James-Brent Styan, Page 14 Stein­hoff: From JSE dar­ling to a com­plete out­cast

The Star Early Edition - - BUSINESS REPORT - Bernard Swanepoel BERNARD SWANEPOEL CHAIR­PER­SON OF THE SMALL BUSI­NESS IN­STI­TUTE

THE AR­TI­CLE pub­lished by Dr Thami Mazwai, a con­sul­tant to the Min­is­ter of Small Busi­ness De­vel­op­ment, ti­tled “Reck­less Re­marks… Why the du­bi­ous re­search saga by SBI and SBP?”, refers. While he is per­fectly en­ti­tled to con­sider the Small Busi­ness In­sti­tute’s re­marks reck­less (pre­sum­ably our call for the doors to the min­istry to be closed and the ur­gent work of small busi­ness sup­port to be car­ried on else­where in gov­ern­ment), Mazwai can­not ques­tion the find­ings of our re­search part­ner, the Small Busi­ness Project (SBP). He has also con­fused the facts about SBP work­ing well for many years with the depart­ment and other agen­cies of gov­ern­ment sup­port­ing SMEs.

Had he read the me­dia re­ports closely, he would have seen that the early deeply con­cern­ing re­sults of our SME base­line study are based on data col­lected by the gov­ern­ment it­self – new firm-level in­for­ma­tion cre­ated by the SA Rev­enue Ser­vice and the Na­tional Trea­sury from tax data. This af­fords new in­sights into firm cre­ation, em­ploy­ment and growth in South Africa, and should al­ready have been mined by the depart­ment to in­form its work.

As the de­fender of the depart­ment we are hold­ing to ac­count, Mazwai should have pro­vided a list of its ac­com­plish­ments. In­stead, he sug­gests that it is “emo­tion­al­ism” for us to speak plainly about a min­istry fail­ing to help build the SME sec­tor to play a role in trans­form­ing so­ci­ety, some­thing we agree whole­heart­edly needs to hap­pen.

Our call to do away with the min­istry is far from orig­i­nal: As re­cently as in March this year, mem­bers of the par­lia­men­tary port­fo­lio com­mit­tee ques­tioned whether there is a need to keep the depart­ment. They have con­sis­tently taken the min­is­ter to task for un­der-spend on the depart­ment’s bud­get and fail­ure to com­ply with pub­lic ser­vice reg­u­la­tions deal­ing with the depart­ment’s or­gan­i­sa­tional struc­ture (or lack of it). Con­cerns heard in par­lia­men­tary hear­ings cit­ing mal­ad­min­is­tra­tion, lack of ca­pac­ity and dys­func­tion­al­ity in the depart­ment are in the pub­lic do­main. Fail­ure by the min­is­ter to, as yet, present a na­tional strat­egy for small busi­ness de­vel­op­ment, four years af­ter the pre­vi­ous strat­egy closed and four years fol­low­ing her ap­point­ment and her depart­ment’s es­tab­lish­ment, is a clear in­dict­ment of her fail­ure to ad­dress her man­date.

It means that pro­grammes for small busi­nesses are de­vel­oped and in­sti­tuted in a vac­uum, and poli­cies are based on lit­tle, if any, firm-level ev­i­dence-based re­search.

Rather than is­su­ing a pub­lic threat to the SBI and the SBP – that the “depart­ment will take ap­pro­pri­ate ac­tion” – the gov­ern­ment should em­brace our at­tempt to present to the coun­try a base­line study of facts on the na­ture, char­ac­ter­is­tics, size and dy­nam­ics of this very im­por­tant seg­ment of our econ­omy.

It will pro­vide the ev­i­dence on which to base more struc­tured poli­cies and tar­geted de­vel­op­ment strate­gies; its find­ings will be open-sourced and the method­ol­ogy peer re­viewed. If Dr Mazwai needs a scape­goat for the depart­ment’s poor per­for­mance, he should di­rect his depart­ment’s “ap­pro­pri­ate ac­tion” to me and not the SBP. It is the Small Busi­ness In­sti­tute, as the “big voice for small busi­ness”, which made the plea for a more strate­gic, ca­pa­ble unit to ad­min­is­ter SME pol­icy.

We would hope that should the min­istry re­main in the Pres­i­dent’s cabi­net – one he has said he will shrink – it will move with the same alacrity to do its job as it has to “shoot the mes­sen­ger” by try­ing to bully civil so­ci­ety or­gan­i­sa­tions into si­lence. Our mo­ti­va­tion is sim­ple: to gal­vanise a new com­pact to ful­fil the Pres­i­dent’s wish that “the growth of our econ­omy will be sus­tained by small busi­nesses, as in the case of many coun­tries”.

It means that pro­grammes for small busi­nesses are de­vel­oped and in­sti­tuted in a vac­uum.

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