Extract 2 Recommendations from the Portfolio Committee on SME

Having met with the Department to scrutinise the Annual Performance and budget for 2015/16, the Committee made the following observations

SASMEF Communications

Jun 11, 2015


Having considered the Strategic Plan, Annual Performance Plans and budget for the Department of Small Business Development and its entities, the Committee recommends as follows:

  1. The Department should rethink its budget for Programme 1: Administration compared to the core functions of the Department such as Programme 2: Cooperative Development. A 20/80 ratio should be used whereby 20 percent be allocated for support functions and 80 percent to core functions.
  2. The Committee still maintains that there should be a way of assessing the rate of return on investment and align that return on investment to targets set by the NDP, particularly the 90 percent of 11 million jobs more created through SMMEs and Cooperatives by 2030. Therefore, a progress and impact assessment tool would need to be developed so as to measure results against investment.
  3. The Department must furnish the Committee with the status report on transversal agreements with other government institution within one month of the approval of this report.
  4. The Department must submit a well costed Organogram to the Committee and prioritise the filling of critical vacant positions such as Director- General and Chief Financial Officer (CFO).
  5.  The Department, in particular the Gender Unit, should collaborate with the board of SAWEN in order to assess the impact of their programmes for women entrepreneurs with the objective of aligning SAWEN services to the mandate of the Department.
  6. The Department should build in-house capacity to manage funds budgeted for Isivande so as to maximise value for money from the budget allocated to Isivande.
  7.   Both the Department of Small Business Development and Department of Economic Development should speedily resolve the technical migration of SEFA as per Cabinet Resolution.
  8.  The Department together with the board of SEFA should develop a funding model for SEFA that relates to the felt needs of SMMEs and Cooperatives in order to facilitate development, and not isolated projects that cannot survive without being complimented by value chain development.
  9. The Department should use its transversal agreement mandate to assist SEFA to gain access to complimentary funding and support services for SMMEs and Cooperatives located in both the private and public sector.
  10. The Department must work intensely with National Treasury to ensure that the budget allocation for SEFA is transferred from the Department of Economic Development to the Department of Small Business Development during the Budget Adjustment period.
  11. The Department should ensure that SEFA allocates significant funds to tailor made programmes aiming at assisting the survivalist enterprises in graduating to formal economy.
  12. The Department must investigate any hindrance that could delay SEFA and Isivande to fully account to the department, and deal with any of those hindrances accordingly. If for example it’s legislation, the Department should push amendments to such legislation.
  13. The Department must expedite the appointment a Chief Executive Officer for SEDA to ensure that there is accountability in the use of resources allocated to SEDA.
  14. SEDA must build its own capacity to eliminate usage of consultants that it used to service its clients-base. Moreover it must ensure that it employs staff that have a passion for development so as to prevent thehigh staff turnover as a result of them leaving for greener pastures.
  15.  Development ofan Enterprise Development Fund sourced from private sector fund would enhance existing activities of the Department.
  16. The Department must expedite the establishment ofCooperative Development Agency as per Cooperatives Development Act 2005 as amended.
  17. The Department should prioritise skills development incooperatives through the establishment of Cooperatives Academy so that they can be capacitated to identify opportunities meant for them, for example, set asides.
  18. The Department must speedily establish a Cooperative Bank that will give financial support to Cooperatives and thereby directly contribute to radical economic transformation.
  19. Each programme and fund, SAWEN, Isivande and BBSDP should have a specific target group whereby a longitudinal and vertical impact can be realised and measured. Furthermore, integrated use of resources should also be applicable to empowerment zones.
  20. The Department should be clear on actions to be taken in ensuring that the guidelines of red-tape reduction are implemented.
  21. The Department should define and begin to use the terminology that refers to the service and the programme rendered. A clear definition and a difference of absolute size of enterprise and gazelles should be given. Over and above, Key Performance Indicators should indicate and measure impact.
  22. Each of the strategic plans for both SEDA and SEFA should be guided by the overall objectives of the NDP, economic growth and job creation targets.
  23. The Department should bring all policies and legislation that relate to Small Business Development to Parliament as an Amended National Small Business Act.
  24. The Department should ensure that it exercises its work of monitoring its entities; moreover there is a need for the Department to conduct an integrated planning session with all its entities for proper alignment to the mandate, the strategic and annual performance plans of the new Department.
  25. The Department and its entities should strengthen their research capacity.
  26. The Department should develop a strategy that wouldformalise the informal businesses and simplify their support services and incentives to make them easily accessible.
  27. The Incubator Support Programme should be migrated from the Department of Trade and Industry to the Department of Small Business Development.
  28. The Department should consider funding the Small Business Connect newspaper and website.
Carl Lotter