Press release: SBI is disappointed SMEs remained in Departmental Silo, pledges to work with new DSBD.

May 30 2019

The Small Business Institute is disappointed that the Small Business Development Department (DSBD) has been retained as part of the sixth administration. Many ministries have small business desks, or support functions; a separate department adds overlap and another bureaucratic layer to the cabinet.

“The government should be concerned principally with economic growth,” said SBI executive director Bernard Swanepoel. “In most countries, the entrepreneurial dynamism of SMEs provides that growth and job creation. Thus far, the DSBD has done little to promote entrepreneurs, which continue to fail at an alarming rate in South Africa.”

However, the SBI commends President Cyril Ramaphosa on trimming back the size of the cabinet, and pledges to work with newly appointed minister for small business development minister Khumbudzo Ntshavheni.

“We want to urge Minister Ntshavheni to ensure that the Department is adequately focused and does what it was supposed to do which, sadly, it never managed in its five years of existence,” said Swanepoel. “Coordinating the work of all departments and agencies to minimise red tape for SMEs and ensure that policies and programmes are supportive requires determined attention.” 

The SBI urges the Minister to prioritise:
–  The rollout across all departments of the new definitions of small business which were gazette last year by the outgoing administration – these definitions harmonise the varied definitions of SMEs in the country;
–  The implementation of Section 18 of the National Small Business Act which requires all departments and agencies of government to carry out regulatory impact assessments on small business of laws, regulations and policies they are considering; 
–  Early payment of small suppliers by state departments and agencies; and
–  The audit of state’s R15.5 billion support for small business.

Swanepoel says: “One of our reservations about the DSBD was the fact that it relegated small business to a siloed definition – as a sector of the economy. Instead, 98.5% of the formal economy are SMEs, a segment of the economy operating across every sector,” says Swanepoel. “If the new minister addresses her mandate properly to free SMEs to start, run and grow, her work could help put South Africa on a new path to transformation and inclusive growth.

The SBI has asked for an engagement with the new minister.