The Department of Small Business Development says it is hamstrung by 28 pieces of legislation that prevent it from effectively discharging its constitutional mandate. In addition, some of this legislation is contradictory, the Select Committee on Economic Development and Trade heard on Wednesday when the department presented its annual performance plan.
The legislation in question includes, among others, the Business Amendment Act, municipal formal trading by-laws, the National Liquor Act, the National Land Transport Act, the Municipal Financial Management Act, and pollution by-laws.
The department promised to provide the committee with a presentation on streamlining the legislation, along with a briefing on the department’s efforts to reduce red.
Members of the committee had questions on various issues including the role of municipalities; compliance with 30-day rule for payment; progress on reducing bureaucracy; and grant funding administration.
Committee member Mr Nico Pienaar called on the department to reduce dependency on government funding. “We should get to a stage where the SMMEs that are government-supported are able to stand on their own. Instead, they keep coming back for more money.”
He called on the department to provide a list of the 28 laws that require amendment. “We can change the laws; that is why we are here. Nothing warms my heart than removing red tape in government,” Mr Pienaar said.
Minister Ndabeni-Abrahams informed the committee that although the intention was to fund SMMEs until they are sustainable, that is not possible. “We are no SASSA and will not create dependency. Any developmental government has to pay for the developmental dividend. We have observed the performance of our loan book; there has not been post-investment support. The ecosystem of the small business sector has to ensure that the small businesses are sustained.
The committee Chairperson, Ms Sonja Boshoff, asked about the R2.1 billion allocation to Programme 4 while the Micro, Small and Medium Enterprises Ombud remains underfunded by nearly R50 million. “Despite repeated identification of funding access as a critical challenge for MSMEs, the department continues to channel billions through SEDFA, an entity plagued by bureaucracy and delivery bottlenecks. What has been done to clean up this pipeline before pouring more money into it?” she asked.
“The Business Licensing Bill is still in pre-submission stages, while MSMEs in rural municipalities remain strangled by red tape. Why has it taken so long to finalise such a foundational reform, and what will change in 2025/26?”
Other issues Ms Boshoff sought clarity on included evidence of measurable value for this administrative spend and job creation targets.
“This department is tabling no fewer than five new policy frameworks this year – from incentives, to startups, to township revitalisation. Yet many past frameworks remain either partially implemented or not reported on at all. What institutional capacity exists to drive so many concurrent policies, and where is the implementation dashboard for those previously adopted?” concluded Ms Boshoff.
Sibongile Maputi
11 July 2025
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