Press statement: Department of Small Business Development to underspend by between R96 and R125 million

Date: 24 March 2017 Release: Immediate Type: Press Statement In the Portfolio Committee on Small Business Development this week, it was revealed that the Department of Small Business Development is projected to underspend on its 2016/2017 budget by between R96 and R125 million due to incapacity, poor programme implementation and problems with transferring functions from the Department of Trade and Industry. This projected underspend represents a staggering 7% to 9% of its budget. Recent statements by Minister of Small Business Development, Lindiwe Zulu, claiming that she needs more money to fulfil her mandate are absurd if she cannot even spend what has already been budgeted. Furthermore, the department has failed to deliver on 79% of the recommendations made by the committee, most of which the department agreed with, since the committee implemented a tracking system on its reports and minutes. The fact of the matter is that Minister Zulu should be focussing her efforts to ensure that her budget is spent on supporting and assisting small businesses so that they can, in turn, create employment for the millions of South Africans who have given up hope of ever finding a job. The affected programmes are the National Small Business Upliftment Scheme, the Enterprise Incubation Programme and the Cooperative Incentive Scheme. In meetings with the Department of Performance Monitoring and Evaluation (DPME) and Treasury, the mandate and strategy of the department came into question. The DPME subsequently initiated a review of the department's strategy by an independent consultant which is due to report in December 2017, further delaying the urgent need for the department to have an agreed strategy and Annual Performance Plan. Both the DPME and Treasury are pushing for the department to play a greater role in co-ordinating and monitoring overall government expenditure on Small and Medium-sized Enterprises, of which the Department's own budget represents less than 30%. Until the department gets to grips with its mandate, strategy and under-capacity issues, it will continue to fail small businesses and therefore continue to fail in creating employment. The DA will continue to push for the department to assist small businesses and spend the money they have so they can be the job-drivers they’re meant to be.