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MPs slam Zulu's department as invisible, unnecessary

May 18 2017 16:44
Liesl Peyper, Fin24

Cape Town – Opposition parties on Thursday dismissed the Department of Small Business Development as unnecessary, invisible and unavailable to fulfil a supporting role to small and medium enterprises. 

During a debate on the Department’s budget vote in Parliament, the Democratic Alliance’s (DA) Toby Chance told Small Business Development Minister Lindiwe Zulu that she was “invisible” and that “97% of businesses in South Africa” has never contacted her department, even three years into its existence. 

“How can I make such an assertion? When you run a business you register it through the Trade and Industry, SARS gives a tax number and you approach your family and friends for funding. Where does this department fit in? Nowhere,” Chance said. 

READ: Junk status signals hard times for small business

Zulu failed to spend 7% of her budget, yet she wants more money, he added. 

Thilivhali Elphus Mulaudzi from the Economic Freedom Fighters (EFF) said in his speech that Zulu’s department shouldn’t have existed in the first place and that it is merely a branch of the Departments of Economic Development and Trade and Industry, respectively. 

Nqabayomzi Kwankwa from the United Democratic Movement (UDM) said the confusion and the overlaps between Zulu's department and that of Trade and Industry and Economic Development should be cleared up as a matter of urgency, especially in respect of the incubation programmes that all three offer. 

‘Teething problems’ 

In her budget speech, Zulu acknowledged her department had teething problems and due to systemic reasons she could not in the past spend the budget allocated to her portfolio.

Zulu also said the R1.44bn appropriated to her department is “far below what is needed”. 

READ: More tenders for SMMEs, urges Zulu

The department is a mere three years old and came into existence when President Jacob Zuma was elected for a second term in office in May 2014. 

“Three years are a short time in which to establish a new state department,” Zulu said.

“However, we’ve managed to set up a sound administration since 2014, which resulted in an unqualified audit in the 2015/16 financial year.” 

Zulu who in the recent past has been very outspoken about radical economic transformation and the need to change the Constitution to allow for land expropriation without payment, did not elaborate on these matters in her budget speech, except to say that the ANC-led government will pursue radical economic transformation “relentlessly and unapologetically”. 

‘Small businesses is big business’

Zulu said her department has succeeded in changing the mindset in South Africa in that there’s a realisation that small businesses are the lifeblood of South Africa’s economy. 

“South Africa has had a big business mindset in the past,” Zulu said, “but this is changing.” 

She referred to a recent study in which South Africa was ranked second in terms of the quality of entrepreneurs and development of entrepreneurs. 

READ: Mentorship needed for entrepreneurial success in SA - CEO

Her department is however also cognisant of other studies, showing challenges with “sustaining” entrepreneurs. 

“But we want the best of both worlds – quality and quantity of entrepreneurs,” Zulu said. 

The recent credit ratings downgrades, Zulu said, will negatively impact on small business and the sector’s ability to recover is limited. “The department is doing research and consulting to craft a response to view what impact the downgrades will have on the sector."

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