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2016/2017 Budget Vote Debate on Small Business Development delivered by Bhengu Hon Nozabelo Ruth

11 May 2016

Hon. Chairperson
Hon. Members
Fellow South Africans

The ANC supports the budget of the Department of Small Business Development.

The ANC believes that this budget though not enough would take the country a step further towards radical transformation of the economy that is currently in the hands of a few white monopoly capital leaving the majority of the South Africans surviving on government handouts and abject poverty.

While appreciative of social grants and free services to the poor we are mindful that they are not a permanent and sustainable solution to poverty therefore need to be complimented by interventions that are aimed at enabling the poor to become self-sufficient.

When the ANC assumed power in 1994 it inherited a skewed economy controlled by white monopoly capital.

South Africa is perceived to be a mixed economy driven by three pillars :

  • State owned companies
  • Cooperatives and
  • Private sector

This in reality is an ideal economy which would be achieved through radical economic transformation to reverse a racially based capitalistic economic system inherited by the ANC government which continues to enrich a few leaving the majority in abject poverty.

It was based on this understanding that the ANC in its 53rd Conference resolved to radically transform the economy.

The establishment therefore of the Department of Small Business Development is part of a radical economic transformation process through Small businesses and Cooperatives owned by blacks in general and Africans in particular.

Chairperson

In the report of the Portfolio Committee on 2015/2016 financial year Budget Vote of the Department of Small Business Development,

The Committee recommended to the Department an assessment of programmes inherited from other departments so as to determine their relevance to the mandate of the Department and their effectiveness in reducing poverty, unemployment and inequality moving forward.

The Department adhered to this and reported back to the Portfolio Committee.

The Committee supports the implementation of programmes that are in line with the mandate of the Department and those that address challenges and felt needs of SMMEs and Cooperatives.

We advised the Department to further engage and consult the affected beneficiaries on programmes where there were disagreements either between the Minister and the Deputy Minister or the Department and the Portfolio Committee.

The committee also identified that the assessment by the Department, SEDA and SEFA looked more inwardly ignoring oversight reports of the Portfolio Committee and consultation with SMMEs and Cooperatives especially those that had not been serviced by
the Department and its entities.

Based on these shortcoming of the assessment report the Portfolio Committee advised the Department to broaden the assessment and consult with the affected groups before terminating some of the programmes that the Department wanted to terminate or transfer to other departments.

We hope that the DG would find wisdom in the advice of the Committee and speedily resolve these issues, applying constructive change management tactics to prevent unnecessary tensions between the Minister and the Deputy Minister regarding transfer and termination of programmes which were under the Deputy Minister.

The Strategic Plan of the Department for 2016/2021, MTEF and the Annual Performance Plan for 2016/2017 financial year is a combination of reviewed programmes inherited from DTI and EDD as well as new programmes which are informed by a broader
mandate of the Department.

The Committee`s report on 2016/2017 financial year budget vote of the Department of Small Business Development raises a concern on the merger of SMMEs Development Programme and Cooperatives Development Programme into Programme 2

Our concerns Hon. Minister are based on the following:

1. SMMEs and Cooperatives play different roles in a space of economic development

  • SMMEs are profit driven businesses
  • Cooperatives are a social capital with community socio-economic development interests.

Therefore pursuing different economic policies and supported by different financial and non financial systems.

Ngabe sesakucaza kahle loku siyi ANC ukuba lendlu yesishayamthetho yasinikeza ithuba lokuba nenkulumo mpikiswano yeziphakamiso ezihambelana nokushintshwa komnotho kulelizwe.

Kodwa ke lendlu ibilokhu iphindaphinda inkulumompikiswano yesiphakamiso se DA sokuthi lendlu ithi ayisamethembi u Mongameli Jacob Zuma nakuba kwaziwa ukuthi lendlu angeke isithathe isinqumo esinjalo.

Lokhu kusibambezele kakhulu. Sicela ukunikezwa ithuba lokukhuluma ngokutshintshwa komnotho walelizwe ubuyele ezandleni zabomsinsi wokuzimilela. Maqembu aphikisayo Yekani ukusibambezela.

1. The Integrated Strategy on the Development and Promotion of Cooperative 2012- 2022 document of DTI has this to point out:

  1. Registered cooperatives as at 31 March 2009 were 43,062. KZN being the highest with 26% and Northern Cape the lowest with 2%.
  2. Sector spread indicated that agriculture was the highest with 5680 which is 25% and fishing being the lowest sector with only 46 registered cooperatives which is .0%.
  3. Mortality and survival per province was as follows in 2009:
    1. KwaZulu-Natal survival rate 12% failure rate 88%
    2. Eastern Cape survival rate 7% failure rate 93%
    3. Western Cape survival rate 7% failure rate 93%
    4. Northern Cape survival rate 2.5% failure rate 97.5%
    5. Limpopo survival rate 22% failure rate 78%
    6. Mpumalanga survival rate 12.5% failure rate 87.5%
    7. Gauteng survival rate 17% failure rate 83%
    8. Free State survival rate 8% failure rate 82%
    9. North West survival rate 13% failure 87%

The said strategy also points out that there were more registered agricultural cooperatives before the promulgation of Cooperatives Act N0. 14, of 2005.

By 2009 there were 18 cooperative sectors. The best performing sector being:

  1. Housing cooperatives at 32 % survival and 68% failure rate
  2. Arts and Culture at 30% survival and 70% failure rate
  3. Social and burial at 29% survival and 71% failure rate
  4. Baking at 25% survival and 75% failure rate

Concerns raised by the Portfolio Committee about putting SMMEs and Cooperatives under one programme overseen by one Deputy Director General as well as moving away from a sector based development approach are partly informed by this analysis.

Hon. Minister, we urge you to relook at this issue and provide the Committee with more tangible information and a political policy direction that influences this direction other than recommendations of the consultants assigned by the Department to assess programmes inherited from DTI and other departments.

In conclusion

I thank all members of the Portfolio Committee who participate in meetings of the Portfolio Committee, to ensure that the Department rises to the challenge.

I thank the support staff to the Portfolio Committee led by King Kunene the Committee Secretary assisted by Nola Jobodwana.

Our Content advisors Xolile Mgxaji and Sibusiso Gumede, the long hours that you spend in the office sometimes up to 04: 00 am, to ensure that both the Department and the Portfolio Committee meet parliamentary deadlines is a demonstration of your commitment beyond the call of duty.

To the Acting D. D.G. Mr. Lindokuhle Mkhumane who was a former Acting D.G. for sometime in the Department thank you for stabilising the Department and putting the foundation for D.G. Prof. Edith Vries to build on, to all staff members in the Department and Ministry thank you very much.

I thank the Deputy Minister Ms. Elizabeth Thabethe for sharing her knowledge and experience of the road travelled by government with SMMEs and Cooperatives since 1994 to where we are today.

Last but not least may I thank Minister Lindiwe Zulu for providing political direction in the Department and building relationships with other Ministers, the business sector and other spheres of government.

The ANC supports this budget

I thank you.

     
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