In supporting the Budget Vote of the Department of Small Business Development at Parliament yesterday, the Chairperson of the Portfolio Committee on Small Business Development, Ms Ruth Bhengu, praised the Minister of Small Business Development, Ms Lindiwe Zulu, for the evolution and transformation of the department from being a Department of Trade and Industry’s programme into a fully fledged department with a much broader mandate of championing development of SMMEs (small, micro and medium-sized enterprises) and cooperatives.
“We are pleased that the department has passed forming and storming stages of organisational development and is now normalising and setting standards that are aimed at executing its mandate efficiently to achieve the National Development Plan’s (NDP’s) target of creating 9.9 million new jobs by 20130,” said Ms Bhengu.
She said the department should speed up the process of addressing obstacles that prevent small businesses and cooperatives from realising their potential. Ms Bhengu highlighted some of those obstacles that include lack of access to finance, lack of access to markets, lack of business support infrastructure and delays in issuing of licences and permits.
The Department of Small Business Development was established in May 2014 and according to Ms Zulu, its establishment marked a turning point in the history of SMMEs and cooperatives development in South Africa.
In presenting the 2017/18 Budget Vote of her department, Ms Zulu told the National Assembly (NA) Members of Parliament (MPs) that they will agree that the budget available is far below what is needed to deliver the department’s mandate.
She said in this financial year the department will review the Cooperatives Incentive Scheme. The objective of the review process is to enhance the programme’s effectiveness to ensure sustainable and growing cooperatives in the economy. “These instruments are part of our strategy to design relevant policy instruments in response to the need to bring about radical economic transformation in the development of cooperatives and enterprises”.
Ms Zulu said the process of building a fully independent department continues rapidly. “Despite all the challenges of setting up a new home with limited resources, the department was invigorated by an unqualified audit opinion from the Office of the Auditor-General for the 2015/16 financial year.”
She said the department has been in existence for three years and with the benefit of hindsight, organised the department ourselves to function as a portfolio. “The aim of our portfolio is to lead an integrated approach in the development of SMMEs and cooperatives,” she said.
According to Ms Zulu, the aspirations the department as set for 2019 include ensuring growth in the contribution of SMMEs to the GDP from 42% to 45%, to increase the number of SMMEs and start-ups from 2.15 million to 2.56 million and to increase the total number of jobs created by SMMEs from 7.33 million to 9,09 million.
“The performance of small businesses and the portfolio in delivering these aspirations demonstrate that we are on course to achieve the key indicators of radical economic transformation and the National Development Plan: Vision 2030,” said Ms Zulu.
Participating in the Budget Vote of the Small Business Development and supporting it, the NA MP of the United Democratic Movement, Mr Nqabayomzi Kwankwa, said the increasing inability of the rural and formal sectors to absorb the South African labour force, the promotion of Small Business Development is critical in South Africa.
Furthermore, according to Mr Kwankwa, small businesses play an important role in ensuring inclusive growth and job creation for youth and women in particular. Given that reality, Mr Kwankwa said R1.2bn allocated to this department in this financial year is “hopelessly inadequate” for the needs of the sector. “It is even worse when one considers that about R730m of this goes to agencies,” said Mr Kwankwa.
By Mava Lukani
19 May 2017
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