Understand small business environment - MP

(Picture: Shutterstock)
(Picture: Shutterstock)

Cape Town - There is a need to share a common understanding of problems that are being addressed by developing cooperatives and SMMEs in South Africa, including the environment in which they operate, according to Ruth Bhengu, a member of parliament (MP) and chair of the Portfolio Committee on Small Business Development.

That is what became clear from meetings with various stakeholders.

Secondly, there is a need to package support systems in a manner that relates to both the problems that are being addressed through Cooperatives and SMMEs as well as building capacity thereby enabling them to play the expected role efficiently and effectively.

Issues of access to market, access to funding, government policies that affect cooperatives, SMMES and established business negatively, late payment of suppliers by government, lack of coordination and adequate training particularly on the concept of cooperatives and entrepreneurship have also been raised.

"This means that there is a need for changing our approach in these areas so as to create a friendly environment for development of Cooperatives and SMMEs including their participation in the main stream of the economy," said Bhengu.
Government’s decision to establish a department of small business development (DSBD), with a mandate of developing cooperatives and small, medium and micro enterprises (SMMEs) needs to be understood in the context of radical socio-economic transformation, according to Bhengu.
She said on Friday this decision relates to the objective of building a developmental state with citizens that are actively participating in their own development.
The DSBD is also mandated to sign transversal agreements with other government departments for purposes of coordinating support service and opening a sustainable market for cooperatives and SMMEs.
"Therefore a new way of doing business both at government and private sector level is required," said Bhengu in a statement.
The Portfolio Committee on Small Business Development is continuing to hold meetings to assess the state of cooperatives and SMMEs in South Africa and the effectiveness of existing support systems.

In that process the committee has in the past few weeks engaged with a number of stakeholders that are supporting cooperatives and SMMEs.

The stakeholders include the departments of trade and industry, economic development and, finance, the Small Enterprise Finance Agency (Sefa), the Small Enterprise Development Agency (Seda), Ithala Bank, the South African National Apex Cooperative (Sanaco), the National African Federated Chamber of Commerce (Nafcoc), the AHi, Statistics SA and Pick n Pay.

Lekgotla on business development

An ANC study group on small business development has also held its own Lekgotla to align the mandate of tje DSBD to the resolutions of the 53rd conference of the ANC on economic transformation and the Elections Manifesto of the ANC for the 2014 general elections.
This aspect was aimed at ensuring that the DSBD’s programmes and models for developing cooperatives and SMMEs are aligned to issues of poverty, unemployment and inequalities and are informed by what the majority of the electorate voted for as well as the fact that South Africa has  features of the first world and the third  world.

The committee will hold its strategic plan from September 25 to 26 to look at key performance areas, proposed programmes and configuration of the DSBD including the financial implications.
"The most important aspect of the strategic plan of the department the committee would want to see in order to support the budget of the department, is the change that would be seen as a result of having implemented the strategic plan, in other words we would focus more on measurable expected end results in terms of poverty reduction and job creation," said Bhengu.
"Our view is that the approach to job creation should be aimed at enabling people, especially the previously disadvantaged to own the means of production."
The approach to poverty reduction should be aimed at reducing dependency of poor families on government to provide them with social grants and free services in her view.

"Where possible, a permanent exit strategy of poor families from the social grant and indigent registers should be created," she said.

"There is a crucial need for a broader understanding of the concept of cooperatives and how they could help in develop and enable SMMEs to grow and compete in the main stream of the economy."

She said it is also important to understand the concept of cooperatives in the context of building a social capital and facilitating sustainable development.
This is what influenced the decision of the committee to advocate for the inclusion of the word "cooperatives" in the name of the department.
Accordingly, Minister Lindiwe Zulu has reported to the committee that the issue of including the word Cooperatives in the name of the department is receiving attention.
"The creation of a sustainable market for cooperatives and SMMEs by government and the retail sector in South Africa is central to addressing challenges of poverty, unemployment and inequalities," said Bhengu.
"Linking the training and skills development process to service delivery would help the country to use its limited resources to achieve maximum results."
However, she said that could only be achieved through effective coordination of existing resources and the ability of the DSBD to sign transversal agreements with other government departments with the aim of opening a sustainable market for cooperatives and SMMEs, taking advantage of the existing programmes as well as introducing a developmental approach to service delivery.

- Fin24

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