Address by the Minister for Small Business Development, Hon Khumbudzo Ntshavheni (MP), on the occasion of the Debate of Budget Vote on Small ...

Address by the Minister for Small Business Development, Hon
Khumbudzo Ntshavheni (MP), on the occasion of the Debate of
Budget Vote on Small Business Development

25 May 2021

Honourable Speaker
Deputy Minister of Small Business Development, Mama Nokuzola Rosemary Capa
Chairperson and Honourable members of the Portfolio Committee on Small
Business Development
Honourable members of the National Assembly
Chairperson and Board Members of Small Enterprise Development Agency (SEDA)
Chairperson and Board Members of the Board of Small Enterprise Financing Agency
(sefa)
The Director-General of the Department of Small Business Development
CEOs of our entities SEDA and sefa;
Senior Officials from the Department and our entities
Representatives of the organised business formations and other partner institutions
Entrepreneurs

Ladies and gentlemen,

On the 25th of May 1963, 32 African leaders came together to form the Organisation
of African Unity, one of its objectives being to encourage political and economic
integration among member states. 58 years later to the Day, we, Honourable
Members of the National Assembly are debating Budget Vote 36 for the Department
of Small Business Development. Today, as we celebrate Africa Day – we are
encouraged because another aspiration of our continent’s forebears for economic
integration is on the verge of being realised through the coming into effect of the
African Continental Free Trade Area (AfCFTA) on the 1st of January 2021. We
celebrate this milestone and the commitment of the African leadership to forge
ahead despite the challenges posed by the Covid-19 pandemic.

We are fully aware that the goals of the AfCFTA and the African Union’s Agenda
2063 of transformed economies and jobs will not be realised without the contribution
of AU’s individual member states to transform their own economies and create jobs.
South Africa’s path to economic transformation and job creation is guided by Vision
2030 as espoused in the National Development Plan (NDP).

The NDP’s central goals are expanding employment and entrepreneurial
opportunities on the back of a growing, more inclusive economy. The naysayers will
claim that the Covid-19 pandemic has put paid to these goals. However, Sun Tzu
has taught us that “victory depends on conditions that are always in flux”. For us the
Covid-19 has provided a once-in-a lifetime opportunity to ensure that by 2030, South
Africa has a more diversified economy consisting of dynamic products and greater
depth and breadth of domestic linkages. To achieve these, we will need to revert to
what the architects of the NDP advocated for – being to intensify the simulation of
local and foreign markets and strengthening conditions to promote labour-absorbing

activities. To be specific on matters affecting small businesses, the NDP proposes
that we must:

1. Increase exports focusing on amongst others construction, mid-skill
   manufacturing, agriculture and agro-processing, tourism and business services;
2. Reduce cost of regulatory compliance,
3. Create a larger, more effective innovation system closely aligned with firms that
   operate in sectors consistent with the growth strategy,
4. Support for small businesses through better coordination of relevant agencies,
   development finance institutions, and public and private incubators,
5. Strengthen financial services to bring down their cost and improve access for
   small-and medium-sized businesses
6. A commitment to public and private procurement approaches that stimulate
   domestic industry and job creation, and
7. A labour market that is more responsive to economic opportunity that requires
   amongst others the review of regulations and standards for small and medium
   enterprises

Of course, the architects of the NDP could not have anticipated a global pandemic
which fast-tracked the advent of the Fourth Industrial Revolution. As a government,
we had to respond to the emerging constraints and adopted the Economic
Reconstruction and Recovery Plan (ERRP) to ensure that South Africa’s economy is
rebuilt to achieve both recovery and inclusivity.

Honourable Chairperson

Allow me to table the Budget for Vote 36 of the Department of Small Business
Development for the 2021-2022 financial year and the Medium-Term Expenditure
Framework (MTEF) estimates. The deployment of this Budget will be used towards
achieving the goals of NDP Vision 2030 and the AU’s Agenda 2063 guided by the
ERRP.

1. The Budget

Honourable Members,

We are tabling this Budget for debate exactly 5 days before we mark the 2nd year
since the appointment of the National Executive by the State President, His
Excellency Mr Matamela Cyril Ramaphosa on 30th of May 2019. I will therefore take
this opportunity to report back on the progress we are making to achieve the
programme we adopted in 2019, albeit it had to be adjusted and enhanced to
respond to material conditions. On several occasions, we have come to this House
to report on how we intervened to assist SMMEs at the height of the Covid-19 hard
lockdown, the House has received a report from the Auditor-General on the
performance of our Department on Covid-19 relief measure and we had the pleasure
of hosting the State President when he publicly interacted virtually with the
beneficiaries of our Covid-19 Relief Interventions.

This Budget allocates R868 million of the transfers and subsidies to the Small
Enterprise Development Agency. Of this, R666 million is allocated for the
strengthening and expansion of SEDA’s presence across the country with a goal of
maintaining a SEDA office in each district of our country. The enterprise
development work of SEDA is the frontline of our services to SMMEs including
cooperatives. Through the SEDA network of branches, the Department assists
SMMEs and cooperatives to:

   1. Comply with regulatory requirements thus reducing the cost thereof, and
   2. labour market that is more responsive to economic opportunity that requires
      amongst others the review of regulations and standards for small and medium
      enterprises.

In addition, since we took the decision that access to support must not be
determined by the ability to complete application forms, SEDA has been assisting
entrepreneurs to complete various applications including business registrations with
CIPC, SARS and UIF. Since 2019, a total of 70 512 entrepreneurs have visited
SEDA offices for some form of support. SEDA offices also serve as a One-Stop-
Information Centre on business information.

Ladies and Gentlemen,

The work of the Department and its Agencies is structured and coordinated under
the SMME Support Plan Towards the Attainment of Vision 2030 that was adopted in
2019. This Plan consists of 10 programmes, namely:

   1. SMME-focused Localisation Programme which is enabled through the Small
      Enterprise Manufacturing Support Programme (SEMSP)
   2. Township and Rural Entrepreneurship Programme (TREP)
   3. Incubation and Digital Hubs Roll-Out
   4. Start-Up Nation
   5. Young Entrepreneurs Support
   6. SheTradesZA

7. SMME Business Infrastructure Support
   8. Cooperatives Support
   9. SMME Scale-Up (Expansion)
   10. Informal Businesses Support

   11. To continue implementing the SMME Support Plan, R157 million of the
       transfers and subsidies to SEDA is allocated to the SEDA Technology
       Programme. Through the Technology Programme SEDA is responsible for
       four (4) programmes of the SMME Support Plan, which are:

   12. Incubation and Digital Hubs
   13. Start-Up Nation,
   14. Product Standard Conformity, and
   15. Technology Transfer.

Incubation and digital hubs

The Department has set itself a target to establish 250 incubation and digital hubs by
2024. To date, 101 incubators have been established on the set target of 96 which
include 22 Centres for Entrepreneurship and Rapid Incubation (CFERIs) in TVET
colleges and Universities including an additional four (4) centres at University of
Johannesburg (Soweto Campus), Rhodes University (Makhanda Campus), Nelson
Mandela University (Gqeberha Campus) and University of Venda (Thohoyandou
Campus). Some of the CFERIs at TVET Colleges include those at Northern Cape
Rural TVET (De-Aar and KHATHU Campuses), Maluti TVET College Phuthaditjhaba
Campus, West Coast TVET College (Vredendal Campus) and the new ESAYIDI
TVET College (Umzimkhulu Campus). A full list of the CFERIS is available at the
DSBD and SEDA websites.

SEDA will also facilitate the establishment of an additional 27 new incubators, mainly
in townships and rural areas. The new incubators will assist with the establishment of
approximately 1 290 new enterprises that are expected to create at least 25 000 new
jobs. Some of the areas the additional incubators are planned for underserviced
Provinces and Districts aligned to the Departments SMME Support plan including the
districts of Sarah Baartman, Joe Gqabi, Fezile Dabi, Xhariep, Sedibeng, West Rand,
Amajuba, iLembe, Umgungundlovu, Mopani, Waterburg, Nkangala, Namakwa,
Pixley ka Seme, Dr K Kuanda, The Central Karoo and Overburg. The already
existing 79 incubators have assisted SMMEs to sustain 86, 000 jobs with SMME
ecosystem partners. Some of these existing incubators include those located in
Amatole District Municipality; Ekurhuleni Metropolitan Municipality, King Cetshwayo
District Municipality, eThekwini Metropolitan Municipality, OR Tambo, Harry Gwala,
Ehlanzeni District Municipality. The existing incubator footprint covers most Districts
in South Africa and is the biggest in Africa. Having said that, more work will be done
in partnership with the Private Sector. The full list of the location of the Incubators is
available at the DSBD and SEDA websites. Furthermore, four Digital Hubs were
established, and the remaining 2 hubs will be completed in the 2 and 3rd quarters of
the 2021/22 financial year. The completed 4 Hubs are located in Mpumalanga
(Mbombela and Gert Sibande), Mafikeng and Botshabelo in the Free State.

In line with the goal of the NDP of supporting small businesses through better
coordination of public and private incubators amongst others, the Department has
recently established a partnership with NASPERS LAPs and Foundry programme
with the purpose of optimising resources for the deployment of digital hubs and
support to for Start-ups. The NASPERS partnership is already operational to
complete the Alexandra (Johannesburg) hub. In addition, the Department through
SEDA has also partnered with other private incubators such as the Black Umbrellas
network of 7 incubators, ONE-Bio Life Science Incubator in Cape Town, the
Propeller Incubator in Eastern Cape.

Start-Up nation

Honorable Members - By 2030, ICT and digital sector will underpin the development
of a dynamic and connected information society and a vibrant economy that is more
inclusive and prosperous. A seamless information infrastructure will be universally
available, accessible and will meet the needs of citizens, businesses and the public
sector. This will provide access to the creation and consumption of a wide range of
converged services required for effective economic and social participation, at a cost
and quality at least equal to South Africa’s main peers and competitors.

ICT will continue to reduce spatial exclusion, enabling seamless participation by the
majority in the global ICT system, not simply as users but as content developers and
application innovators”. – (NDP 2030)

In relation to the aspirations of the NDP and as pronounced by the His Excellency,
The President in his State of the Nation Address in 2021 my Department will in the
next few months finalise the National Start-up Nation Framework that will guide
Governments support to Technology or High Growth Start-ups for rapid scale up in
local and Africa Markets. Our work will endeavour to better support grassroots
innovators and small digital businesses that can compete in local, regional and
international markets whilst remaining locally relevant. The envisioned support
instruments will render support to young start-ups and innovators providing needed
infrastructure, industry collaborations, enterprise supplier development linkages,
access to funding and risk capital at Pre-Seed, Seed, Series A and B stage and
investors linkages, build strong firm level teams, revenue (or a paths to revenue)
high touch mentoring and coaching aimed at building strong leadership, disruptive
business models and scalable businesses poised for rapid growth.

Product conformity with standards and technology transfer

The Technology Transfer & Technical Assistance Programme is one of three
technology platforms under Seda. The Programme provided a set on technical and
innovation support intervention as listed below;

1. Open Innovation Challenges – solving core supply-chain and supplier-
   development challenges of large private and public corporates, by working with
   the nation-wide Seda network of branches and business incubators to source
   innovative SMMEs with specific skills, products and services that are able to pitch
   novel solutions to the challenges, thus improving access to markets.

2. SMME Innovation Forums – sector-specific multi-stakeholder events, sharing
   entrepreneurial knowledge and skills for SMMEs, facilitating introduction to latest
   sector innovations, appropriate technology and intellectual property, with
   stimulating peer-networking and forming of productive partnerships.
   Engagements with universities, research institutions, design and innovation
   centres, science councils, for knowledge sharing on relevant technology and
   intellectual property to upscale production. Some examples of sector forums held:
   Industry 4.0, Cosmeceuticals, Automotive, Textiles, Construction, Agro-
   Processing.
3. Investor Pitching – closing the gap between entrepreneurs and investors,
   arranging nation-wide pitching competitions with judging panels of funders,
   together with entrepreneurial pitching masterclasses, supporting innovative
   SMMEs to present their business cases more effectively, thus improving access
   to finance for SMMEs, and impactful deal-flow for investors. Examples of funders,
   and investor criteria, e.g. IDC, Sefa, FinFind.
4. Technology and skills transfer, Intellectual Property (IP) support (Training, first
   stage IP registration and Licensing), Lean Manufacturing systems, Product and
   Process Technology Incentives (Equipment and Machines, Design Software,
   ERP System), Productivity Improvement, Benchmarking, Workplace organisation
   (5S) improving workplace efficiency Productivity / Workplace Challenge, Product
   development support.
5. Quality Health Checks – On-site gap audits to assess suitability of current state
   and future requirements of SMME for management system certifications, product
   conformity testing and design interventions.
6. Management Systems – Assisting SMMEs in implementing their business
   systems that improve productivity and access to national or international markets,
   through compliance to national and international standards. Typical management
   systems include: ISO 9001 Quality, ISO 14000 Environment, SANS 18000 Health
   & Safety, ISO/FSSC 22000 Food Safety, and others such as testing laboratories,
   welding, and medical devices. Once system implementation is complete and
   functioning, further support for certification audits can be assessed.
7. Product Testing – Promoting access for SMMEs to accredited laboratory testing
   and conformity certification of their products to national standards, product
   labelling, and compulsory regulations. Examples: food, beverages, construction
   materials, chemicals, clothing, cosmetics.
8. Product Design – Improving product and packaging design for SMMEs, through
   design-thinking workshops, design clinics for product-specific advice, and design
   support to improve product and packaging functionality and aesthetics.

The Technology Transfer Assistance programme is supporting 44 clients and has
approved support for an additional 79 clients.

The Quality and Conformity assessment programme has supported 53 SMMEs
with QMS interventions and 63 SMMEs with Product Testing and Certification
Support

This Budget allocates an amount of R1.25 billion of the transfers and subsides to
sefa for purposes of implementing:

1. the Small Enterprise Manufacturing Support Programme (SEMSP) to enable
   SMME-focused Localisation Programme,
2. Township and Rural Entrepreneurship Programme (TREP), and
3. SMME financial intermediaries, as direct lenders to SMMEs and co-operatives,
   and part of our contribution to the transformation of the financial services sector

The Small Enterprise Manufacturing Support Programme (SEMSP) to enable
SMME-focused Localisation Programme

Honourable Chairperson

I would like to take this opportunity to reiterate that the Localisation Programme is
not negotiable. I want to clarify that the programme was not thumb-sucked as some
who want to protect the participation of the few in the economy were suggesting. The
programme was also proposed by Business for South Africa in their submissions on
the Economic Reconstruction and Recovery Plan and therefore there is a social
compact between, government, business, labour and communities through the
NEDLAC on it. In addition, the 1000 products that have been earmarked for SMME-
focused localisation and prioritised for support under the Small Enterprise
Manufacturing Support Programme (SEMSP). Equally, the targeted 1000 products
were compiled from the lists submitted by large retailers and manufacturers such as
Pick’nPay, SPAR, Dischem, Clicks, Unilever, Massmart, Aspen etc.

Furthermore, in line with the proposal of the NDP to commit to public and private
procurement approaches that stimulate domestic industry and job creation, the
ERRP has prioritised the finalisation of the Procurement Bill through the National
Treasury. In this regard, the Department is finalising, in consultation with Provinces,
the selection of 250 out of the 1000 products that must be designated over a 4-year
period for public procurement. We proposed the designation of these products 1000
products through the DTIC over a 4–5-year period because we are fully aware of the
need to build local capacity for quantity, quality and price competitiveness.

R268 million of the sefa allocation is to the SEMSP and in this regard and through
the SEMSP, we have already supported at total of 15 enterprises to the value of
R125 million out of the 33 enterprises that were approved to the value of R320
million – we remain appreciative of the partnership of the Black Industrialist
Programme under the Department of Trade, Industry and Competition. Some of the
enterprises supported include:

      Sakhe Engineering and Manufacturing (Pty) Ltd, is a 100% black-youth
       owned business based in East London. The business is owned by
       entrepreneur, Mr. Khaya Madiba (35 years). Mr. Madiba is a qualified
       Structural Engineer with a Masters in Engineering Management who
       registered the business in 2020 for the purpose of acquiring 2 interdependent
       engineering businesses. The businesses are involved in the designing,
       manufacturing and automation of machines and steel fabrication. Through the

funding provided of R12.4million, 30 jobs are maintained in this critical part of
    the economy.
   Mahikeng Meat Market (Pty) Ltd is a black youth owned and managed by Mr
    Keorapetse Ramoenyane. Mahikeng Meat Market was established for the
    main purpose of operating a red meat processing plant in Mahikeng that
    would provide red meat products to organizations in and around Mahikeng.
    The company was funded as a start up with funding of R4.4 million in order to
    renovate premises, set-up the plant, acquire delivery vehicles and obtain
    relevant certifications.
   Christo & Nani Trading (Pty) Ltd is a 100% black South African owned
    company. It manufactures bricks and supplies building materials and energy
    products. The business is located in Bloemfontein in Mangaung, Free State
    Province. The business is 100% owned by Mr. Michael Mabusela. It employs
    15 employees on a permanent basis. They sell huge quantities of bricks to
    both building contractors and households.
   Joyboy Trading cc is an existing business which is owned and managed by
    Matshepo Khumalo and Rejoy Khumalo. The members are husband and wife
    which makes this a family business. Both members are involved in the day to
    day running of the business with Rejoy occupying the role of Operations
    Director and Matshepo occupying the role of General Manager / Admin. The
    business is operating from Makula Section in Katlehong Township in
    Gauteng. The core services of Joy Boy Trading is the design, manufacturing
    and sale of a range of custom-made furniture for households, corporate and
    commercial business. Joyboy Trading approached sefa to raise finance of
    R4.9 million to use for purchase of equipment and for working capital
    purposes.
   Wanotha Services (Pty) Ltd trading as Wanotha Road Signs originally
    specialized in civil construction with focus on road construction, maintenance,
    abrasive/sand blasting, turnkey projects, road marking and sign installation.
    The lack of new work in civil construction prompted Mrs Dladla to change her
    business focus and revert back to manufacturing of road signs which is
    something she knows very well, her long time passion and she has a strong
    network in this sector. This black female owned business based in KZN
    maintains 21 jobs through the funding of R4.9 million.
   Integrate Now [Pty] Ltd which is 100% black owned company of
    entrepreneur Mr. Vincent Mabunda. Its core business is to manufacture and
    provide wholesale/bulk roof sheets to the hardware stores in Nkowankowa
    (Limpopo) and the surrounding areas. They were approved for a loan
    amounting to R4 817 690.23 over a period of 5 years. The said funding
    request was to be satisfied through a Blended Finance Program with a loan of
    R3 150 535.23 [inclusive of initiation fee] and BFP grant to the value of R1
    677 155.00 to finance a start-up metal roof sheeting manufacturing business.
   Mighty Meats (Pty) Ltd is involved in the production and manufacturing of
    processed meat products. These include various polonies, russians and
    viennas. The business currently has an average monthly production rate of 1
    000 metric tonnes of finished product with available capacity to manufacture
    in excess of 2 000 metric tonnes per month of finished product. Mighty Meats
    is located in a rural part of Verulam known as Canelands and employs 114
    staff most of whom reside in informal settlements surrounding the plant. The
    business was approached by one of its existing clients (Africa’s largest food

retailer) for an additional 500 tons of product per month. Sefa funded R14
           million which went toward the purchase of stock for the increased orders as
           well as additional cold storage capacity for the orders.
          Matase Industrial Solutions is a 100% black South African owned
           commercial bespoke diesel generator manufacture and distributor located in
           Ekurhuleni, Gauteng. The business owned by Mr. Tapson Sadiki and employs
           10 employees on a permanent basis and its clients includes Nedbank, ATNS,
           Transnet, Standard Bank, SARS, and Universities. The business received a
           loan and grant combination totalling R14.5m and this will enable the business
           will create 12 new permanent jobs and maintain 10 current jobs.
          Masodi Organics is a black-female-youth owned company that offers ethnic
           hair care products. The business was established in 2018, and its 7 hair care
           product lines are listed with Clicks SA. They received loan funding to the
           value of R1 118 975 for working capital.

Young entrepreneurship programme

The President during the SONA in 2020, His Excellency announced 1000 youth
owned businesses supported in 100 days. The Department worked closely with the
NYDA and was able to deliver on this project under very difficult conditions given
Covid pandemic. We are continuing with this partnership as it is the biggest
contributor in ensuring that we achieve the target of supporting 15 000 enterprises by
2024.

Some of the businesses that we supported include:

         JK Foods which is Manufacturing and selling moringa based spices and
          seasoning
         Inga Atelier which is Manufacturing leather products
         MasterMade which is Manufacturing BBQ Sauces

Some of the young entrepreneurs funded through sefa include under this initiative
include:

      1. Kem Agric Solutions (Pty) Ltd is 100 % black youth owned and operating in
         Musina (Limpopo Province). The company buys and resells agricultural inputs
         [chemicals & fertilizers], marketing of agricultural products and the provision of
         consulting services. The directors of the company participated in the Pitch for
         Funding event held at Musina Municipality. sefa approved and disbursed
         R452 427.00 which was utilized in the purchase of agricultural inputs and the
         provision of salaries and wages.

Township and Rural Entrepreneurship Programme (TREP)

We have previously presented to this House the purpose of the TREP as to elevate
enterprises in the townships and rural areas previously relegated to the second
economy to the mainstream economy, and to further integrate opportunities in

townships and rural areas into competitive business ventures. Some of the township
and rural enterprises such as Taxis, spazashops, motor mechanics, panel beaters,
hair and beauty salons, etc have for time immemorial contributed to the economy of
South Africa without being duly accounted for in the statistical records at an
economic level but at a household level thus minimizing the contribution of townships
and rural areas into the economy but only accounted for as consumers. The R694
million of the allocation to sefa will be channelled towards supporting the TREP.

To date and under the TREP, the Department and its agencies have supported
township and rural enterprises as follows:

The Autobody Repairers and Mechanics programme is allocated R300 million
targeting 800 motor mechanics, panel beaters, auto fitment centres and auto spares
shops in our townships and villages. A total of 950 entities were supported through
this programme in the previous financial year. Those supported include Auto
Precision Engineering (Pty) Ltd, which is a 100% youth – owned business. Its
business operations consist of mechanical engineering focusing on the overhaul,
scheming and re-boring of engines for the taxi industry and informal mechanics
based in Gugulethu, Western Cape. The business is 100% equally owned by Mr
Siphelo Sikolisi, Mr. Thembile Ndlondlo, Mr. Khululwe Tintelo and Mr. Mphindeleli
Qalazive. Due to the high barriers to entry in this market the number of auto
engineering companies in townships are very low due to the cost of the machinery
being extremely expensive. They received loan facility of R2.4-million for the
acquisition of heavy-duty engineering equipment, infrastructure set-up and working
capital.

The spaza-shop support programme

The Spaza Shops Support Programme is a cashflow facility in the form of credit
guarantee administered via the commercial banks such as Nedbank and Standard
Bank that enables South Africa’s spaza shop owners with a valid operating permit to
buy the stock at accredited wholesalers. We are finalising collaboration with iZaka
Bank on the same scheme as part of our contribution towards the transformation of
financial services sector by actively supporting the acquisition of clients by emerging
black-owned banks. The Department supported a total of 10 305 spaza shops in the
previous financial year. A budget of R150 million is allocated towards this
programme targeting 15, 000 entities. We will also commence with the 2nd Phase of
our Spaza Support and continue to partner with those who seek to enable that
ecosystem.

The second phase entails:

      Increase the value of disbursement to spazas so to improve stock levels,
       profitability and sustainability. (R7000 to R15 000).
      Ensure that all approved qualifying spazas have low-cost bank accounts as
       agreed with the partner banks

   Distribute the point of sales machines to all approved spazas in order to
       improve bankability and financial inclusion
      Through (android enabled) e-pos and POS, introduce value added services
       such as ability to sell prepaid airtime, water and electricity.
      Promote the usage of SASSA grant beneficiaries to utilise the Spaza as
       accessible cash back points
      Organise spazas to take advantages of the power of buying in groups so as to
       earn the bulk purchase discounts.
      Bring awareness of Known Value Items (KVIs) within the shop so as to
       improve profitability to shop owners and therefore empower bundle packaging
       of goods
      Participation of spazas on e-commerce platforms

The small-scale bakeries and confectionaries support programme is targeting 1 440
entities. In the previous financial year, 781 entities were supported.

Butcheries Support Scheme, which only commenced in November 2020, we are
targeting to support 1 400 entities. Through this scheme together with the
Department of Agriculture, Land Reform and Rural Development we aim to ensure
that both the smallholder farmers, subsistence farmers and feedlots become
suppliers to the beneficiaries of this scheme. A total of 69 entities were supported
through this scheme in the previous financial year.

The Hairdressers and Personal Care Support Programme. In the previous financial
year 434 entities were provided with non-financial support through SEDA. We target
to support 1200 entities including with business infrastructure.

The Tshisanyama and Cooked Food Support Programme – a total amount of 1 010
entities were supported in the previous financial year and we target to support a
further 1300 businesses.

Access to markets

In the 2020/21 financial year, we have reported on the work the Department has
been doing to support manufacturing SMMEs to place their products in large
corporates markets. We had a target to list 200 products with the private sector
markets and a total of 238 products across 6 product categories were listed in the
following product categories:
      Food and beverages;
      Beauty, skin care and cosmetics;
      Cleaning and hygiene;
      Hair care products and

   Pharmaceuticals
      Clothing, Leather and Textiles.

Honourable Members

We are proud to announce that in the list of listed products, we have added Sihle’s
Brew which is owned by Mr Sihle Magubane, from Kwa-Zulu Natal who
manufactures coffee. After a decade of experience in the field Mr Magubane founded
his own coffee brand which offers five (5) signature blends from Decaf, Expresso,
Signature, Original and Java Press. Sihle’s Brew is now found at your local Pick n
Pay shelves as of 01 March 2021. Sihle also owns a Coffee shop in Randburg, North
of Johannesburg and is also supplying other retailers such as Spar and Food lovers
Market.

In addition, Dermacell Cosmetics and Healthcare of Ms Mapitsi Talana that produces
Aloe Ferox-based skin care range has been launched in 81 Clicks stores across the
country.

We continue to aggressively run our #BuyLocal campaign in partnership with Proudly
South Africa and call on South Africans to choose wisely and buy products made in
South Africa because it contributes to job creation and economic growth. Buying
Locally produced goods is an act of self-service.

Honourable members

SMME expansion/scale-up

The SMME expansion or scale up programme coordinates efforts to support small
and medium enterprises to scale-up their businesses and survive beyond their first
five years through access to working capital, and markets for goods and services. R
288 million has been allocated for the Business Viability Programme, which aims to
assist businesses with potential to scale-up or expand to turnaround their operations
including when they are in financial distress. The first phase of this programme will
focus on businesses that were previously funded by the Department or its agencies
that would otherwise be profitable.

SMME Business Infrastructure Support is aimed at providing SMMEs including co-
operatives with affordable and safe areas to produce, market and sell their goods
and services, and to create business hubs for the surrounding primary producers in
the area in order to stimulate economic activity in the districts.

Types of Business Infrastructure

      Pop-Up Markets and Pop-up Stores
      Retail Space Sharing/ Co-retailing
      Trade markets

     Open markets
        Manufacturing Shared Facilities
        Office Sharing/ Co-Working spaces

SheTradesZA

The President announced the SheTradesZA platform as a programme is to support
and prepare women owned enterprises to increase their participation in local,
regional and global value chains. The platform targets to support majority women-
owned businesses in the agro-processing, manufacturing, renewable energy,
clothing and textile, cosmetics, pharmaceuticals, retail and wholesale, logistics and
payment systems. In this financial year, we are targeting to support at least 2000
women-owned enterprises to participate in supply value chains through the
SheTradeZA platform.

The deputy Minister will articulate the work have and continue to do under our
cooperatives support and informal business support programmes.

Honourable Members

Policy

Access to finance remains a key constraint in the development and growth of
SMMEs and Co-operatives. Most small businesses struggle to access finance due to
perceived risk identified by the lenders. The department will soon table the Draft
SMME Funding Policy of South Africa for public comments. This draft Policy seeks to
make proposals on the coordination of SMME funding across the public and private
sector.

Legislation

Critical to the Department’s mandate is to work on reducing regulatory burdens and
creating a conducive policy and legislative environment to support the growth and
sustainability of SMMEs and Co-operatives. The Department has made great strides
in this regard; notably the proposed amendments of the National Small Enterprise
Bill was published in Government Gazette for public comments. The amendments
mainly attended to the establishment of the Small Enterprise Ombud Service. The
draft Bill also included additional issues on regulating the unfair business-to-business
practice. During 2021/22 financial year, the Department aims to take the National
Small Enterprise Amendment Bill through Parliamentary processes after Cabinet
approval. The Department will also embark on the revision of the Schedule to the
National Small Enterprise Act with an aim to ensure alignment and utilisation of the
SMME definition. For the medium-term period, the National Small Enterprise
Amendment Bill will be promulgated and implemented.

In addition, assistance to municipalities to roll out the Red-Tape Reduction
Programme (RTRP) is an important component of the work of the Department as the

Government aims to create a conducive environment for the establishment of new
enterprises and growth of the existing ones. To ensure that the Department
addresses issues of reducing red tape, three districts will be assisted with rolling out
the Red-Tape Reduction Programme Pilot Administrative Simplification Programme
for SMMEs and Co-operatives. It also intends to amendment the Businesses Act No.
71 of 1991 to provide for the norms and standards and a simplified uniform business
licensing framework. This will invariably standardize the business licensing process
across all municipalities and contribute to the reduction of red tape.

Through our work, we are committed to ensure that the next Development Plan of
South Africa commits itself to a number of millionaires and billionaires the country
must nurture for a true economic transformation.

I thank you!