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Small Business Development Minister Lindiwe Zulu told the Mail & Guardian last month that her department needed R5-billion to carry out its mandate to empower emerging entrepreneurs in line with President Jacob Zuma’s call for radical economic transformation.

But Zulu’s department has now been criticised for failing to spend R140-million of the R1.3-billion allocated to her department to support small- and medium-sized enterprises (SMMEs), seen as the solution to growing the country’s economy and create much-needed jobs.

According to its second-quarter performance report to Parliament, by September last year the department had already underspent R37.7-million of its budget.

In an interview last month, Zulu said her department had demonstrated its ability to spend its money effectively. But treasury officials, who did not want to be named, questioned Zulu’s appeal for a larger budget when her department was unable to spend a portion of the R1.32-billion it had been allocated for the 2016-2017 year.

In his budget speech last month, Finance Minister Pravin Gordhan said he would allocate R3.9-billion to Zulu’s department over three years.

Speaking to the M&G this week, Zulu was quick to defend her department, saying it was still in its infancy and needed time to perfect its systems.

“This is a new department that is still trying to put its systems in place. The systems of the department can’t be perfect within two and a half years of governance — it’s not possible,” Zulu said.

“There is an explanation. But, of course, for me I’m not happy with any money being returned, let me make that straight. Because any money needs to go to who we serve.”

Zulu also lamented the understaffing of her department, which has fewer than 200 employees and needs to fill two vacant deputy director general positions and some chief director and director positions. She said this staff shortage left the department with little capacity to implement its programmes effectively.

Zulu’s department is under pressure to drive the growth of South Africa’s economy. Government expects her department to create 90% of the 11-million new jobs targeted for 2030. The minister has said a larger budget is needed to build the capacity of small businesses in line with government’s radical economic transformation plan.

She warned against her department’s underspending being used as an excuse by treasury not to fund radical economic transformation programmes.

“If people want to go the route of saying ‘no you’re returning [unused] money’ or whatever the case might be, so be it. But the fact of matter is that if government says it’s got a radical economic transformation [plan] it means there needs to be more money,” Zulu said.

Democratic Alliance MP and small business development portfolio committee member Toby Chance said Zulu’s explanation about her department being young was not reason enough not to spend allocated funds.

Chance said: “I do not accept Minister Zulu’s excuse that the department is still new — it has been operational for two and a half years. It did only achieve full independence from its mother department, the DTI [department of trade and industry], in April 2016, but a year has passed since then.”

Zulu said, although systems were being put in place to eradicate underspending, the department was not prepared to spend recklessly just to use all its funds. “You can’t just have money and then think that because you have money you can just spend it any way you want.

“You need to make sure that you put systems in place for monitoring and evaluation. Make sure money goes to [the] right people for [the] right reasons”. — Additional reporting by Matuma Letsoalo

https://mg.co.za/article/2017-03-10-00-small-business-fails-to-spend-budget-yet-zulu-wants-more-money/

On – 10 Mar, 2017 By Dineo Bendile

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