Hansard: NCOP: Unrevised hansard
House: National Council of Provinces
Date of Meeting: 22 Jun 2023
No summary available.
NATIONAL COUNCIL OF PROVINCES
THURSDAY, 22 JUNE 2023
PROCEEDINGS OF VIRTUAL NATIONAL COUNCIL OF PROVINCES
The Council met at 14:03.
The House Chairperson: Committees took the Chair and requested members to observe a moment of silence for prayers or meditation.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon delegates, before we proceed, I would like to make the following announcement. The virtual sitting constitutes the sitting of the National Council of provinces. Delegates in the virtual sitting enjoy the same powers and privileges that apply in the sitting of the National Council province. For purposes of quorum, all delegates who are logged on to the virtual platform, shall be considered present. Delegates must switch on their videos if they want to speak.
Delegates should ensure that the microphones on their electronic devices are muted and must always remain muted unless they are permitted to speak. All delegates may participate in the discussion through the chartroom. The interpretation facility is active. All delegates are requested to ensure that the interpretation facilities on their electronic devices are properly activated to facilitate access to the interpretation services.
Hon delegates in accordance with Council Rule 29(1) there will be Notices of Motion or Motions without Notice. Hon delegates, before we proceed to questions, I would like to take this opportunity to welcome the hon Minister of Small Business Development, hon Ndabeni-Abrahams as well as permanent delegates, MECs and all special delegates to the House.
Further, I would like to remind delegates that in terms of Rule 229 of the Council Rules, the time for reply by the Minister to a question is strictly five minutes. Hon Minister, time for reply is five minutes to the original question. Only four supplementary questions are allowed per question. A member who has asked the initial question will be the first to be afforded an opportunity to ask a supplementary question.
The time for asking a supplementary question is two minutes. The time for reply to a supplementary question hon Minister is four minutes. The supplementary question must emanate from the initial equation hon members. All the time the supplementary question must emanate from the initial equation. I now call hon Minister Ndabeni-Abrahms to respond to Question 119 asked by hon Rayi. Hon Minister.
QUESTIONS TO MINISTERS CLUSTER 4D - ECONOMICS
The MINISTER OF SMALL BUSINESS DEVELOPMENT: House Chairperson,
greetings to all the hon members on the platform. Hon Rayi thank you so much for the question. I just want to take you through a few programmes that we are doing in order to respond to the question that you asked. As the department we have a National Informal Business Upliftment Strategy which we call the Nibus. It clearly outlines our approach to the mandate in order to assist informal businesses to gradually meet the requirements for formalisation, in line with the needs of the informal businesses, their growth and that of their businesses.
Through Small Enterprise Development Agency, Seda informal businesses are being supported through the provision of business skills training, business infrastructure, as well as support to meet their regulatory or legislative requirements for operating formal businesses. Secondly, we do provide skills training and high impact empowerment of selected municipalities. As the department we are open to any proposals to collaborate with provinces, sector partners and selected municipalities in order to strengthen and improve the impact of the work that has been done in the selected municipalities.
As the department we have since the beginning of this current financial year, strengthened our regional and local economic development co-ordination are the directorate that leads those by increasing our staff establishment from six to 17 with eight posts still to be filled. The department has also in addition to its district champions, appointed 14 out of 18 district co-ordinators at assistant director level who are located within the selected districts. The key function of this directorate is the provision of support interventions to municipalities, in order for them to improve their local economy development strategies, as well as the capacitation of their local economic development, LED officials.
We do have an existing memorandum of understanding, MOU, between Seda and SA Local Government Association, Salga which covers various collaboration initiatives, including training of LED officers on and on some of the programmes that are run by Seda. This is aimed at empowering the LED officers to provide support to the small, medium and micro-sized enterprises, SMMEs and co-operatives. To date hon members, a total of 223 officials have been trained in the Eastern Cape. Mainly, the Eastern Cape municipalities have been very receptive to this programme because we rely on municipalities reaching out in terms of ensuring that their officials benefit from this programme.
However, we are working with other municipalities to roll out the programme nationally. As I indicated earlier, capacity building of the of the municipalities and the SMME ecosystem, generally is one of the key tenets of Seda district ecosystem facilitation. I would like to pause there Chairperson. Thank you so much.
Mr M I RAYI: Greeting to you House Chairperson and greetings to the Minister maFaku and thank you for the response. You covered my follow-up question but maybe I am thinking on my feet now. I would like to find out in terms of the policy
interventions that the department has and also the programmes that arise from those policy interventions, how does that department make sure that beneficiaries of such programmes get to know about them, particularly in townships and rural areas? Thank you so much.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Of course, at the centre of the work that we do is to create a conducive environment. Which means if we are talking about providing business development support to small businesses and co- operatives, we’ve got to make sure that there are policy interventions that you put in place. Earlier on, I made reference to the Nibus, which is one of the critical instruments that we utilise that clearly outlines building from what we had in terms of the informal economy symposium that we held in 2022, to say what kind of research proposals that we must put in place. But at the centre of that is the establishment of the focus group that we are going to be having our hosting on 29-30 June. That is on my birthday hon members. As we do this, it is because we are saying we want to make sure that we provide customised support to small businesses.
We recently issued the policy on funding for small businesses and co-operatives. This seeks to make sure that whatever interventions we are putting in place, we are targeting the right channels. We do provide awareness of our programmes through the partners that we have. Our agencies both Seda and Small Enterprise Finance Agency, Sefa do go out and engage publicly just like the department and ourselves as the ... [Inaudible] ... principals do. We do conduct radio interviews; we participate on social media. At times we are available for webinars for those that are taking interest.
We are calling upon hon members of this House also to ensure that they do partner with us in the engagements that they have with the public in their respective constituencies, so that the word out there on the work that we do can reach everyone in our country. Thank you so much hon Chair.
Ms H S BOSHOFF: Minister for the past few financial years, the department has regularly missed its own performance targets.
Most recently you were off the mark by an incredible 30%. Therefore Minister, how can we trust that any of the interventions would be successful if the department cannot even get its own house in order year after year. Thank you, hon House Chair.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Probably let me also clarify to remind the members that yes, indeed we have not managed to achieve 100%, but over the years we have never performed less than 70%. That does not mean that that’s the best performance. But in the areas where have not performed if you look at it, it would be ... [Inaudible] ... that we clearly came and articulated in terms of the interventions that we are bringing in order to address the challenges that we are faced with.
The other area where we did not perform was the area wherein we have spoken about amendment of the legislations. Because of the delays that we did not foresee and of course COVID-19 also playing his own part, we could not be able to finish those on time. We also lacked on one programme in terms of the co- operative support, which has been addressed recently. I am highlighting these because these are programmes that we’ve looked at and said, we’re not doing well here, what are the challenges and how would you then come together to address those.
Yes, we have not met all of them in terms of what the member is saying. But we did provide that one of the things that we do as the department is to say, if we had said we are going to provide hundreds of businesses with support, if we’ve provided to 90 businesses and we say let us say we have not performed on that. That is why we just don’t want to put ourselves on the yellow, but it doesn’t mean that there wouldn’t be anything that would be done. But we do appreciate hon member that you are correct to say that certain areas where we did not fully meet our targets. This is why I made reference to the interventions that we applied in order to make sure that this financial year we are not going to do that again. Thank you, House Chairperson.
Ms N TAFENI: Chairperson, greetings to the members and the hon Minister hon Minister the informal sector in South Africa has grown and is mainly represented by women who come from previously disadvantaged backgrounds, who often have to divide their time between work and caring for children. these women face a number of challenges such as lack of provision of child facilities as many times we see women selling on the side of the street with children, which should in reality be provided by the state.
Which intergovernmental initiatives has the Minister taken to provide childcare facilities to for women traders, as many times we have all witnessed women selling goods on the side of the street with the children clinging on to them. I thank you hon Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much hon Tafeni for that thoughtful question. But just to remind the hon members as per the presentations that we’ve made to Parliament, starting from our Medium-Term Expenditure Framework plan, our strategic plan document that we provided, we’ve never committed to building childcare facilities because of the resources that we have.
What we had committed to Parliament and the public of South Africa including the small businesses whether informal or formal, we had committed that we will in areas where municipalities come to the party, ww will be able to provide support to us shared infrastructure program, which is what we roll out for most of the informal and small businesses in most areas.
We have been to different provinces, we’ve built structures, were provided containers. Also, as I delivered our Budget Vote speech this year, I did talk to us establishing SMME markets wherein we’re going to be taking these groupings of small businesses, for them to operate in those areas. I even
committed funds that we’re going to provide. We said, at least about R14 million per the district that will be piloting in.
We identified seven districts just to remind hon members and then on top of that R14 million, for building of the market. We then said we are going to provide about R10 million for ensuring that we provide energy.
This is meant to ensure that all these traders that are trading in their respective areas that we would have identified, they trade in a very good environment. But at the centre of it is ensuring that we don’t take them away from the market. But indeed, hon members, I said the question is very thoughtful to say, when people go to work there must be childcare facilities. I do want to say that in Parliament, too. Thank you so much hon members.
Mr M DANGOR: Minister, this a pilot project and you looked at particular areas. Will you consider taking these particular areas to rural provinces in particular? Because I think the need is there more. A project that can be monitored by the Select Committee on a quarterly basis or six-monthly basis to ensure and to see how this is in fact developing. But the emphasis should be on rural provinces. Thank you very much Minister.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Indeed, we are
targeting at a rural-based towns and areas. We are reinforcing our efforts towards revising the township and rural economies. This is why we are saying for example, on the other scheme that we are providing, which looks at providing support to what used to be called the general dealers, to say let our people be able to trade wherever they are at. They shouldn’t be wasting lots of resources to travel to certain areas and therefore be met with conditions that are not favourable for them.
We are piloting in those areas. We just engaging with the provinces now because we don’t want to just come and impose. But the provinces are better placed to say in their plans they have these interventions that they are making in certain areas, and therefore where we are going to partner, these are the target areas. We’ve made it very clear that, that ought to be in the rural areas and the townships. Thank you, Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon House Chairperson and hon Londt, thank you for this important question. The department has conceptualised the power purchase product to assist Small, Micro and Medium Enterprises, SMMEs who have been adversely affected by the energy crisis. This product will assist SMMEs with a financing solution to acquire alternative technology to mitigate the impacts of load shedding on their businesses. While the power purchase product which is what you referred to as the energy relief package is not budgeted for, as the department, we have sought to reprioritise funds within the township and rural entrepreneurship areas, especially where we have not spent. We have made sure that we provide this and we are continuing to engage the National Treasury in order to see the need to approve this and if possible to add additional resources.
We did outline during our Budget Vote that we are setting aside for as I indicated R70 million for the township businesses and for the informal traders. We agreed that it is going to be poor grant. For those businesses at above particular level they go to Small Enterprise Finance Agency, Sefa, wherein we have allocated a sum of R200 million that must be applied for by the businesses that qualify for Sefa products. Thank you very much, House Chairperson.
Mr J J LONDT: Hon House Chairperson, can you hear me?
The HOUSE CHAIRPERSON (Mr A J Nyambi): Yes, except that I do not see your face.
Mr J J LONDT: “Ja”. House Chairperson, I am struggling, but if you allow me like this I am happy to carry on if you are happy.
The HOUSE CHAIRPERSON (Mr A J Nyambi): It was going to be good to first see the face and switch it off, but I can allow you to continue and ask the question, hon Londt.
Mr J J LONDT: Thank you, hon Nyambi, at the end of the term you are very kind.
Hon Minister, it is a well-known fact that starting up small businesses successfully is incredibly difficult. The survival rate is often very low. We are sitting with a massive unemployment crisis in the country and taking into account the diverse needs and scale of small businesses: How does government plan to tailor the relief package to suit individual requirements of each business and how will you ensure that there are solutions provided whether monetary or alternative energy sources to adequately address the unique challenges faced by businesses of different sizes and sectors
ensuring the survival of those who are already established irrespective of who the owners are? Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Londt, thank
you so much for that important question. Firstly, let me say it is our ambition to be able to fund every small business, but unfortunately, the resources that Parliament has approved do not allow for that. That is why I put figures in terms of the R200 million that we are providing through Sefa adding that it will never be sufficient for small businesses.
However, as much as I say this looking at the work as the portfolio, we also has help that has come on board to say they are going to set aside some funding for small businesses.
We have the National Treasury which said they are going to be providing some incentives for those small businesses that will be utilising the alternative technologies. All of these are meant to ensure that we do try to masify the services that we have and be able to reach out to as many businesses as much as possible.
Unfortunately, we cannot have one approach. A one size fits all approach on the interventions. For example earlier on we
spoke about the micro businesses, informal in the areas they had. The small businesses that will not be able for an example roof top solar intervention. That would require small generators, but when you do that you ought to be able to say: Is the generator going to be safe? This requires all of us to be able to work together and look at a broader scale without individual interests, but to say as we have done with the Budget Votes and say there is a need for us to open a market so that we club them together. When we club them together we therefore able to say, at least we have a number of SMMEs that are being sheltered in terms of the energy crisis that we are talking about.
Secondly, those businesses that qualify for the different interventions offered by the Development Finance Institutions, DFIs, at the provincial level, at the national level and of course at the commercial banks, also are able to apply for those interventions. That is where then they are able to talk directly to the individual needs as long as they meet the criterion that is there.
I would like to pause there, but I want to also say that we have seen that the Minister of Electricity is trying his best with his team. Things have improved. We heard from some small
businesses that are saying as opposed to the previous months at least things are getting up and therefore even when our interventions come it will come to complement the good work that has been done by the Minister Responsible for Electricity in the Presidency. Thank you, House Chairperson.
Mr K M MMOIEMANG: Hon House Chairperson, greetings to you and the hon Minister and hon members. Allow me to express an appreciation to the responses that the Minister has given both in the main and the supplementary question.
Of course as the ANC we welcome your decisive policy intervention on the critical question that will bring the most needed relieve especially to the struggling small and medium enterprises during these trying times on the evolution of our democracy.
Whilst we prefer the differentiated approach that take both options into account in the light of the deep inequality between the reach and the poor and also appreciating the fact that other departments and entities are also coming on board. The critical question that arise is whether this policy initiative will not create a matter of unfunded mandate arising hon Minister, but of course taking into account to be
the responsibility that the Minister has in terms of ensuring that the SMMEs do in it flourish? Thank you, hon Minister and the House Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Mmoeimang, yes
that is why earlier on I stated that we have written to National Treasury to give us permission to use the funds that were meant for other programmes. At the centre of the work that we do is the development of small businesses. Now the development of small businesses talks to ensuring that small businesses do not only survive but, they are sustainable and productive. As things stand, we have clients that are not able to repay Sefa loans because of the impact that load shedding has had in their businesses. Now we can either choose to say let us leave them and let them close and we lose our donated money. Unfortunately we do not have that luxury. This is why we said if there are funds that we can utilise to assist the same businesses because for an example as I am saying we are taking from the township and rural enterprises programme. We are targeting township businesses to make that intervention.
It is track money meant for certain products and services that we must get to township businesses. However, as I said it is the sustainability is also the anchor of the work that we do. Therefore, providing an energy solution to make sure that they
are able to trade ... [Inaudible.] ... small businesses to try and in that they will be able to create jobs and be able to participate meaningfully in the economy.
Whilst we are looking at the National Treasury approving certain things, but we all agree that for SMMEs to thrive we have to make sure that there is good infrastructure in the areas where they are punching in. Whether we talk about roads, proper buildings as the hon member asked whether how we take care of them – it is meant to ensure that the entire value- chain where in the small businesses are involved is well- covered. We are the ones that must trigger that as the champions for small businesses and the co-operatives in this country. Thank you, hon House Chairperson.
Mr N M HADEBE: Hon House Chairperson and hon Minister, recently the President of the Republic signed the Africa Free Trade Agreement in order to open our borders to openly trade with other African countries. Yet with our electricity crises many small businesses may find themselves underequipped to be effectively take advantage of this opportunity.
Hon Minister, I would like to know from your good self whether your department has any plans to allow for small businesses
who have invested in alternative clean energy to sell any access back to the national energy grid in a way to pay off the investment and create load shedding resilient grid as part of any relief package? Thank you, House Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon House
Chairperson and hon Hadebe, thank you so much for that question. We always say when there is a crisis there is an opportunity. In countries where there is war, those that are involved in manufacturing weapons they get to thrive, others invest a lot in food security because that is what will bring that people may lose ... [Inaudible.]
Now in this context that we are faced with of the energy challenge that we have in South Africa, we are saying it is an opportunity for SMMEs also, not only for them to consume what exists, but to do what the hon member said to invest in certain areas by ensuring that they can provide solutions to the energy challenge that we have.
And yes, through the research improvements, they are allowed to participate and sell to those that are potential clients.
When the National Treasury made that announcement through the Minister of Finance to say we are going to incentivise including giving back 20% not necessarily giving back 20% as in cash, but to incentivise with 20% of whatever others that would have invested back to the small businesses. It was an opportunity for small businesses and bigger businesses to say let us make sure that we help relieve Eskom of the challenges is facing by doing what we have to do in terms of powering small businesses and big businesses and the society at large. When we do that we are creating opportunities in order to gain profit, but at the same time we are addressing the societal need. I welcome those initiatives. I am working with energy and we are working with the department responsible for electricity, we are working the Department of Co-operative Governance and Traditional Affairs in order to make sure that where there are opportunities we are able to come together and work in a concerted approach. Thank you so much, hon House Chairperson.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Minister. Hon Noluvuyo make sure that you remain muted. It is only the Minister and myself that are unmuted. The forth follow-up question is from the hon Magwala. The hon Magwala.
Ms N TAFENI: Enkosi Sihlalo. Iza kuthathwa nguTafeni.
Hon Minister, SMMEs are hit hard by the continued power cuts as many cannot afford alternate power sources such as generators and are instead forced to close shop during the period of load shedding. It appears to note that to date not all small business owners have received this much needed energy relief assistance which you speak of.
Hon Minister, what criteria and qualifications are used to access this relief package assistance and who is this 71% that you have reached that is affected?
Also please tell us the details of the remaining 29% who has not yet received as we can but the only hope that it is not the ANC scheme to loot money for the purpose of financing the upcoming elections? I thank you, hon House Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon House
Chairperson and hon Magwala, thank you so much for that question. Probably let me start with the last statement so that I can focus on the contents that seek to build our
country are that unfortunately in South Africa the majority has been proven that it is members that support of vote for the ANC who we do not exclude them in the participation of products and services that government renders. However, of course the ANC has made it the issue of government ... [Inaudible.] ... we put systems in place with those that are prone to be involved in corruption. This is why we have seen in certain instances that we are asking certain members to step aside in order to deal with whatever allegations that are there. We have put very clear from the resolutions perspective including in government we have kept in Parliament to make the presentation through President Ramaphosa and the Minister Responsible for Justice and Correctional Services including the Minister Responsible for the Police on how we are going to try to cab this evil act of corruption.
We do need everyone who come across that any corrupt activity that it be reported so that the law-enforcement agencies can act accordingly.
Now hon member, we cannot say we have given small businesses up to 71% of the energy relief. It cannot happen. We have never said because that would be a blatant lie.
As I responded earlier I said, we have set aside for this budget as I outlined and it is this Budget Vote that allocated the R70 million that I spoke about to the township businesses and R200 million to other businesses that must go through Sefa the other scheme of R70 million is grant-based accessed through Small Enterprise Development Agency, Seda, by these businesses based on the assessment that will be done by the respective agencies. Whether we provide money ... [Inaudible.]
... our agencies already is their responsibility to conduct due diligence in order to satisfy themselves that firstly, they are a South African business and indeed you are registered and secondly if you are a formal business you are registered and if you are not a formal business you have at least a permit to participate. However, we have not discriminated against anyone who is applying.
We then said we are going to conduct workshops as we do with the support we already provide. For hon members, this scheme although it talks about energy it is not the first time we provide support to small businesses, formal and informal.
We do work with municipalities where in where we are coming to identify because we do not know small businesses seated in Pretoria. Small businesses operate in their areas in terms of
the local municipalities. This is why we work with the Local Economic Development, LED, units of the municipalities. We have a database of the people that are operating in their areas. We conduct workshops for them so that they can know what is expected of them.
Of course, we do not ask what colour of the T-shirts do they wear or what political slogan do you chant? It is not about that. It is about us ensuring that small businesses get to thrive and we do commit that we are going to reach out to as many as possible within the limited resources that we have. Seventy one percent we never said, but we said we conducted a study because we wanted to get a sense of the impact that load shedding has had on small businesses. That study if you want the findings hon House Chairperson, with your permission we can get that shared out to Parliament so that the hon members can have access to it. The research sampling so it will total to 71% without the specifics of who is the Chairperson that is
... [Inaudible.] Thank you so much, hon House Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Through you, House
Chair, thank you, hon Moshodi. The department through our agency which is called Small Enterprise Development Agency,
SEDA, has since the start of our ... [Inaudible] ... period, which means from 2019-20 financial year to end 31 March 2023, the following assistance has been provided to youth and women- owned enterprises. About 67 410 youth enterprises, to the value of R1,5 billion and 287 286 women-owned businesses to the value of R2,9 billion has been provided.
We strive to ensure that at least not less than 40% of our budget goes towards women-owned businesses whilst we do not put a specific percentage for youth-owned businesses, but our products are really accessible to those. This is a deliberate outcome in order to promote financial inclusion. Our programmes methodology promotes potential outcomes that positively discriminate for the inclusion of women and youth and its loan programme.
To this extent, Small Enterprise Finance Agency, SEFA, prising methodology programme provides for interest rates discounts for more loans granted to youth and women. Our SEFA sets disbursement targets to 30% as I’ve highlighted earlier, and 45% of loans programme disbursement to youth and women old enterprises respectively. Moreover, we as the department have a concurrent function, in line with the Schedule 4 of the Constitution. Accordingly, the department is mandated to co-
ordinate and monitor the performance of the sector in terms of its achievement over the Medium-Term Strategic Framework, MTSF, and sector priorities.
Therefore, we assume our oversight role, both in provinces and national, in ensuring the implementation of national priorities that are affected through the development of sector indicators. In this regard, we are going to come back to pioneer as we are developing the reporting framework that clearly articulate to what provinces can do and what these qualities can do, because you want to be co-ordinated in order for us to be able to collaborate in an effective execution of the work that we do. Thank you, House Chairperson.
The HOUSE CHAIRPERSON (Mr A J Nyambi): The first follow-up question is from hon Moshodi. Over to you, hon Moshodi.
Mr I NTSUBE: Chairperson, it’s Ntsube here, she had requested me to stand on her behalf. With the greatest of respect, Chairperson, may I kindly not to be allowed to switch on my camera?
The HOUSE CHAIRPERSON (Mr A J Nyambi): I just miss the reason why not to switch it on, but let me allow you to ask your question, and generously ... [Inaudible.] [Interjections.]
Mr I NTSUBE: Chairperson, let me appreciate a comprehensive response from the Minister to this very important question in the midst of the escalating levels of unemployment and poverty, which mainly are concentrated between the youth and women. Hon House Chairperson, the key question is, in the light of the initiatives of pursuance of the empowerment of women and youth by various sectors of department, provinces and municipalities.
Hon Minister, what is the role of the department in co- ordination, monitoring and evaluation of different initiatives across the three spheres of government? Thank you very much, hon House Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Through you
Chairperson, thank you hon member for that question. Earlier on I said that we are the department that is responsible to champion the interest of the small businesses and co- operatives. This, therefore, means that we have that co- ordinating mandate that we must pay. What we don’t have as it
is at least, is the regulatory power in order to ensure that if a particular sphere of government does not comply with the requisites that are put in place, then we are able to act on it.
This is something we were trying to insight in the legislations that we are nodding. However, coming back to what is happening currently, I indicated earlier and some of the responses that we work through the municipalities. We have established interdepartmental committees and interprovincial committees. What we are doing is to make sure that we are trying to find resonance with the existing provincial economic developmental strategies and local community strategies so that we can be able to support what the provinces have identified as part of these priorities that are aligned to be identified to the national priorities.
This is how it got into our work. We sign the agreements with the private sector in terms of what can happen in their respective areas in relation to small, medium and micro enterprises, SMMEs. That’s why we spoke about the document we developed, the National Integrated Small Enterprise Development, NISED, framework, that seeks to bring the entire ecosystem into effective co-ordination without us be looking
to the government. We are in the process, again, of engaging Cabinet to make sure that we are able to administer or given power to administer certain components of certain legislations.
For instance, in the Broad-Based Black Economic Empowerment
Act wherein is the component that talks to the Enterprise and
Supplier Development, ESD, to say, if we are given power to administer those. Therefore, we are able to say, at building
capacity in terms of Enterprise and Supplier Development, we can tap into these resources that must relish the markets that
exist already. We are also looking at implementing the
Economic Recovery and Reconstruction Plan, especially the component that speaks to localisation.
When we do that, as I have said, we are not operating in
space. Small businesses exist at local level. Therefore, we are forced to say that this province must work with us, or
these are the stakeholders that we must partner together and be able to do what we want to do. I must confess though, hon members, that we have not been effective in that, hence I’m talking about presentation and the amendments that we are making in respective of the legislation, so that it can be easy.
However, we have engaged even the SA Local Government Association, Salga, we have engaged members of executive council, MECs, in different provinces responsible for economic development and finance. Hopefully, we are trying to find each
other as the time moves on. Thank you so much, hon members.
The HOUSE CHAIRPERSON (Mr A J Nyambi): The second follow-up
question is from hon Badehorst. Over to you, hon Badenhorst.
Mr J J LONDT: Chair, there is just a switch from the two DA members, I will go first, and he will go second. Hon Minister, when this department was established, one of the key targets were that unemployment will be reduced to 6%. I think that you’ve heard that before, but I want you to let it sink in that it will be reduced to 6%. Now, we haven’t even reduced the 35% to jobs created by the SMMEs since the establishment of this department.
So, the employment figures have just gotten out of control ever since this department has been established, the latest figures putting us at a staggering just over 32%. Even worse, looking at the youth unemployment, we are sitting with one of the highest youth unemployment figures in the world, and it is now just under 47 years after the 1976 uprising this ANC
government is allowing the youth unemployment rate to sit at just under 47%. So, this must be something that the government should be ashamed of.
At when should we say that the outcome starts to matter for the promises? At what stage will those responsible for running this department say they are failing on a mandate to deliver and that somebody will be held accountable? Thank you.
Mr K M MMOIEMANG: House Chair, that’s in terms of the follow- up question. I see that the DA has now two spots, and that is not in terms of representation.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Mmoeimang, the issue is that there was an arrangement, the FF Plus question was given to the ANC and the DA. You might have seen in the first one, it was hon Mohai and hon Dangor in the first question. So, hon Dangor was standing in for hon De Bryun. In this instance, in the place of De Bryun it will be hon Badenhorst and hon Londt. So, it’s in line with what has been agreed that would be part 11.
Mr K M MMOIEMANG: Thank you, House Chair.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Mmoiemang.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Through you, House
Chair, thank you, hon Londt for the question. I always say that it’s important for the hon members not to play cheap politicking in matters that are affecting our society deeply. The issue of unemployment is a sore pain to our people in this country. Now, a certain hon member that is privy to all that the government planned, including the budgetary constrains that we have, at least soothes people with that responsibility and everything that one does.
However, hon Chairperson, let me highlight this. Probably, we need to make sure that everybody understands that the issue of unemployment is under certain context of the crisis that our country has been faced with, whether you look at the COVID-19 that the people has been talking about, recently, the floods in KwaZulu-Natal and Gauteng, and the interventions that this department has named as useless as it as the hon members believes. For an example, hon members, on flood relief we’ve spent R50 million, wherein we approved 156 applications, and we supported 1 589 jobs.
During the COVID-19 period, we’ve spent R316 million on 1 497 businesses, which supported 16 544 jobs. On the business recovery after violence, we’ve approved R435 billion supporting over 200 businesses and in the process, supporting
2 046 jobs. Yes, this is a tiny drop in the ocean, I fully agree, but the reality is that the hon members sited here since they’ve approved the prise, they also approved the budget. With the little budget that the department has been allocated, it has managed to do so much.
Again, what is important, hon members, as the hon member talks about the 6% that we have committed that we are going to end unemployment here, the National Development Plan, NDP, is very clear, South Africa must create 11 million jobs by 2030, I know the hon member like it as 6%, and out of that, nine million jobs must come from small businesses. It means now, we add two million that has been lost during the Covid period. We should increase the target to 13 million, and therefore, 11 million that must come from the enterprises.
When the hon members sit and pass the legislations, have they look at that irrespective of each department comes here on that fight expression to say, how are we going to cater for small business in this area, as the people who makes the
legislation, that must create a converse of environment for small businesses? That legislation is not saying only government must do this, but it’s saying that the entire country is having a responsibility to half the unemployment that you are talking about.
We do appreciate that you are lacking behind in meeting the targets, and this is wisely said, it is high time that we refocus our energies and reach out to other partners that can come and help us with unemployment. As I said, it is a sore point that Ms D D talks about the high numbers of unemployment, but it’s not something that we must play politics over as if, we take tomorrow, let’s say God would allow in some people’s dreams to take over and govern this country, which they should be able to address unemployment immediately.
This is why we are talking to policy instruments that we are putting in place in order to be able to tap into the 70% that lies within the private sector, and that is why we are talking about signing of the master plans that we are agreeing to saying therefore that each and every masterplan has a component for small businesses so that all of us together as you have heard the President when meeting with the Presiding
Officers, POs, to say that we are committed to ensuring that we open up small businesses to create jobs.
I call upon the hon members too to support the small businesses in the areas you come from especially in the townships. You are allowed to move from the suburbs to the townships to support the small businesses so that they can create an employment, starting with grabbing the attire that you wear. Thank you so much.
Mr M S MOLETSANE: Through you, House Chair, Minister, in Matjhabeng Municipality, in the Free State Province, the mayor, Thanduxolo Khalipha, sidelines the local women and youth in participating in any initiatives to develop the economy ... [Interjections.]
Mr S J MOHAI: That’s not true, hon Moletsane.
Mr M S MOLETSANE: ... as he has not been including women ad youth-owned companies ... [Interjections.]
Ms N TAFENI: Don’t interrupt.
Mr M S MOLETSANE: ... projects, but instead, chooses to use companies from outside the province. Is this not contradiction of your intentions to mainstream women and youth to participate in the economy? If so, what steps of interventions will you take to assist women and youth in Matjhabeng, if you are feeling it on a nerve?
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Moletsane, don’t divert.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: through you,
Chairperson, let me thank hon Moletsane for ... [Interjections.]
Ms M DLAMINI: So, we’ve diverted?
The HOUSE CHAIRPERSON (Mr A J Nyambi): No, let’s allow the hon Minister to respond. Hon Dlamini, no.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon House Chair, I
must say, hon member, if indeed that happened, of which I really doubt, I’m saying, I really doubt because I’ve been to Matjhabeng several times as the Minister of this portfolio and my previous ... [Inaudible.] ... I have seen women bringing
services to the work that we’ve been doing in that area. I know for one, that we have supported small businesses that are owned by women and young people in that area, and if they were not given an opportunity to participate in procurement of the municipality, they wouldn’t be supported.
They are supported because I said, you work with the municipalities, it is them that identify in their respective database to say, this is the difference that we have. Of course, we strive to ensure that all the municipalities must open more space for women and young people. This is why I said earlier on that we are also looking at helping the municipalities to beef up their capabilities in terms of local development strategy because, from developing the procurement plan, you must have a clear strategy of what is it that you need to grow your economy.
In doing this, we have partnered, including appointing the
District Development Model, DDM, co-ordinator, responsible to co-ordinate all sectors of government and the private sector Lejweleputswa, the district wherein Matjhabeng also falls under. We continue to add all members that we are working with, whether at local or provincial level to make sure that they do not undermine the responsibility given to them by
excluding the women and young people of our country as I have indicated, because I have co-opted with this Parliament that supports small businesses in Matjhabeng too.
Therefore, I do believe that they are not totally excluded. Probably, we may talk in terms of percentages which is something that I may have to go and check with the respective municipality. Thank you, House Chair.
Mr F J BADENHORST: Chair, I’m just going to keep the video off to save my ... [Inaudible.] ... Am I audible?
The HOUSE CHAIRPERSON (Mr A J Nyambi): Yes, you are audible.
Mr F J BADENHORST: Hon Minister, the service to the youth you keep on contributing to the youth of 1976, yet you neglect the youth of today, are failing in every policy implements, and pushing out the youth employment through this ... [Inaudible.]
... management. Would you say that it’s fair for every youth of today that has been failed by you to punish you at the poles as it is expected by democracy? Thank you, Chair.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Chair, again,
I did say that cheap politics are not necessary when we are
dealing with matters that are very important. The hon member was here when I outlined the number of small businesses that we have supported that are owned by young people.
Nevertheless, I will repeat it, hon member, so that you know like they know that we have supported them. Of course, we haven’t supported them in totality, but they also have an appreciation of the challenge we have when it comes to the financial constraints.
Hon member, Badenhorst, I said, 67 410 youth-owned enterprises that has been supported by the department to a tune of
R1,5 billion, but I have not made reference to what the
Industrial Development Corporation, IDC, has done, what the National Empowerment Fund, NEF, has done and what the province has done. I’m just talking about what the department has done here. The youth of this country, hon member, probably next time I must invite you when we are going to engage with them. They are very clear about where their hope lies, and who carries the aspirations of their future.
They too recognise that we do have as the current ANC government, challenges and weaknesses somewhere, but they are saying that they are not folding their arms, they understand that no other party that was to take government in this
country will be able to fulfil their needs, because they have seen what has happened to their parents. They have seen how people continue to be excluded in areas where black people, the young and the majority are being undermined.
This is the reason I’m calling upon all members, irrespective of their slogan ... [Inaudible.] ... champion, to prioritise young people for our country, and we can go and politic and campaign out there. However, the reality is that we are able to see that they live in the society that we live in, they are able to tell between the good, the bad and therefore, the future. Thank you so much, House Chairperson.
THE MINISTER OF SMALL BUSINESS DEVELOPMENT: House Chairperson,
the department appreciates the challenges faced by Small Enterprises in assessing critical services included but not limited to basic requirements of registration noting that many of these challenges are found in municipalities. We have since endeavour to what was closely with municipalities and other partners including SA Local Government Association, Salga and Co-operative Governance and Traditional Affairs to empower these municipalities and the communities to be able to reduce red tape and their processes.
The empowerment processes include the following, identification of common impediments across some provinces and municipalities as well as designing and agreeing on unit methods of addressing red tape. This department is currently driving a rapid renew of priority regulatory impediments to reform in the work and already we have developed a framework for assessing regulatory impediments.
We have already identified 29 pieces of legislation that negatively affect the work of the small business across the three spheres of government and we have categorise and prioritised legislations for as regulatory reform per cluster.
We are already engaging with department and entities where these pieces of legislations happened. Some of their engagements include but not limited to. The department has trained some municipal officials as manual cooperatives, informal business chambers and many other stakeholders.
The provincial department of Economic Development in KwaZulu- Natal has been instrumental in this engagement ... [Inaudible.] ... The department is rolling out already raised red tape awareness campaign to empower municipalities. To date, about 25 municipalities across the country have
participate in our campaign with a plan to include about 16 municipalities during this financial year. This is all meant to ensure that whilst we are dealing with the red tape but our municipalities have capacity to deal with what they must deal with and address the challenges immediately. We are on the process of finalising the dashboard whose purpose is to empower municipalities to track complains and respond timeously to each complain. We did say we have gazetted recently the Small Enterprise Act which also seeks to establish the Office of the Ombuds that will also assist with dealing with these issues as I said we are addressing the regulatory functions that we do not have ... [Inaudible.] ...
With the recent focus on business formalisation, the access to government services support most-small businesses are willing to be registered than they were before. The Small Enterprise Development agency, Seda, has facilitated close to 5 000 small businesses with registration. We are bringing businesses on board to say whilst it is important to formalise with partnered with SA Revenue Service, Sars, in order to raise tax awareness around our businesses so that they cannot miss out on the incentives that they are going to be provided with. Of course, there are different levels of compliance for businesses with different pieces of legislations. These
compliance issues, they talk to tax compliance to business registration, labour legislation and of course compliance at municipal level with regard to the bylaws and other municipal business operating requirements since we mentioned that we are partnering with Salga to make sure where possible we are able to develop standardise bylaws in order to enable small businesses to survive in their areas.
To facilitate the easy of complains, we have initiated the red tape reduction programme to identify the legislation and regulations and as I said 29 pieces, we are trying to get the respective sectors to come on board based on the cluster. We are in agriculture, the economic cluster looking at the different components whether is SMMMEs in tourism, it is a matter that cut across therefore, the environment that we operate in requires us to collaborate with all the stakeholders that are there. Thank you, House Chair.
Mr N M HADEBE: Hon Minister, thank you for your response. Hon Minister, whilst we focus on the now with businesses, we also need to remain aware of the fact that damage has been done to small businesses over the last decade such as machinery breakdowns, power service, cancelation of ships, equalling loss income which have increased unemployment etc. I would
like to know from your good self, hon Minister, what is the department’s action plan to resuscitate businesses that are on the verge of closing or have closed for reopening operate from a basis of stability? Thank you, hon House Chairperson.
THE MINISTER OF SMALL BUSINESS DEVELOPMENT: One of the
products that the Small Enterprises Finance Agency, Sefa, offers the agency is that in response of finding support under the portfolio that we are responsible for is that I mentioned earlier the business recovery support. Therefore, businesses that qualify, they go and look out whatever that is listed as a criterion and then apply for those funds. We have saved so many businesses. Hence I mentioned the figure of R200 that we have already benefitted from the scheme. It’s an ongoing support that is there. But businesses because this is not a social grant department with all due respect, hon members.
We are interacting with business and is a business whether is small, big or whatever. There are certain things that we are respected to achieve in terms of compliance as we used taxpayers’ money. We have got to make sure that we are able to account, we are able to verify that indeed if we are saying you are a small business that is operating in a particular area you need support. We verify that indeed Stela Trading is
existing and therefore does what he is supposed to do and especially when you were provided funds. Yes, sustainability means that we must also ensure that we provide cost investment support to small businesses something that we have not invested a lot in. That is why you heard us saying we are changing how we are doing things.
We have been focussing on pre-investment support. Now we are saying a person that has never have been able to have his or her bank account to have R5 million may not know how to use the R5 million. And therefore, to make sure that business becomes successful and sustainable you have got to take that through the different stages and that means not only giving money but also holding by hand including providing matters to say how best can we go about. What is the likely challenges that we get to meet as an entrepreneur in the space? What is the challenges in the entire ecosystem? And for how best we can work with you and how to overcome some of these challenges. We are investing on the business investment support in order to make sure that if we have kick started or you have started on your own, we don’t want small businesses to remain small. That’s why we emphasise that for development of small and medium businesses they have to graduate. These interventions that we are trying to put in place are meant to
enhance that. But at the stand of it of course, is ensuring that, hon members, left right centre when they engage with the different departments and everyone including the National Treasury they should advocate for any increasing budget for the department so that we are able to carry out all of these task.
With the little that we will have, we are trying but we keep on trying to encourage our sister departments and the private sector to come to play some part and ... [Inaudible.] ...
Thank you so much, hon Chairperson.
Mr J J LONDT: Hon Minister, just two comments to where you have answered that far. I am sure you know the parable of the tenants and the one that got the lease that isn’t even see it and sometimes comes to my mind when I speak about this department. It might be that you got the smallest budget but definitely you are not doing the most with that.
Also Minister, you said earlier that different spheres of government need to step up and come on board to make sure that we address the unemployment that we face in the country. Now we do see that there are innovative strategies being implemented to support small businesses. For example, the
Western Cape, the reduction in loadshedding impact by partnering between government and independent power producers. Now based on what you say earlier, Minister, and this example are successful intubation against the loadshedding. Wouldn’t you say that we share a similar strategy that the Western Cape has done and it gets adopted at the national level. And would the Minister be willing to enter into discussion with the competent counterparts’ in the DA-run Western Cape to get guidance from them with regard to successes as already obtained in establishing Western Cape which led to better support of small businesses in the province that can be rolled out national and elsewhere. Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: I must indeed
conquer with the hon member that Western Cape has taken a good stride towards assisting small businesses. If you also look at Gauteng, they have also been very good in terms of the support they have provided as well as KwaZulu-Natal that has done hence I mentioned that we are partnering in terms of show case that we took.
We build from the strength that we enshrined. We are, yes, in some of the techniques from Western Cape as you say from Gauteng and KwaZulu-Natal because we are trying to teach
provinces to be able to learn from each other and use the best methods that are available. Hence we are in partnering with certain individuals IPPs of course now in place of course now that goes to a level of operation that the Minister is not able to talk to.
Mine is to outline a policy perspective. And for when we do that is to say there is a need for us to establish a fund that must look at assisting small businesses and that we have done successful as a department including robin in the Development Finance Institutions, DFI, as I mentioned to come to the party and make sure that small businesses are assisted.
The different provinces, they undertake their responsibilities based also on the support that they have because even if we look at the best performance provinces it would be put that way. It would also go to the contribution in terms of what is that they have in the kitty as we understand for example, we wouldn’t want to compare what Eastern Cape can do with the Western Cape in terms of the access to resources was the to have the same powers. But at the side of the access the resource and knowing very well that most people migrate from their province to go and work in bigger provinces and that the money follow them which reprieve the rural provinces. That’s
why for us we say we want to try to bring a balance approach to say how do we compliment the provincial economic growth plans that existing in order to make sure that people are not prejudice just because they come from areas that do not have lots of money as we look at the resources that the Treasury of the different provinces have.
We continue, hon Londt, to make sure that we do the best where we can. I know you are saying we are not utilising the funds according to what you view as better or the best way. But I haven’t had any small businesses that has touched saying that they didn’t have a support. It maybe something that its wound my mood by those that are not facing the conscious face by small businesses.
Whatever where we have gone wrong those that have been able to assess our services have been saying thank you, we are now able to survive. We are now able to continue with our businesses. And, yes, unless there is a product or a programme that hon members strongly thought that it is useless, it does not add value. If there is such, hon member, feel free to raise with us and if we don’t believe because as I said all the products that we have introduced, we said don’t want thumb up solutions. We want to make sure that we conduct research.
We do not only end up that, we went to the municipalities themselves to engage with SMMES to get a sense what is it that we are not doing right so that we can improve and make sure that we address the challenges faced directly by entrepreneurs not people who represent them and all the interventions that we are bringing now. That’s that why we are changing even on the implementation strategies that we are providing which changing we are saying now we are going to take that route because this is what the entrepreneurs themselves have raised. And as I indicated, we welcome your productive our contributions in changing the plight of the SMMEs. Thank you, House Chairperson.
Nk S A LUTHULI: Ngibonge, Sihlalo, ngibingelele, ngixolisa ngokungayivuli ikhamera. Ngqongqoshe womnyango, ungakwazi ukusinikeza imininingwane ephelele yokuthi uluphi usizo olunikeze izindawo ezifana nezindawo zasemakhaya KwaZulu-Natal
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Luthuli?
Ms S A LUTHULI: Chairperson, I was interrupted by the one who has the mic on. So ...
... njengoba sibona ukuthi bathinteka kalula ngale nto yokucima konga kogesi futhi kuyabonakala ukuthi lezi zindawo zasemakhaya zijwayele ...
... to feel left out and neglected by this government and the ruling party.
UMPHATHISWA WOPHUHLISO LWAMASHISHINI ASAKHASAYO: Kulusizi
ukuva ukuba ohloniphekileyo uthi lo rhulumente akawancedi amashishini asakhasayo. Uza kuzibona ethetha amampunge ukuba umsebenzi wakhe wokongamela akawenzi kakuhle kuba kwaNongoma isebe lethu beliqeqesha osomashishini abasakhasayo bebanika nezixhobo zokusebenza. Ndiyikhankanyile kuqala into yokukhupha izigidi ezi-15 emva kwezixholo-xholo zenyanga yeKhala...
... that is strain businesses. Any else also could put
R50 million. Government contributed R7 billion to revive the infrastructure in KwaZulu-Natal. And that means small businesses in rural areas also get to access and benefit when we talk about that.
Our agencies day in day out they respond to services and the request that comes from KwaZulu-Natal. But of course, in terms of the specific, hon member, one’s specific I will therefore say we will provide that in writing to Chairperson to tell her which business where is it what is it do and what support need to be provided because KwaZulu-Natal need service of what our government has done in terms of supporting small businesses.
Thank you once more, Chairperson.
Mr M I RAYI: Hon Minister, based on your interface with the provinces and various municipalities, to what extent do most small businesses comply with the formal and basic requirements of registration? So, the question is to what extent? And also those that have knocked at the door of the department for assistance, how were they be assisted? Thank you very much, hon House Chair.
THE MINISTER OF SMALL BUSINESS DEVELOPMENT: Well, we must say
that we have seen that most small businesses have not been compliant with what have been put in place. And I want to talk to the reasons lack of compliance. One thing we have observed in the country is that there is too much red tape when it comes to compliance. The cost of to comply in this country is very expensive. That’s why earlier on I mentioned the legislations that we are trying to review in order to address that. You go to certain areas, hon Rayi, wherein small businesses are expected to pay ridiculous amounts for payment of permits and they therefore find themselves not able to participate because these fees are ridiculous. I am just making an example. You go to other that complained about the zooming costs.
Now government has introduced this District Development Model that says let plan together. Let’s look at the entire ecosystem of what we want to achieve because at the end of the day we all address one person. Whether you call a voter, a resident wherever we reside but they all reside in the local municipalities. Doing that means that we are beginning to share the resources that we have in order to address the gaps.
Now most businesses are not complying with taxes especially in the townships and in the rural areas. most businesses don’t see the need to register which is why we say we partnered with the SA Revenue Service, Sars, to say let’s drive tax awareness programmes so that they can understand who gets tax and why and why bit is important to register for tax certificate in this country because it is important that people understand that they must comply with the legalities of our country. I said we are using taxpayers’ money.
When coming to registration of businesses, the timeline that municipalities take to process are the licenses, it’s another process. At least is better with the IDC. But now we are trying to meet them halfway by developing an integrated system that must be able to bring all these complying bodies together. On one hand in the device and the SMMEs and co- operatives be able to access those and therefore when they do that they manage time which means they safe time as time is money.
They also are able to ensure that they safe money because we are negotiating with some agencies to say, for example, on the tax incentives, on the registration fees and certain costs now we are going to be engaging banks as they also play critical
role in terms of our opening the bank accounts for the small businesses. so the extent, hon members, is that it’s a lot. There is no compliant but as I said we are hoping that we are going to overcome most of those because we have plans in place and we are partners that are working with us towards addressing those challenges.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much,
House Chair, and thank you to Hon Aucamp for that question. The costs associated with the damage caused by the floods were quantified and I did give the numbers earlier on but I'll refer to them again. According to a survey that was conducted by the Department of Trade, Industry and Competition, the floods affected 826 companies, and the estimated cost of the damage that was reported was about R7 billion. We provided the formal flood relief programme as the department doing it through the Small Enterprise Finance Agency, Sefa, and the Small Enterprise Development Agency, Seda, which are our agencies. We assisted both formal and informal businesses that were affected by the floods in KwaZulu-Natal and the Eastern Cape, and also on formal businesses that we supported the programme we had focused on businesses that did not have insurance or were underinsured, and both the formal and non-
formal were affected by this again in the recent floods in the two provinces. The programme assisted small enterprises that needed funding for certain working capital, including stock, equipment, furniture, and fittings. A total of 257 applications were received from the formal businesses to the value of R224 764 553. However, given the available budget, as I indicated, we had allocated only R50 million because that's what we could afford. Now, if you get applications of
R224 million, it tells you that about 70% of those businesses are not assisted from our side, although then they will go to the National Empowerment Fund, NEF, and other agencies.
We were able to assist 155 clients in these sectors. In the manufacturing sector, we supported 30 SMMEs in agriculture, we supported 68, in ICT, we supported three, in construction, seven businesses, in the services sector, 29 businesses, in the tourism sector, 10, in the service business, six and in retail, two, and this is the total of 155. The total amount that we dispersed to KwaZulu-Natal is R35 632 121 on 122 clients, and the total amount dispersed to 33 in the Eastern Cape is R14 168 556. The total amount that, therefore, we were able to disperse was R49,877 million out of the budget I spoke about which is R50 million, 8 053 applications were received from both KwaZulu-Natal and Eastern Cape provinces, 1 019 from
the Eastern Cape, 7 039 from KwaZulu-Natal. A total number of
3 757 applications met the criteria of businesses affected by the floods and were thus approved. It is as follows, 684 approved applications in the Eastern Cape 2 970 approved applications for KwaZulu-Natal. The total amount that we disbursed, is R8 946 544. Thank you, Hon member.
Mr W A S AUCAMP: House Chair, Hon Minister, there are quite a few questions speaking to the negative impact load shedding has on businesses. However, with the flooding that happened in specifically the Amathole District, bridges have been washed away, bad roads have become worse, and small businesses that relied on these critical arteries for buying power to move around are now struggling even more.
As the elected official responsible to be the guardian of these businesses, what have you done to engage your counterparts to fix the access between these businesses and the markets they serve, and what deadline do you set for yourself to have this resolved? Thank you, Hon House Chair.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Lehihi! Hon Lehihi, please mute yourself.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Nyambi, the
government works in a manner wherein plans are made, submitted and approved, and, therefore, budgets get to be allocated. So for every challenge that we have, we've got to look at the plans that we have and look at the available resources in place. It is no different for the province of the Eastern Cape in the Amathole District in particular. As the department, mentioned earlier, we have engaged all the MECs of the provinces that are responsible for economic development and finance. We do this because we are highlighting some of the challenges that small businesses are faced with in their respective areas and, Hon Aucamp, it is true that infrastructure challenges hinder the success of small businesses, which is why working with the infrastructure grouping at the Department of Public Works and Infrastructure nationally working also with the provinces themselves, where we are saying, let's try to come together and make sure that we can be able to address the challenges.
When the President decided that we must set up an infrastructure fund, it was made to appreciate these challenges that we're faced with. When we called upon the private sector to partner with the government on the Infrastructure South Africa programme that was previously run
by the current Minister Responsible for Electricity, which is now with the Department of Public Works and Infrastructure. We then said the government on its own cannot be able to resolve all the challenges, but the basic things must be done.
Recently the Cabinet has approved that there be interventions where municipalities are not performing and also where departments are not spending and those interventions are going to be rolled out as you see time moves on. At the centre of this is to make sure that we make things easier, not only for small businesses but for the citizens of our country to be able to have access to quality roads and any other infrastructure that is there.
Recently, we engaged with the Premier of the Eastern Cape, the MEC responsible for rural development and the MEC responsible for economic development on how to address the logistical challenges as one of the things we have picked up is that big corporates, especially in the food industry, are not able to source certain things from the Eastern Cape as much as it is good with land in terms of agricultural access, whether you talk about livestock farming, or you talk about grain production, but the issue of logistics is a mess. Again, this week on Tuesday, we were in Eastern Cape having SMMEs and all the critical players of the government to say how best can
they work together to address the challenges of infrastructure, and we got ... [Interjections.] ...
Ms N TAFENI: Chairperson, Minister, ... [Interjections.] ...
The MINISTER OF SMALL BUSINESS DEVELOPMENT: We got
commencements ... that we going to be able to meet the worker
... that and engaging ... I do not how things work here, hon Chairperson. Or should I keep quiet now while we have Minister Tafeni on the floor?
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Tafeni!
Ms N TAFENI: Sorry, sorry, Chair ...
... ngiyaxolisa kakhulu, Baba.
The HOUSE CHAIRPERSON (Mr A J Nyambi): You are getting a final warning. It can be. We have been pleading with all of you to mute yourself and you're disturbing the decorum and compromising this important session. Sorry for that, can you continue, Hon Minister?
The MINISTER OF SMALL BUSINESS DEVELOPMENT: So, as I was
saying, on Tuesday, we were in the Eastern Cape with the private sector and the government talking about opportunities that the Eastern Cape have, but the challenge is also that they have to unleash those opportunities, and we got commitments both from the business sector and the government that with a little they have, they're trying to rope in other investors for them to come and address the challenges that they have. Thank you, House Chairperson. [Interjections.]
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, Hon Minister
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Sorry, House
Chair, Hon Aucamp, unfortunately, I can’t put timelines because that is beyond my paygrade. I don’t have access to the resources. Thank you so much.
Rre K M MMOIEMANG: Ke a go leboga, Modulasetulo,
... Minister, the question that I want to pose the Minister is as follows, appreciate that we in the ANC appreciate the
multidisciplinary intervention by the government on the mitigation of the ravages caused by the flood in the communities of Port St Johns, especially also in KwaZulu- Natal. Also given the fact that the intervention spoke to the observations that a joint oversight visit by the select committee and the portfolio committee made to KwaZulu-Natal. We are also cognisant that some of the small businesses were destroyed while others were damaged to some repairable extent.
Were the cost associated with the damages quantified because, in the response that the Minister gave, the Minister spoke about the amount of the intervention that they made. So the question that I want to pose is was the cost associated with the damage quantified and if so, what was the total amount involved? Thank you. Thank you, Hon Minister. Thank you, Hon Chair.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: House Chair, yes,
the amount of damage caused was quantified to the tune of R7 billion. That was the cost of the destruction that was
caused by the floods in those areas. I think I have responded to the question.
Mr M DANGOR: Minister, you've indicated how you've harmonised between business, between the three spheres of the government and all to address this question. Minister, my question is, how have you involved the local communities in the resolution of their problems, so that we don't only do things for people, we do things with people? In flood-ravaged areas or wherever disasters may come, is to involve people in the resolution of their problems, partially. Thank you, Minister.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much,
Hon Dangor, for the important question. Hon members will recall that since our appointment in August 2021, together with the then Deputy Minister Sidumo Dlamini we crisscrossed the country. We did this, although many believe that it was a waste of time. We said if we can't come up with the interventions without talking directly with the people that are involved ... [Inaudible.] ... that we do. This is why in each province at least; we were able to check at least a minimum of three district municipalities which we selected in the manner of having either rural, peri-urban or urban municipalities to get a sense directly from the entrepreneurs themselves. When we moved from there, when we closed the sessions, we would make sure that we bring businesses on board because we would've spoken to the entrepreneurs. We were
bringing business on board and the people that are potential buyers, which means the communities where they live in. We continue to partner with Proudly SA to encourage people to be able to buy and support locally-produced products. This we do because we believe that ours is not imposed. We can sit in tutorials and design interventions, but the interventions that we design must respond to what the communities need.
Now, as an entrepreneur, every entrepreneur identifies a challenge in an area where they come from. They don't operate in space. They don't just ... [Inaudible.] ... and say, entrepreneurs look at the challenge that they faced with and, therefore, be able to say they're going to bring this innovation which becomes a solution to the challenge that they have, which is what we say when we go to the communities now to showcase the work done by the entrepreneurs to say, let's make sure that we partner with traditional councils. Let's make sure that we partner with business trainers. Let's partner with civil organisations, partner with everyone because for a business to be sustainable and successful, it requires everybody on board, but at the end of it, a business is a business because there's a need and, therefore, you can't come up with a solution to a need if you don't know what is needed. This is what forces us as the department to be able to
work with all. Hence, our entry point is the municipality that has access to the people that become our key stakeholders ... [Inaudible.]. Thank you, Chair.
Ms N TAFENI: House Chair, Hon Minister, informal traders in the Eastern Cape are still picking up the pieces after the floods caused substantial damage to their businesses. Which assistance have you provided to those informal traders who were hit by the floods and did not have any form of business insurance policy to cover their businesses or assets that they owned? I thank you, Chairperson.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Tafeni. Keep your mic muted bow. Thank you.
Ms N TAFENI: Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much,
Hon Tafeni, as I indicated earlier, for the people of Eastern Cape, we dispersed to 33 SMMEs that were affected by the floods and the amount that was provided to them was
R14 168 556. That was meant for the SMMEs that were affected by the floods in Port St Johns and certain areas of ... [Inaudible.] That's on the formal businesses. On the informal
businesses received applications as I indicated, 1 019 from the Eastern Cape and we provided support to those. Of course, there were more applications on the formal side, as I mentioned, but due to budgetary constraints, we could not assist them, but we then referred them to the NEF and other bodies that were assisting the small businesses affected in the areas, including the municipalities and the provinces that had provided support. I hope that answer suffices, Chairperson.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Dangor, the
information on the 30% procurement obligation for small enterprises is outdated. However, based on experience these targets were exceeded with more than 80% of the department procuring more than 50% of their annual spend on small enterprises. The challenge, however, is to ensure that procurement is done from small enterprises within the respective regional areas of this government departments and that can only be addressed through the amendments of the Public Finance Management Act, PFMA.
The department has identified gaps in the current Businesses Act that impacts on the capacity of municipalities to empower
local entrepreneurs to participate fully in the provision of basic amenities. To this time, department has been initiated the process to amend the Businesses Act. We have completed the public consultation process and the proposed changes have been incorporated into the Businesses Amendment Bill. Amongst others, the proposals into that Bill include the Businesses Act, provision for the issuing of trade licenses and permits by municipalities to both formal and informal businesses who want to operate in their geographic jurisdiction.
The Act provides a very broad policy and legislative framework without sufficient guidelines or framework to ensure policy coherence and similarity across all the municipalities. This has also resulted in uneven implementation across the country with effective implementation in highly resourced municipalities and metros, while the poorest municipalities have ineffective systems and procedures thus contributing to increase red tapes that we are talking about. That was originally intended to regulate the licensing of certain categories of businesses and the schedule of regulated sectors has not been updated since 1991, therefore creating a vacuum and confusion as to which sectors are regulated or not.
To address this challenge, the Businesses Act has to be repealed and fit for purpose legislation enacted. The department has for this ... [Inaudible.] ... process of consultations focusses on the primary users of this legislation, namely, the most municipalities who are the sphere of government that has to mean business licensing bylaws. Thank you so much, House Chairperson.
Mr M DANGOR: Minister, thank you very much. By and large you have answered my question and my follow-up question. However, it will be a ... [Inaudible.] ... if I miss the opportunity. You have appealed often here today that we act as South Africans in unity, that we don’t put on our political colours when we go into communities or other colours when we are going to communities. We are here to resolve the problems of South Africa and South African business. Will you consider bringing together all the motif forces and all the people with interested in a meeting or a process ... [Inaudible.] ...
The MINISTER OF SMALL BUSINESS DEVELOPMENT: My apologies,
House Chair. I don’t know whether it was my network but the hon member got cut. I missed parts of the question or the statement he was making.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Dangor, towards the end we missed the actual question out of your comment. Hon Dangor.
Mr M DANGOR: Chairperson, I have been cut out. Nevertheless, thank you. Would the Minister consider to bring all motives forces in South Africa together that deal with the issues of small business and to actually facilitate the promotion of small business and small industries together so that they can act as South Africans without the difficult colours or putting on their political colours before any reaction every time.
Thank you very much, Minister.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Dangor, yes,
there is one thing that we all agree to in this country, whether the government, whether the private sector and across political parties, that we all need to create jobs. There’s no doubt on that. All parties agree as I said both business and government. Now, if we all agree that we need to create jobs as I said the national Development Plan says 90% of those jobs must come through the small enterprises. That requires a plan that brings all of us together and in this instance the department had developed the national integrated small
enterprise framework that brings on board all citizens just like we did with the national development plan.
We canvassed support from different sector we made sure that if we support the small businesses there must be people who give commitment to buying including locals and once we do all of this with roll out the implementation because it has just been approved earlier this year. Now, we are trying to get all the parties to make commitments to say, as a particular stakeholder this is my role and therefore for this 10 or three years or two years, this is what we will be doing. That is the missing part, how to give effect programmatise that framework that put in place.
Otherwise we continue to call upon all South Africans and Africans in general and everyone who has access to market opportunities to join hands and ensuring that small businesses are given an opportunity not by doing a favour for them, but because I said they need to create jobs. Once jobs are created, it means there will be lots of profits to be made by all both big and small and those that are in politics they therefore get their votes as they are looking at getting votes and, of course, those that are looking at profits they get increased margins in the banks.
Nevertheless, at the end of it, it is the society that sleeps peacefully knowing that whoever that has been elected as the representative, represent them in the true sense by giving them access to participate meaningfully and effectively in their economy. We don’t have to be big to be the best. We believe that the fight against unemployment and poverty comes in three ‘cans’ the I can, the you can and the we can. Thank you.
Nk S A LUTHULI: Ngiyabona, Sihlalo, Ngqongqoshe womnyango, uhlelo lwamathenda lubonakala kungenye yezindlela yokuxhaphaza abantu bakithi abamnyama abahluphekile futhi luhlulekile ukwakha amathuba emisebenzi adingekayo kuleli zwe nasekukhuliseni nje komnotho. Kunalokho lubonakala luzuzisa izintswelaboya ze-ANC nezinye nje izintswelaboya ezihamba zodwa.
Why you still insist on procurement processes for development? Have you considered other policies interventions such as insourcing workers on a full time basis in all government department? If not, why. Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much.
Ekuqaleni bendithe phaya KwaZulu-Natal besiye kwaNongoma silisebe sihamba nee-arhente zethu. Kula masipala besityetyelele kuwo akulawuli i-ANC koko kulawula i-IFP...
... to my biggest shock when I got reports that other people are being chased away because they municipality leadership feels that they were not brought through the list because they have selected the ... [inaudible.] ... We have to clearly state that all businesses that are in the area ought to undertake our training even if we may not be able to support them now, but for future purposes they need to know how we work. This shows that ...
... lezi zintswelaboya ezikhona kulo lonke ilizwe Nkosi yami futhi ngicabanga ukuthi kubalulekile ukuthi sizihlanganise lezi zintswelaboya khona zizokwazi ...
... to provide better services for all and appreciate that when they are holding government offices they are there to serve everyone not a particular party. Nevertheless, of course, we will not punish others for being majority in certain areas but government has to serve people.
Unfortunately, the government that we have is the government that is represented. We have sought to look at the loopholes of the Public Finance Management Act, PFMA. This is why we are in the process of amending the Public Procurement Bill, which goes beyond just giving access to any other person to do business with the state but which clearly tries to address the issue of exclusion of certain sectors of our society.
In the proposed amendments that we have made submissions to, they include ensuring that we do have set asides for small businesses and co-operatives. On top of that we are going into a point of saying that, let there be products that are identified and designated only to be bought from small businesses. of course, now this support that the hon members are talking about is what will be tested when the Bill comes if the hon members are going to support this Bill because it will give, at least, a true reflection of what we want in our societies wherein our people are included in their economy and the procurement by the state.
As we do that, we recently gazetted the policy on funding for small businesses and co-operatives. It also clearly articulates our wishes in terms of what is it that we want to see happening because indeed, hon member, at times for tender system does not breed entrepreneurs. This department exists to support entrepreneurs that is why we emphasise the development. Tenders were out there because it is an intervention that was made because people were excluded in their economy. However, a country’s growth cannot rely on tenders, hence I made mention the fact that it is only 30% that is a state contribution to the GDP, 70% lies in the private hands.
So, if we will focus on tenders that have eyes at times, we will not be able to address the challenge that we have. This is why the master plans that I spoke about seek to look at that. How do we broaden looking the neutralising the legislative framework that we have? For example, hon member, the Broad-Based Black Economic Empowerment, BBBEE, Act has a component that talks to at least 3% of annual turnover must be allocated towards enterprise supplier development.
What we have gone further and done is to say, how do we make sure that this 3% focuses on approaches that have identified
as government, to saying take 15% of whatever amount is your 3%, 15% of that let it be targeted to businesses in the rural areas another 15% to businesses in the township areas, then in the structuring of the 3% we say take 67% of it make sure that this 67 - now don’t get confused and say 15% and then 67% - I am saying that in the entire 67% let it go towards support of equipment and the capital that the small business may need and any other technology including buildings, and then take the 33% to go and complement four capacity.
Now, if we do those hon members, it means we are able to bring other businesses on board in the value chain because we are redirecting them as to provides all the support so us replacing certain important products but also bringing entrepreneurs that can be innovative to say we see what you are doing already as the big business but if you can accommodate a, b and c or do these things, their business can boom. This is where we are saying the national integrated small enterprise framework addresses exactly those things accompanied with the policy on funding for small businesses.
Of course, to talk through our waiting for the process of National Treasury on the inclusive financing that is soon will be presented again. However, all of these numbers has to be tested. Everything that was said today it has to be tested
when these legislations come before yourselves, if you will support them or so whatever interest. Thank you so much.
Mr N M HADEBE: In fact, the hon Minister has covered a small share of my follow-up question. Hon Minister, it is all good and well to have policies that require the public sector to make use of rural, small, medium and micro enterprises for procurement. In fact, there is a policy that does exist to this effect. However, it is the management and the implementation of such which becomes an issue such as the supply chains for rural hospitals. I would like to know from your ... [Inaudible.] ... hon Minister, what interventions has your department made to ensure oversight and consistent implementation of such policies across all government departments? Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Thank you so much,
hon Hadebe. One of the things that I indicated as a weakness to the work that we are doing is the fact that we don’t have regulatory powers. Now, this tells you that even if you want to hold people accountable we are limited. Nevertheless, I did say that we are putting measures in place to address that. As things stands, procurement is done through the National Treasury and everything that talks about procurement it is
only National Treasury that can see. We can only receive reports of how much have been spent in the different provinces.
However, that we have even though we can see the National Treasury still battles to be able to identify if these are small businesses. These are things that we set together with ourselves and the Department of Planning, Monitoring and Evaluation in the presidency, let us come up with a framework that will help and enhance all of this even if it means it become of them an integrated system that we can all be able to see and manage and get this information so that we can be able to say, this is what must happen and this is what has not happened.
As things stand we receive reports from the National Treasury. Of course, the only thing that we do so to write to the respective provinces and where provinces are concerned. Of course, at national we write to Cabinet and their respective Ministers to say, your department has failed to comply with a, b, c and d. However, as I am saying that is how far we can go. The President has taken it upon himself to say that in the agreements that we are signing, he has to make sure that he improves by ensuring that we all account for those.
We do believe that once that ... already with the accounting officers which is theirs that requirement that 30-day payment everybody must adhere to and now the ... [Inaudible.] ... that we are talking about are once the Public Procurement Bill is enacted, we will be able to then introduce other measures in order to ensure that there is compliance to all of those. As things stands, there are weaknesses in the system but we are trying to resolve them. Thank you.
Mr J J LONDT: It is the fourth and final follow-up one for this session. So, hon Minister, we all understand the need to stimulate the rural small medium enterprises sector and make sure that it develops into contributing to fighting the unemployment crisis that we are facing. It is also important to note where there are successes and here in the Western Cape, we consistently recorded the lowest unemployment rates in the country. Now, this is attributed to the DA’s commitment to a business-friendly environment and a progressive approach to independent enterprise. A key indicator of our rural economies can and should work is a comparison between the so- called small towns.
Hon Minister, you can drive to almost any small town in the Western Cape where the DA governs and you will see streets
without potholes, you will see the refuse being removed, you will get proper basic services and an environment that is conducive for small businesses to start up and to grow. That, you do not get where the ANC governs, where towns are literally falling apart and people were trying to save the towns are often victimised instead of being supported.
Considering these factors above, could you elaborate on how the department’s policy interventions align with these successful practices that is implemented in the Western Cape? Are there specific mechanisms in place to encourage free market competition, minimise bureaucratic red tape and promote private sector involvement thus creating an enabling environment which has proven to be effective and stimulate small business growth and job creation? Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon House
Chairperson, I just want to respond specifically to the part that says which measures I have put. Earlier on I indicated what is it that we are allowed to do and what is it that we have identified that we need to do with partners, for example, the issue of addressing infrastructure is responsibility to the mandate of other structures, which we have bought on board in order to deal with the red tapes. I made reference earlier on to the amendments of the legislation that has been
established, amongst them is the Businesses Act as the hon members talked to the ease of doing business in the Western Cape.
Strangely, the hon member you may have missed it that the permit fees that are charged in the Western Cape especially in the metros areas are ... [Inaudible.] ... extremely excluding small businesses and black in particular. I mean like it is
R5 000 that we are talking about and we only see that in the Western Cape, not in any other province that has experienced that. Yes, the infrastructure is very good in certain areas in the Western Cape. This again links with what I have said, it is not like in the ... [Inaudible.] ... when allocations are made to provinces it is the same amount where you are able to compare.
So, we should not also try to compare apples to pears. We look at that under development that is in these areas the poor infrastructure that is there which goes hand in hand with the availability of resources for those that are operating in those provinces. Of course, most areas that are advanced are in the metros and in certain municipalities they are able to do the best that they are doing. ... [Inaudible.] ... that problem should also consider looking at how do we then
incentivise provinces that have run and not loss of economic activities because it is the reality that highly industrialised areas will always better perform than areas that are not in distress. ... [Inaudible.] ...
Now, any South African specially a Member of Parliament has to have those that were realities at the back of his or her mind when they making interventions to the legislative framework that we are involved in, including the inputs that we make.
Systems becomes ineffective because of what we have. Hon Chairperson, we mainly talk about being proud of the past that we have and state that we are confident of the future and this is the future that we are trying to build. For us to build the future we have got to deal with the what exist. Indeed, next year we are finishing 30 years in government. What is it that we would have learnt? What is it that we must unlearn? This is where the ... [inaudible.] ... the government of the ANC is going to.
As we have seen to say, we realised as government that we can’t do everything and we realise that in areas that are not industrialised we have to be deliberate on the interventions as the state that must make sure that we make interventions in order to enable those people to be able to participate in
their economy as the strategy and tactics of the ANC as the Freedom Charter calls for. Now, if we have people who, of course, will always be favoured if they grow up with trust accounts trust funds they would then assume that as entrepreneurs we are starting from the same level.
We don’t start at the same level, but that is not an excuse it is about how we then bring all of us together, the haves and the have nots to say how do we build the sustainability of what we are trying to address but at the end of it making sure that we improve people’s lives all of us irrespective of which party we belong to, but as the people’s representatives in our respective areas. Thank you once more, House Chairperson.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Minister. Hon members, we have come to the end of questions to the hon Minister of Small Business Development, hon Ndabeni- Abrahams. Hon delegates, I would like to take this opportunity to thank Minister Ndabeni-Abrahams for availing herself to answer questions in the National Council of Provinces. Hon delegates, that concludes the business of the day and the House is adjourned. Thank you very much.
The Council adjourned at 15:57.