Honourable House Chairperson,
The ACDP is cognisant of the fact that in any thriving and developing economy, it is small businesses that create the jobs and provide the most opportunities for poor people to earn a living. As President Ramaphosa said, “A vibrant community of small businesses is a valuable asset to any society and the conditions under which such companies operate need to be altered to encourage them in this.”
The ACDP notes that the Department of Small Business Development (DSBD) received approximately R2.44 billion, representing a reduction in the budget of approximately R92.7 million. In our view, the reduction in spending capacity will have a snowball effect, slowing down expenditure on vital financial support to SMMEs and cooperatives.
It bears mentioning that the National Development Plan envisaged the creation of approximately 11 million additional jobs between 2010 and 2030, identifying that small and expanding firms should be able to create 90 per cent or 9.9 million of those jobs. Putting the Covid period aside where some 2-3million jobs were lost, and loadshedding which has kept our economy on perpetual pause, this Department still needs to fill 90 vacancies or 28% of the 322 planned staff complement. With 6 years to go to create 11 million jobs, the economy underperforming, and unemployment and poverty increasing, the Department must admit failure in achieving the targets of SMME growth.
The ACDP expresses concern on the inverse proportional relationship between performance outcomes and expenditure. This indicates inefficiencies in expenditure which invariably means the delivery of services to SMMEs are negatively affected. Clearly then, to improve on its spending efficiency, the DSBD must ensure that budget expenditure is aligned with performance against planned targets.
Honourable House Chairperson, the reduced budget, perpetual red tape, and the postponements in the finalisation of the merger of the entities that should be providing support to SMMEs, is very disconcerting.
It was hoped that the establishment of the new one-stop-shop, the merger of the Small Enterprise Finance Agency (SEFA), the Co-operative Banks Development Agency (CBDA) and the Small Enterprise Development Agency (SEDA) would go a long way in making a dent in narrowing the credit gap and improving access to finance for SMMEs.
It is the view of the ACDP that to save taxpayers’ money, this Department may be better placed under the Department of Trade, Industry, and Competition (DTIC), where one could then leverage on economies of scale, improve efficiencies and reduce duplicity.
I thank you.
