role women play in entrepreneurship, and provided the South African and continental experience and perspectives as it relates to SMME development. Attendees were impressed at South Africa’s experience and strides made to integrate women into the mainstream economy through strong economic policies and institutions. This created an interest for some to consider using these best practices learnt from South Africa.

During the bilateral engagement, and as part of the Economic Working Group, discussions centred on the economic partnership between South Africa and the United Kingdom. Both sides agreed to strengthen relations in this regard, with specific focus on increasing the levels of trade and investment, particularly amongst SMME’s in high end productive sectors, such as ICT, services sector and Agro-processing, amongst others. Both sides adopted a Joint Communique which focused on strengthening strategic sectors, increasing as well as creating and strengthening regional value chains.

Both the Meetings with the UK Secretary of State for Business Innovation and Skills and Prime Minister Cameron’s Trade Envoy to South Africa focussed on strengthening relations between the two countries as it relates to SMME development. The key focus areas included partnership in skills development, and vocational training, particularly in ICT, and Infrastructure Development, amongst other sectors. Discussions also included identifying opportunities for both sides in critical sectors such as; manufacturing and advanced manufacturing, Green Economy, and services sectors amongst other high end productive sectors. Support was also leveraged for the Departments newly launched Centres of Entrepreneurship. In addition, discussions included possible exchanges with Universities and Technical colleagues on entrepreneurship development.

The Business Breakfast Dialogue (as arranged by BrandSA) with the South African Chamber of Business in London focussed on the role of the Department of Small Business Development, including its products on offer for SMME’s and Cooperatives. In addition, it included discussing possible mechanisms of increasing the levels of trade between the two countries, as well as possible support to South African companies operating in the United Kingdom, and those returning to South Africa. Lastly, the meeting focused on the importance of the partnership between government and the private sector in jointly working together to improve the economy as well as contributing to job creation.

The Chatham House Round-Table focussed on South Africa’s experience in the SMME and Cooperatives space against the background of the establishment of the Department of Small Business Development. Discussions also included garnering support for the implementation of the National Development Plan. In addition, the round table emphasised the importance of the private sector in economic development. South Africa also emphasised the importance of regional integration within the context of creating regional value-chains and increasing intra-African Trade, and thereby advanced support for Agenda 2063. Lastly, both sides noted that we face similar challenges – especially as it relates to SMME development, and agreed that it was important to share experiences to this end.

2. The total estimated cost of the trips is approximately R689 600.

Reply:

The Accumulated cost of the Co-Operative Incentive Scheme to the State are as follows:

(i) Since introduction by the Department of Trade and Industry:

Refer to Table 1 below. This depicts thedti CIS program data:

CO-OPERATIVE INCENTIVE SCHEME
Department	YEAR	NUMBER OF APPLICATIONS APPROVED	VALUE OF APPLICATIONS APPROVED	ESTIMATED NO OF JOB CREATED	VALUE OF DISBURSEMENT
Trade and Industry	2008-9	93	R 14 634 075	744	R 9 330 000
Trade and Industry	2009-10	224	R 47 345 447	1792	R 34 523 371
Trade and Industry	2010-11	235	R 55 228 903	1880	R 44 170 626
Trade and Industry	2011-12	182	R 47 824 520	1456	R 52 555 674
Trade and Industry	2012-13	314	R 85 323 599	2512	R 64 979 000
Trade and Industry	2013-14	243	R 62 331 729	1944	R 75 479 830
	Total A	1291	R 312 688 273	10328	R 281 038 501

Total Costs = R 281 038 501

(ii) Since its transfer to the department and (b) how many (i) co-operatives have been funded,

Refer to Table 2 below. The table depicts DSBD CIS program data

	CO-OPERATIVE INCENTIVE SCHEME
	Department	YEAR	NUMBER OF APPLICATIONS APPROVED	VALUE OF APPLICATIONS APPROVED	Estimated No of Job Created	VALUE OF DISBURSEMENT
	Small Business Development	2014-15	207	R 56 103 695	1656	R 64 965 564
	Small Business Development	2015-16 YTD	104	R 31 878 000	832	R 16 576 000
		Total B	311	R 87 981 695	2488	R 81 541 564
Grand Total	Total A + B	1602	R 400 669 968	12 816	R 362 580 065

(ii) How many of these funded co-operatives are still operative?

• Not all the funded projects have been visited after implementation of the interventions. Post investment support done on a sampling basis.

(iii) How many jobs have been created in each case?

The total estimate number of jobs created is illustrated in both table 1 & 2 above, The grand total is 12 816 .

Reply:

The Deputy Minister of Small Business Development has undertaken official international trips since January 2015.

The Deputy Minister of Small Business Development travelled to Sao Paulo, Brazil from 12 – 18 May 2015 to lead a delegation of women to participate at the 25th Global Summit of Women. The theme of the Summit, Creative Women – Creative Economies, underscored the innovation that women bring to the world’s economies. The Summit’s focus was on innovative and creative solutions by government, business and civil society to advance women’s economic status globally. Travelling with the Deputy Minister were her Official Companion, Head of Office and Assistant Administrator, and the total cost of the trip was R348 366.26.

The Deputy Minister travelled to the United States of America to lead two (2) delegations of SMMEs to the Atlanta Lifestyle Hub Show Atlanta, July Show, and the Santa Fe Folk art market in New Mexico from 07 – 10 July 2015 and 10 – 13 July 2015, respectively. In January 2014, the Department of Trade and Industry (the dti) launched the South African permanent showroom at the Atlanta Lifestyle Hub for South African high-end products. The main purpose of the permanent showroom is to expose products, including arts and crafts, of SMMEs and Cooperatives to the international markets. The Deputy Minister then proceeded to the Santa Fe International Folk art Market (SFIFM) which features master folk artists from 60 countries, and is proclaimed as the largest consumer market providing opportunities to traditional artisans to showcase handmade goods. The SFIFM provides a platform for traditional art manufacturers to sell their products to a niche market consisting of art galleries, museum, art collectors and antique curators. The Deputy Minister travelled with her Official Companion, Head of Office and Private Secretary at a total cost of R738 218.99

The Deputy Minister accompanied the Progressive Business Forum (PBF) SMME Trade Delegation to Instanbul and Ankara, Turkey from 26 – 31 July 2015. The primary objective of the PBF is to create of a platform of dialogue between the business community and Government. To this end, the PBF has hosted a number of international trade delegations which included countries such as the Democratic Republic of Congo, India, Vietnam, Mauritius, Tanzania, Cuba, Kenya, Sri Lanka, Brazil, China and more. In each case a Deputy Minister accompanied the delegation, and in this case an invitation was extended to the Deputy Minister of Small Business Development. The Deputy Minister travelled with her Private Secretary at a cost of R83 713.34. The Forum covered the Deputy Minister’s costs.

The Deputy Minister travelled to Maputo, Mozambique to attend the 51st Edition of Maputo International Trade from 29 August – 03 September 2015. Traveling with the Deputy Minister was a Media Liaison Officer, Official Companion, Head of Office and a Private Secretary, and the total cost of the trip was R238 730.45

Reply:

The Deputy Minister of Small Business Development has undertaken official international trips since January 2015.

The Deputy Minister of Small Business Development travelled to Sao Paulo, Brazil from 12 – 18 May 2015 to lead a delegation of women to participate at the 25th Global Summit of Women. The theme of the Summit, Creative Women – Creative Economies, underscored the innovation that women bring to the world’s economies. The Summit’s focus was on innovative and creative solutions by government, business and civil society to advance women’s economic status globally. Travelling with the Deputy Minister were her Official Companion, Head of Office and Assistant Administrator, and the total cost of the trip was R348 366.26.

The Deputy Minister travelled to the United States of America to lead two (2) delegations of SMMEs to the Atlanta Lifestyle Hub Show Atlanta, July Show, and the Santa Fe Folk art market in New Mexico from 07 – 10 July 2015 and 10 – 13 July 2015, respectively. In January 2014, the Department of Trade and Industry (the dti) launched the South African permanent showroom at the Atlanta Lifestyle Hub for South African high-end products. The main purpose of the permanent showroom is to expose products, including arts and crafts, of SMMEs and Cooperatives to the international markets. The Deputy Minister then proceeded to the Santa Fe International Folk art Market (SFIFM) which features master folk artists from 60 countries, and is proclaimed as the largest consumer market providing opportunities to traditional artisans to showcase handmade goods. The SFIFM provides a platform for traditional art manufacturers to sell their products to a niche market consisting of art galleries, museum, art collectors and antique curators. The Deputy Minister travelled with her Official Companion, Head of Office and Private Secretary at a total cost of R738 218.99

The Deputy Minister accompanied the Progressive Business Forum (PBF) SMME Trade Delegation to Instanbul and Ankara, Turkey from 26 – 31 July 2015. The primary objective of the PBF is to create of a platform of dialogue between the business community and Government. To this end, the PBF has hosted a number of international trade delegations which included countries such as the Democratic Republic of Congo, India, Vietnam, Mauritius, Tanzania, Cuba, Kenya, Sri Lanka, Brazil, China and more. In each case a Deputy Minister accompanied the delegation, and in this case an invitation was extended to the Deputy Minister of Small Business Development. The Deputy Minister travelled with her Private Secretary at a cost of R83 713.34. The Forum covered the Deputy Minister’s costs.

The Deputy Minister travelled to Maputo, Mozambique to attend the 51st Edition of Maputo International Trade from 29 August – 03 September 2015. Traveling with the Deputy Minister was a Media Liaison Officer, Official Companion, Head of Office and a Private Secretary, and the total cost of the trip was R238 730.45

Reply:

(1) The Incubation Support Programme is part of Economic Competitiveness Support Programme package which is under the dti. As such there is no dedicated budget line item that comes from National Treasury to the dti for Incubation Support Programme. The Department of Small Business Development is focusing on the Incubation Support Programme that is under SEDA and reviewing this instrument as part of the overall review of programmes that were transferred from the dti with the purpose of improving its impact.

(2) Yes, the Minister of Small Business Development is aware that sefa is working with certain large organisations. Small Medium and Micro Enterprises (SMMEs) regard market constraints and the inability to sell their products and services as one of the most serious obstacles to the starting of businesses and growth beyond mere subsistence level.

The responsibility of developing steps to overcome this constraint falls upon many different stakeholder groups: individual entrepreneurs, business associations, government and the private sector in particular large corporations. It is in this context that sefa has initiated a process to establish partnerships with the private sector (ie BHP Billiton, Hulamin and Amalgamated Beverage Industries) to facilitate access to Corporate South Africa supply chains and other opportunities for SMME development.

In terms of the partnerships, sefa has introduced an initiative called a Structured Financing Solutions (SFS), aimed at tapping on the expertise and opportunities in large corporations for SMME development. The SFS partnership is geared towards providing a seamless financial and non-financial intervention to a targeted group of SMMEs based on government economic policy enshrined in the Industrial Policy Action Plan (IPAP) and the New Growth Path (NGP). Therefore, the SFS is not an Incubator Support Programme but rather a programme initiative/ partnership with large corporate to unlock opportunities for small business development in their respective value chains.

 

Reply:

The Minister has read the Pricewaterhouse Coopers report on emerging companies recently released in Cape Town.

1. Overall, the report highlights initiatives that the department is already planning and implementing. For example, the report proposes that entrepreneurship should be taught from lower grades. This gives an impression that the authors are not aware of what government is doing in this regard. To be specific, the Department of Small Business Development works very closely with the Human Resource Development Council to implement recommendations of the Enabling Entrepreneurship Task Team, of which one of them is to introduce entrepreneurship education from Grade R to 12. This particular recommendation was approved by the Council of Education Ministers in 2014.
2. The report puts emphasis on partnerships by various stakeholders and the department agrees with this proposal. In fact, strategic partnerships with the private sector, State Owned Entities and the donor community are part of the strategic objectives of the department. As such the department has a clear plan to unblock the challenges faced by small businesses and co-operatives through implementing the following initiatives in line with the proposal of the PWC report indicated on page 97:

 (i) Increase the size of the procurement pie

The department is focusing on both the private and public sector’s procurement opportunities through using the Codes of Good Practice and the 30% set aside policy, respectively.

ii) Improve mentoring and networking structures to facilitate growth opportunities

The department, through the Small Enterprise Development Agency (Seda), is implementing a programme of improving the quality of advice provided to SMMEs and co-operatives through a partnership agreement with Switzerland’s State Secretariat for Economic Affairs (SECO).

iii) Closing the funding gap

The department is currently reviewing all funding instruments in order to identify gaps and improve the performance of funding institutions, in particular the Small Enterprise Finance Agency (sefa).

Rapid implementation and follow-up execution by Government

The department agrees with this recommendation from the PWC report and further states that additional budget would enable the department to move with speed in upscaling its plans.

v) Our history allows for increased entrepreneurial opportunity

The department has a bias towards rural and township enterprise development and this focus would allow for more previously disadvantaged entrepreneurs to participate in the economic mainstream.

Reply:

(a) The Minister needed to be familiar with the programmes that migrated from the Department of Trade and Industry (the dti) and to assess how these would be integrated to the new mandate prior to making any decisions. The Minister also had to interact with various stakeholders at national, provincial and local level to understand the needs of small businesses which will enable her to then appoint relevant people to Advisory Council.

(b) The National Small Business Act allows the Minister to appoint up to 18 Council members.

(c) At this stage, the breakdown of Council members has not been determined, however, the practice has been that a big representation of members is selected from the business community in particular individuals or business owners with experience of small business development.

(d) The panel will be made up of the Director-General and three senior officials from the department.

(e) The appointments will be announced as soon as all the processes of appointing the members are concluded.

(f) Council members shall be remunerated in line with fees stipulated for their designated level in the schedule of categories, sub-categories and official designations for officials who are not in full–time service of the state. The designated level for the National Small Business Advisory Council is Category A and Sub-category A1 as recommended by National Treasury. Remuneration for Sub-category A1 ranges between R3 232.00 per day and R4 344.00 per day depending on the designation for officials who are not in the full-time service of the state.

Reply:

(a) The Minister of Small Business Development has not had any engagement with the Minister of Labour about amendments to the Labour Relations Act, Act 66 of 1995, to alleviate burdens on small businesses in respect of exemptions from existing provisions on dismissing employees.

(b) The Minister of Small Business Development has not had any engagement with the Minister of Labour about amendments to the Labour Relations Act, Act 66 of 1995, to alleviate burdens on small businesses in respect of exemptions the extension of collective bargaining agreements to small businesses which were not party to the agreement in terms of section 32 of the specified Act.

The department, however, has established a task team at the National Economic Development and Labour Council (Nedlac) level to engage on small business policy issues. These however, are not related to the issues raised by the honourable member.

Reply:

(1) (a) (i) The travel costs, between Gauteng and Cape Town, of the Minister of Small Business Development amounted to R159,353.32 in the 2014-15 financial year.

(ii) The Minister undertook 19 trips between Gauteng and Cape Town in the 2014-15 financial year.

(b) (i) (aa) The Minister’s hotel accommodation in Cape Town amounted to R47,354.20 in the 2014-15 financial year. This amount was incurred before the Minister’s accommodation arrangements, through the Department of Public Works, were finalised.

(ii) (bb) The department did not incur residential accommodation costs for the Minister in Pretoria during the 2014-15 financial year.

(2) (a) (i) The travel costs of the Deputy Minister of Small Business Development amounted to R104,937.00 in the 2014-15 financial year.

(ii) The Deputy Minister undertook 19 trips between Gauteng and Cape Town in the 2014-15 financial year.

(b) (i) (aa) The department did not incur hotel accommodation costs for the Deputy Minister in Cape Town and Pretoria during the 2014-15 financial year.

(ii) (bb) The department did not incur residential accommodation costs for the Deputy Minister in Cape Town and Pretoria amounted during the 2014-15 financial year.

Reply:

(1) The Department of Small Business Development has not conducted a study of that nature. Conducting such a study would require a process of profiling foreign nationals. As things stand, the mandate of the Department of Small Business Development does not extend to collecting and analysing small businesses’ and entrepreneurs’ demographic information according to their countries of origin.

(2) There is no legislative basis providing for the Department of Small Business Development to register informal and small businesses according to their owners’ countries of origin.

(3) Following the outbreak of incidents of violence in January 2015, I conducted a series of beneficial discussions with leaders of various foreign nationals’ communities who are resident in South Africa and whose members were affected by the recent incidents of violence.

Alongside these, on 23 January 2015, I established an inter-departmental National Task Team on Violent Incidents Associated with Local- and Foreign-owned Informal and Small Businesses that I assigned to, among others: undertake broad-based consultations with representatives of affected persons and communities, relevant communities, and business interest formations, subject matter experts from different spheres and departments of government, and academic and independent researchers.

Moreover, on 24 April 2015, I was part of President Jacob Zuma’s delegation that conducted frank and in-depth discussions with a wider representation of foreign nationals’ communities who are resident in South Africa.

In all of the above instances, government and the foreign nationals’ representatives who were in attendance committed themselves to upholding the laws of the land as well as promoting social harmony among all.

In as far as the work of the inter-departmental National Task Team on Violent Incidents Associated with Local- and Foreign-owned Informal and Small Businesses is concerned; individuals and representatives of foreign nationals’ business interest formations from different countries have made representations.

Further, the National Task Team remains accessible to all informal or small business entrepreneurs who have been affected by the recent incidents of violence, or their business interest formations, and have the need to either make submissions to or representations before it.

(4) Currently, the Department of Small Business Development does not have intentions

to specifically design legislation to regulate and promote small businesses owned by

foreign nationals who reside in South Africa.

Reply:

The Deputy Minister and I, including officials in the department, did not travel to China in the 2014-15 financial year.

Reply:

(a) The Department of Small Business Development did not spend any amount on advertising in (i) Sowetan and (ii) Daily Sun since its inception.

(b) The Small Enterprise Finance Agency (sefa)

Sefa did not spend any amount on advertising in (i) Sowetan and (ii) Daily Sun in the (aa) 2012-13 financial year.

Sefa spent R45 280 and R48 963 on advertising in (i) Sowetan and (ii) Daily Sun in (bb) 2013-14 financial year respectively.

Sefa did not spend any amount on advertising in (i) Sowetan and (ii) Daily Sun in the (cc) 2014-15 financial year.

(b) The Small Enterprise Development Agency (Seda)

Seda spent R421 309.80 and R821 370 on advertising in (i) Sowetan and (ii) Daily Sun in the (aa) 2012-13 financial year respectively.

Seda spent R271 351.66 and R194 438.40 on advertising in (i) Sowetan and (ii) Daily Sun in the (bb) 2013-14 financial year respectively.

Seda spent R204 070.60 and R239 260.18 on advertising in (i) Sowetan and (ii) Daily Sun in the (cc) 2014-15 financial year respectively.

Reply:

(1) (a) The Minister has not formally met with the Simodisa Company. The Minister only met informally with the company on the margins of another engagement.

(b) The Department of Small Business Development has never had any interaction with the Simodisa Company.

Reply:

(a) The department is in the process of development a Township and Rural Economic Development Strategy that will be aimed at supporting informal businesses, SMMEs, Co-operatives, youth, gender, people with disabilities, and rural enterprises. The support will range from the provision of financial and non-financial support to the creation of an enabling legislative and regulatory environment.

Currently, the Small Enterprise Finance Agency (sefa) works closely with the Small Enterprise Development Agency (seda) in relation to government’s small business incubation programme called the Seda Technology Programme (STP). Seda is the custodian of the government’s incubation programme and provides incubating businesses with non-financial and affordable rental space. Sefa in turn, provides financial support in the form of working capital, asset financing and revolving loan facilities to qualify businesses in these incubation centres.

(b) Sefa, administers a property portfolio comprising a mixture of commercial and industrial properties in the provinces of Gauteng, North-West, Free State, Eastern Cape and the Western Cape. These are old properties that were inherited from the Small Business Development Corporation (SBDC), now known as Business Partners, and are located in townships and peri-urban areas and provide affordable industrial premises to manufacturing enterprises. As at 31 March 2015, sefa provided support to 958 entrepreneurs through its property portfolio. These are old properties which were

(c) The department, together with the Departments of Arts and Culture, Economic Development and Tourism, Sports and Culture, provincial investment promotion agencies and the South African Bureau of Standards work together to promote artisanal businesses using township creativity and talent. The National Craft and Design Coordinating Body (NCDCB), in which all the stakeholders mentioned are represented, monitors the implementation of the craft and design programmes at national and provincial level. The NCDCB also serves as a platform through which government departments and the provincial agencies coordinate the information on the craft and design programmes.