Soweto Business Access chairperson Mputhi Mputhi has slammed the Small Business Development Department for not understanding the struggles of SMMEs based in townships and rural areas. This follows a webinar, hosted by various SMMEs and lobby groups from around the country, to discuss the impact of underspending by the Department of Small Business Development (DSBD).
According to Mputhi, the fact that the department was underspending, betrayed its very purpose. He called on the department to partner with township-based chambers of commerce, forums and associations to understand the everyday realities of SMMEs.
“The Covid-19 debt relief finance scheme had a budget of R513-million, but the Small Business Department only spent R316-million,” he said. “The DSBD Spaza Shop Support Programme had a budget of R175-million, but actual expenditure had been R18-million. “Even though DSBD had budgeted R30-million support for cooperatives, only R2.79-million of that was spent.”
Mputhi accused the department of killing small businesses. “The question then becomes whether this is fair or legal,” he said. “Legal opinion dictates that there are bases on which there is the legal ground to make the department accountable because, in the course of the department denying people what is rightfully theirs, they are in contravention of their rights,” Mphuti said that former commissioners of the National Planning Commission, Dr. Thami Mazwai and Themba Dlamini, advised the SBA against going the legal route, but he warned it was still an option.
He said the SBA wanted to meet government stakeholders to understand why the money was not being spent. “The second step is to inform the government that there are established business formations in townships that are prepared to partner with government for the delivery of services to ordinary SMMEs in townships and rural areas,” the chairperson told Vutivi News.
“This will be so that should the government be unable to provide services, it does not mean that there should be no services at all, but those other stakeholders can be empowered to do what government is unable to do. “There are township forums, chambers and associations that are well entrenched in township business and are capable of providing these services.”
Mputhi also commented on the DSBD being amongst government departments that were failing to pay SMME suppliers in 30 days. He said it was very unfortunate that the department, which small businesses had lobbied for, failed to pay suppliers timeously. “It was us as small businesses that said that the Department of Trade, Industry and Competition was not catering for emerging markets in townships and rural areas and that we needed a special department,” Mputhi said.
“The failure of the department to pay suppliers in 30 days points to the fact that the department needs to work in partnership with people and stakeholders that understand SMMEs. “It is only when the DSBD forms partnerships with local chambers and forums that they can be able to understand some of the hardships small businesses are facing.”