Yet another ministry?

2014-04-25 00:00

PRESIDENT Jacob Zuma plans to add yet another ministry to his already hefty line-up, which will bleed the taxpayers even more. The new ministry, it’s said, will look after small, medium and micro business enterprises (SMMEs).

This, the Times newspaper reported recently, will increase the number of national government departments to 35 — and push up the state’s wage bill, which already devours R450 billion of the R1,25 trillion total budget, or about 35% of government spending.

Since first assuming office in 2009, Zuma has created seven new government ministries.

While speaking at a breakfast briefing hosted by the SA Chamber of Commerce and Industry almost two weeks ago, ANC secretary-general Gwede Mantashe said the creation of the small-business ministry is imperative.

“We think that if we can have that ministry it will unlock finances to small businesses. That idea is [being] debated [in the ANC] and we hope it will be implemented.

“Maybe we need a ministry that focuses on SMMEs and co-operatives,” he said.

On the face of it, this is a noble idea from Zuma, who, since taking office, has split and created new departments in an effort to give them a more direct line of service delivery. Implementation has, of course, been a different story.

Intervention in the small-business sector is important considering the country’s employment crisis. Experts say that to create the five million jobs bandied about by the government, a million small businesses need to be created.

This sector could unlock real economic opportunities for all those who so far have just been looking in through the window. And hopefully, it would unleash youth potential and lead to much-needed innovation in our economy.

This, however, should not be allowed to be hijacked by those the SACP secretary general and Minister of Higher Education Blade Nzimande aptly calls the tenderpreneurs.

With the tenderpreneurs there is no innovation. The business begins and ends with money from the government, and to stay in business you have to pursue the next tender, which is why this whole system is fraught with corruption.

There should be an investment in real small businesses with the intention of pushing them beyond the daily grind of just putting food on the table.

In many cases, the youth, especially black youth, open small-scale business such as spaza shops that remain small until they fold, without having graduated to something bigger.

The youth, black youth in particular, should be able to see business as a long-term plan that will extend beyond the dinner table and become a significant player in the community, as well as in the country’s economy.

The proclivity of those who experience small-business success to squander it all by showing off needs to stop.

A former university colleague once told me that the problem with South African youth, again, black youth in particular, is that we live for today, never planning for tomorrow.

Making an example of the black youth in business, he said: “A white youth and a black youth can both inherit a thriving grocery store. Give him a few years, the white youth would have expanded that grocery shop to several other shops with a notable name.

“The black youth with the same opportunity, more often than not, will have reduced that grocery store to a tuck shop if not closed it down altogether, by treating it as his personal bank account, showing off to friends and several girlfriends (who previously had not given him one look).”

This even applies to those receiving government tenders. They get paid and spend it on the biggest, shiniest car that screams out “I’ve arrived” and swallows up most of the capital that could have been used to grow that business beyond just tenders.

But, while I commend the president on this initiative and hope it will work, as previous attempts to bolster this sector have been a miserable failure, I do not believe a whole new ministry is needed.

Surely the government already has capacity to manage this sector without increasing the staff complement, wage bill and using up millions of already overstretched resources that could be directed elsewhere?

I doubt that the several new departments Zuma has already created have lived up to his expectations. A case in point is the splitting of the Department of Education to Basic and Higher Learning. There has been no substantial progress in either to justify the money spent. The Department of Women, Children and People with Disabilities has also not lived up to expectations. There was the Umsobomvu Youth Fund and the National Youth Development Agency, which were supposed to be part of that development, but instead swallowed billions of rands without tangible results.

As a suggestion, the president must locate this initiative under Minister Ebrahim Patel of Economic Development. It could be my ignorance here, but he does not seem to be very busy (not even a sod turning in the past two months).

This would save Treasury from any unsustainable wage-bill demand and give Patel something to do.

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