The Legacy Report of the Parliament RSA's Portfolio Committee on Small Business Development (May 2019 – March 2024)
Farewell Speech on 24th March 2024 by Honourable Faiez Jacobs , Chair of the Portfolio Committee of Small Business, 6th Administration Parliament of South Africa (2019-2024)
Ladies and Gentlemen, Honourable Members, Esteemed Colleagues, Distinguished Guests,
As I stand before you today, I am enveloped in a tapestry of emotions, marking the end of an era that has been both challenging and immensely rewarding. The journey from 2019 to 2024 first as your Whip and as your Chair of the Portfolio Committee of Small Business has been nothing short of a profound odyssey, filled with milestones, learning, and the collective pursuit of economic empowerment and innovation. Let me pause and pay tribute to our previous Chair Cde Violet Siswela, her legacy lives on through her work.
Our tenure was set against the backdrop of unprecedented challenges, including the global pandemic that tested our resilience, adaptability, and commitment to the small business community and the broader South African economy. Yet, through these trials, we witnessed the indomitable spirit of entrepreneurs, the dedication of public servants, and the strength of partnerships across sectors.
Reflections and Achievements:
We embarked on this journey with a vision to stimulate economic growth, support small businesses, and foster an environment ripe for innovation and sustainability. Through legislative reforms, targeted initiatives, and comprehensive support systems, we have laid down the tracks for a future where small businesses thrive as the cornerstone of our economy.
Our committee has been instrumental in:
Gratitude:
This journey would not have been possible without the unwavering support and collective effort of everyone involved. To my colleagues in Parliament, your dedication to our nation’s prosperity has been the backbone of our achievements. To the small business community, your resilience, innovation, and commitment to growth inspire a brighter future for all. My heartfelt thanks also go to our partners in the private sector and civil society, whose expertise and collaboration have been invaluable.
Looking Forward:
As I pass on the baton, I do so with the confidence that the foundation we have built together is strong, and the path ahead is bright. The future of small business in South Africa is vibrant and full of potential. It is incumbent upon all of us to continue nurturing this sector, advocating for supportive policies, and fostering an ecosystem that thrives on innovation, inclusivity, and sustainability.
Parting Words:
In closing, I am reminded of the African proverb, “If you want to go fast, go alone. If you want to go far, go together.” It is the spirit of Ubuntu that has guided us thus far and will continue to light the way for the Portfolio Committee of Small Business. My tenure as Chair may be concluding, but my commitment to the prosperity of South Africa and its people remains unwavering.
Thank you for the privilege of serving you, for the lessons learned, and for the opportunity to contribute to our nation’s narrative. May we all continue to strive for excellence, unity, and progress. Attached find our Legacy report and a summary of its recommendations for your information and comment.
The Legacy Report of the Portfolio Committee on Small Business Development (May 2019 – March 2024) provides a comprehensive account of the Committee's activities, achievements, and challenges during the 6th Parliament. This summary encapsulates the essential aspects of the report, including its structure, key findings, and recommendations for the future.
Overview of the Report:
The report outlines the Portfolio Committee on Small Business Development's oversight of the Department of Small Business Development and its affiliated entities, focusing on Small Enterprise Development (Seda) and Small Enterprise Finance Agency (Sefa). It addresses the challenges encountered and highlights significant achievements during the period. The report is structured into an executive summary and a detailed analysis of the Committee's work, including oversight visits, legislative processes, and engagement with stakeholders.
Executive Summary:
The executive summary emphasizes Parliament's constitutional mandate to monitor government performance, highlighting the Committee's efforts to support small business development through various initiatives. It reflects on the Committee's alignment with government priorities, such as the National Development Plan (NDP) and the Economic Reconstruction and Recovery Plan (ERRP), underscoring the commitment to improving access to finance, markets, and reducing bureaucratic hurdles for small enterprises.
Key Achievements and Activities:
1.???? Strategic Focus: The Committee prioritized areas including access to finance, market access, reducing red tape, and improving business infrastructure. Despite being a newly established Committee, it aimed to address objectives not fully met by its predecessor during the 5th Parliament.
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2.???? Legislative Work: The Committee processed critical legislation, such as the Small Enterprise Amendment Bill (2023), aimed at regulating and supporting small businesses and addressing unfair trading practices.
3.???? Oversight Visits: The Committee conducted oversight visits to assess the impact of its initiatives, although it faced challenges such as budgetary constraints and logistical issues. The visits highlighted the need for continuous monitoring and support for small businesses, especially in the aftermath of challenges like the COVID-19 pandemic and civil unrest.
4.???? Stakeholder Engagement: Engagements with various stakeholders, including government entities, business associations, and small enterprise representatives, were crucial in gathering insights and feedback on policy and legislative proposals.
Challenges and Recommendations:
The report identifies several challenges, including delayed legislative processes, high vacancy rates in the Department and entities, and the need for improved monitoring and evaluation mechanisms. Recommendations for the 7th Parliament include developing a tracking system for executive responses to Committee recommendations, filling critical posts, expanding support for co-operatives, and ensuring more rigorous oversight and support for small businesses.
Here's an analysis and commentary on these recommendations, highlighting their significance and the potential impact on policy and practical outcomes:
1.???? Development of Monitoring Tools (15.1): The call for a system or tool to monitor executive responses to committee recommendations is crucial for ensuring accountability and the effective implementation of policies. Making these recommendations binding could significantly enhance the government's responsiveness and commitment to small business development. This could lead to more targeted and rapid policy adjustments, directly benefiting small enterprises.
2.???? Addressing SMS Level Instability (15.2): The instability at the senior management service level has been a longstanding issue affecting service delivery. The recommendation for the 7th Parliament to monitor and address these vacancies is vital. Filling these positions with competent personnel could lead to improved efficiency and effectiveness in the implementation of small business support programs.
3.???? Payment of Invoices Within 30-Day Period (15.3): The Department's consistency in paying invoices within 30 days sets a commendable standard. Expanding this practice across all state organs, with mechanisms for tracking and enforcement, could alleviate financial pressures on small enterprises, improving their cash flow and operational stability.
4.???? Finance Symposium and External Funding (15.4): The recommendation to pursue external funding opportunities and innovative financing models is timely. With the SMME credit gap being a significant barrier to growth, exploring new financing avenues could unlock potential for many small businesses. The role of fintech and incubators, as mentioned, could be pivotal in providing the necessary support and access to finance for startups and small enterprises.
5.???? Access to Market (15.5 - 15.7): The emphasis on improving access to markets through strategic partnerships and a comprehensive market access strategy is critical. The government's role in facilitating these connections and ensuring small businesses can compete fairly in both local and international markets cannot be overstated. Implementing the 30 percent procurement policy more effectively would represent a significant step towards achieving this.
6.???? Business Premises and Infrastructure (15.8): Addressing the lack of reputable business premises for small enterprises is essential for enabling businesses to meet manufacturing standards and expand their operations. The recommendation to leverage existing state-owned assets and develop shared facilities could provide a practical solution to this issue.
7.???? Red Tape Reduction (15.9): The proactive approach towards eliminating bureaucratic obstacles is necessary for creating a more business-friendly environment. Establishing a parliamentary committee to oversee the implementation of red tape reduction measures could lead to significant improvements in the ease of doing business.
8.???? Energy Relief Package (15.10): The urgent need for an energy relief package highlights the broader issue of infrastructure challenges facing small businesses. Quick implementation could mitigate some of the adverse effects of load shedding and energy costs on small enterprises.
9.???? Policy Development and Review (15.11): The slow pace of policy development and implementation has been a bottleneck. Accelerating these processes, especially for key policies like the SMME and Co-operatives Funding Policy, is critical for providing clear guidance and support to the sector.
10. Regulation of Foreign-Owned Businesses (15.12): Addressing tensions between local and foreign-owned businesses through policy and legislative interventions is necessary for ensuring fair competition and market access for South African small enterprises.
11. Support for Co-operatives (15.13): The lack of funding and support for co-operatives represents a missed opportunity for economic development and job creation. A focused strategy on co-operative development is needed to harness their potential fully.
12. Ministerial Attendance and Oversight (15.14 - 15.17): Ensuring ministers' attendance at committee meetings is essential for direct accountability and feedback. Additionally, increasing the frequency and scope of oversight visits can enhance the committee's understanding of on-ground realities and the effectiveness of implemented policies.
13. Governance and Accountability (15.18 - 15.20): Strengthening governance structures and accountability mechanisms within the Department and its agencies is fundamental for improving performance and audit outcomes. Implementing the recommendations from audit findings and ensuring the execution of legislative mandates are crucial steps toward a more transparent and effective small business development framework.
In conclusion, these recommendations, if implemented, have the potential to significantly enhance the small business landscape in South Africa. They address key systemic challenges and propose practical interventions to support small enterprises in various aspects of their operations, from financing to market access and regulatory compliance. The success of these recommendations will largely depend on the commitment and collaborative efforts of all stakeholders involved.
Conclusion:
The Legacy Report serves as a crucial document for guiding future legislative and oversight efforts related to small business development in South Africa. It underscores the importance of continuous improvement in government support for small enterprises as vital contributors to economic growth and employment. The recommendations provided aim to address past challenges and optimize future opportunities for small business development within the South African legislative and policy framework.