Department of Small Business
Development
ANNUAL REPORT
2014/15
1
Outline of the presentation
1. Vision, Mission and Values
2. Mandate
3. Strategic Outcome Oriented Goals
4. Organisational Structure
5. Legislative Mandate and entities Reporting to the Minister
6. Overview of Departmental Performance
7. Challenges
8. Concluding remarks
2
Establishment of the new dept.
• Proclaimed on 7 July 2014
• Determined the founding principles
• Considered a structure to speak to the
mandate
• Developed a Strategic Plan and APP based on
existing programmes
• Review of programmes underway
3
Vision
A radically transformed economy through
effective
development
and
increased
participation of SMMEs and cooperatives in the
mainstream economy.
4
Mission
To create a conducive environment for the
development and growth of small businesses and
cooperatives through the provision of enhanced
financial and non-financial support services,
competitiveness, market access, promotion of
entrepreneurship, advancing localisation and leveraging
on public and private procurement.
5
Values
•
•
•
•
•
•
Customer focused
Integrity
Honesty
Efficiency
Accessibility
Commitment
6
Mandate
The department will lead an integrated approach to
the promotion and development of small businesses
and cooperatives through a focus on the economic
and legislative drivers that stimulate
entrepreneurship to contribute to radical economic
transformation (that will lead to increased
employment, poverty reduction and reduced
inequality).
7
Strategic Objectives
• To facilitate the development and growth of
small businesses and co- operatives to
contribute to inclusive and shared economic
growth and job creation through public and
private sector procurement;
• Facilitate radical economic transformation
through increased participation of small
businesses and co-operatives in the mainstream
economy;
8
Strategic Objectives cont…
• Advocate
for
a
conducive
regulatory
environment for small businesses and cooperatives to enable access to finance,
investment, trade and market access in an
equitable and sustainable manner;
• Facilitate partnerships with all spheres of
government as well as the private sector to
ensure mutual cooperation that will benefit small
businesses and co-operatives.
9
Start-up structure
Minister of Small Business
Development
Deputy Minister: Private Office
Minister: Private Office
Deputy Minister of Small Business
Development
Department of Small Business Development
1 Director-General L 16
CD: Strategic Management and Executive
Support
Branch: Co - operatives
Directorate Internal
Audit
Branch: Enterprise Development and
Entrepreneurship
Branch: Enterprise Competitiveness
Support
DDG
1 DDG
DDG
CD: Primary Cooperatives
Development
CD: Incubation Support and Supplier
Dev
CD: Market Access Support
CD: Enterprise Development and
Supplier Development
Chief Directorate
Corporate
Management
Chief
Directorate
Finance
CD: Local Economic Development and
Government Relations
CD: Entrepreneurship, Intellectual
Property and Indigenous Knowledge
Systems & Franchising
CD: Incentives, Grants and Loan
CD Gender, Youth and People with
disabilities
CD: Special Projects
CD: Research M & E
CD: Communication and Marketing
CD: National Informal Business
Upliftment Strategy
10
Legislative mandate
In line with these responsibilities, the department’s mandate is
guided by a broad legislative framework that includes:
 National Small Business Act,1996 (No.102 of 1996) amended
2004,
 Co-operatives Act, 2005 (No.14 of 2005) and other applicable
prescripts as listed in the Annual Report.
11
Entities Reporting to the Minister
Name of Public Entity
Enabling Legislation
Mandate and Purpose
Small
Enterprise National
Small Mandated
to
Development Agency Business Act, 1996
implement
(seda)
government’s
small
business
strategy;
design and implement
a
standard
and
common
national
delivery network for
small
enterprise
development;
and
integrate governmentfunded
small
enterprise
support
agencies across all tiers
12
of government
Entities Reporting to the Minister
Name of Public Entity
Enabling Legislation
Small
Enterprise Section 3 (d) of the
Finance Agency ( Sefa) Industrial Development
Corporation Act, No.
22 of 1940 (IDC Act).
Mandate and Purpose
The development of
sustainable
SMMEs
through the provision
of finance. This agency
will start reporting to
the Minister from the
2015/16 financial year.
Consideration of a
reviewed strategy and
programmes of SEFA in
support of DSBD’s
mandate is part of the
review process.
13
Programme Performance
 The department’s overall performance is reported within the
context of government’s 14 Outcomes. The department
contributes to outcome 4: Decent employment through
inclusive growth; and Outcome 7: Vibrant, equitable,
sustainable rural communities contributing towards food
security for all
 Takes into cognisance the in-year institutional changes that
impacted on the services delivery
14
Programme Performance
 For the duration of the 2014/15 financial year, the DSBD
comprised of some of the programmes, that were under the
Broadening Participation Division, of the dti. The majority of
Broadening Participation Division programmes were
transferred to DSBD, particularly those that were supporting
small business and co-operatives development
 During the course of the financial year, the department
focused on establishing Programme 1 (Administration) and
proposed 3 additional Programmes, namely, Co-operatives
Development, Enterprise Development and Entrepreneurship,
and Enterprise Competitiveness Support
15
Programme Performance
Administration
 Negotiated the organisational start- up structure with the
Department of Public Service and Administration and National
Treasury;
 Commenced with a process to reconfigure and align some of
the key programmes to support the new mandate
 Engaged with Board of Directors of Small Enterprise
Development Agency (seda) and Senior Management to start
the process of aligning the mandate.
16
Programme Performance
Human Resource
NO.
OF
PERSONNEL
TRANSFERRED
NO.
OF
PERSONNEL
APPOINTED
STAFF
COMPLIMENT
FROM THE DTI
FROM OTHER INSTITUTIONS
MARCH 2015
140
14
154
AS
AT
31
17
Programme Performance
Finance
 The annual financial statements prepared by the dti also
included the financial performance of DSBD as the two
departments were recognised as one vote for the duration of
the 2014/15 financial year;
 In the opinion of the Auditor General, the financial statements
were presented fairly, in all material aspects, the financial
position of the department of Trade and Industry as at 31
March 2015 and its financial performance and cash flow for
the year ended, in accordance with the MCS prescribed by
National Treasury and the requirements of the PFMA.
18
Programme Performance
 Programme 3 of the dti (Broadening Participation Division)
was selected for evaluation and Auditor General did not
identify any findings on the usefulness and reliability of the
reported performance information (It should be noted that
the majority of functions transferred to the DSBD were under
this programme).
 The overall report of the Auditor General expressed a clean
audit as there were neither material findings on noncompliance nor any significant deficiencies in internal control
matters.
19
Programme Performance
 Progress recorded in 2014/15 financial year which includes
 successful launch of two Centres for Entrepreneurship in March 2015
that have been established,
 Implementation of an Integrated SMMEs and Co-operative
Development Framework and Action Plan;
 A pilot report on the Informal Traders Upliftment Programme (ITUP)
was produced and tabled at the Project Steering Committee
 783 SMMEs funded through Black Business Supplier Development
Programme (BBSDP) and 207 cooperatives funded through
Cooperatives Incentive Scheme (CIS)
 The Department continued to support seda on the implementation of
the Seda Technology Programme (stp) Programme
20
National Informal Business Upliftment
Strategy (NIBUS)
Strategic Outcome-Oriented Goal 3: Facilitate broad- based economic participation through
targeted interventions to achieve more inclusive growth
Output
Performan
ce
Indicator
Annual
Targets for
2014/15
Actual Output
Reasons
for
Variance
Finalisation
and
implementation
of the National
Informal
Business
Upliftment
Strategy
(NIBUS)
Reports
produced
on the
pilot
implement
ation of
the
NIBUS
Pilot
implementat
ion of the
NIBUS and
a report
produced
Preliminary pilot
N/A
report on Informal
Traders Upliftment
Programme (ITUP)
was produced and
tabled at the Project
Steering Committee.
Corrective
Action
N/A
21
Centres of Entrepreneurship
Strategic Outcome-Oriented Goal 3: Facilitate broad- based economic participation through
targeted interventions to achieve more inclusive growth
Output
Performance
Annual
Actual Output Reasons Corrective
Indicator
Targets for
for
Action
2014/15
Variance
Supported the
establishment and
functioning of centres
of Entrepreneurship
Number of
MOAs to
establish
centres of
entrepreneurshi
p
Two (2)
MOAs for
approval to
establish
centres of
entrepreneu
rship
Two Centres N/A
for
Entrepreneur
ship have
been
established
and
launched in
March 2015
N/A
22
Programme Performance
Strategic Outcome-Oriented Goal 3: Facilitate broad- based economic participation through
targeted interventions to achieve more inclusive growth
Output
Performance
Actual
Reasons for
Corrective Action
Indicator
Performance
Variance
Against Target
Target
Actual
BBSDP
Implemented
Number of
enterprises
approved for
BBSDP
1 280
783
Fewer
Simplified
applications
application process
received
and
Partnerships
with
processed
the other spheres of
government
Capacity building for
Seda
and
Sefa
branches
23
Part 2: Performance Information
Grants and Incentives support
 The department supported 783 eligible enterprises through
the Black Business Supplier Development Programme (BBSDP)
and 207 through the Co-operative Incentive Scheme (CIS);
 Whilst the performance is below target, the department has
devised a strategy to address the under-performance, which
includes actions such as:
 Training SEDA and Sefa branches on the department’s incentives
 Proactive engagements with SMMEs and Cooperatives
 Partnerships with the private sector, provincial government, agencies
and municipalities
 Simplification of application processes and guidelines
 Review of the guidelines and simplication of the application process
24
Implementation of Cooperatives Act as
amended
SG 3: Facilitate broad-based economic participation through targeted interventions to achieve
more inclusive growth
Output
Performance Annual
Actual Output
Reasons for
Corrective action
Indicator
Targets for
variance
2014/15
Implement
ation of the
Cooperative
Act as
amended
Implementation
report produced
on the phased –
in
operationalisatio
n of the Cooperative
development
agency (CDA
and Co
Operative
Tribunal)
Target not met.
Phased-in
operationali
zation of the
CDA and
Tribunal and
implementat
ion report
produced
This function
was moved to
the new
department and
no budget was
allocated for
this output.
DSBD decided
to defer this
activity to the
new financial
year 2015/16
The Cooperatives
Business Unit to
motivate for additional
allocation to fund this
output during the midterm expenditure
adjustments estimates
during Q2 2015/16
financial year.
25
National Strategic Framework on Gender
and Women Economic Empowerment
Strategic Outcome-Oriented Goal 3: Facilitate broad- based economic participation through
targeted interventions to achieve more inclusive growth
Output
Performance
Annual
Actual Output
Reasons for Corrective
Indicator
Targets
Variance
Action
for
2014/15
Implement the
Submit for
Finalise
Target not met.
National
The department
National
approval the
and reStrategic
has decided to
Strategic
National
submit the
Framework
change focus
Framework on Strategic
National
not
from framework
Gender and
Framework on Strategic
submitted to to strategy
Women
Gender and
Framewor
Cabinet for
Economic
Women
k on
approval.
Empowerment Economic
Gender
Empowerment and
Women
empower
ment to
Cabinet
for
approval
26
Youth Enterprise Development Strategy
Strategic Outcome-Oriented Goal 3: Facilitate broad-based economic participation through
targeted interventions to achieve more inclusive growth
Output
Performance
Annual Targets
Actual
Reasons for Corrective
Indicator
for 2014/15
Output
Variance
Action
Finalisation and Implementation Pilot
implementation report on YEDS implementation of
of Youth
produced
the YEDS and
Enterprise
report produced
Development
Strategy
(YEDS)
Target not
met.
The
YEDS
was migrated
with the Youth
Directorate to
the
Department of
Small
Business
Development,
and approval
by EXCO and
Minister
delayed.
Programme to
be rolled out
during
the
2015/16
financial year in
partnership with
Provinces
27
Seda Technology Programme
SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more
inclusive growth
Output
Performance
Annual Targets Actual Output
Reasons for
Corrective
Indicator
for 2014/15
variance
action
Implementation Number of jobs 1650
of the seda created
Technology
through stp.
Programme
(stp)
Number of
established
incubators
supported
through stp.
48 (inclusive of 6
new)
1963
Higher than
N/A
expected
performance of
the construction
and agriculture
sector.
The stp
supported 48
established
incubators, and 6
new incubators
N/A
N/A
28
Seda Technology Programme
SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more
inclusive growth
Output
Performance
Indicator
Implementation
Number of clients
of
the
seda assisted through
Technology
technology transfer
Programme (stp)
programme
Annual
Targets
for
2014/15
63
Actual Output
Reasons for
variance
Corrective action
42
Insufficient
funds to assist
qualifying
clients
Motivation for an
increase in budget
allocation in the next
financial period.
29
Integrated SMMEs and Cooperatives Development
Framework
Strategic Outcome-Oriented Goal 3: Facilitate broad- based economic participation through targeted
interventions to achieve more inclusive growth
Output
Performance
Indicator
Annual Targets for
2014/15
Actual Output
Reasons for
Variance
Implement an
Integrated
SMMEs and
Co-operatives
Development
Framework and
Action Plan
Integrated
SMMEs and Cooperatives
Development
Framework and
Action Plan
Implement Integrated
SMMEs and Cooperatives
Development
Framework and
Action Plan and
report produced.
The task team
N/A
meeting held on
all four quarters
and quarterly
reports produced
that reflect on the
implementation
of the framework.
Corrective
Action
N/A
30
Summary of Challenges
• The programmes are still structured as per the dti’s strategic
objectives and the report is therefore aligned to the dti’s
strategic objectives, going forward we will be aligned to the
new mandate
• Delays in the transfer of functions from the dti to the
Department of Small Business Development
• In certain instances functions were transferred without funds.
• Budget was centrally controlled with Intra-transfer of funds
within the dti and this had a bearing on the expenditure
patterns and allocation. Own budget only given this year
• Other functions were dependent on the dti capacity which is
centralised through particular business units e.g. research,
procurement, etc
• The transitional process affected delivery
Budget
Directorate
Current payments
Budget
Expenditure
Variance
130 722
83 957
100 883
73 753
29 839
10 204
46 765
27 130
19 635
998 315
288 342
65 000
126 368
502 282
16 320
3
998 294
288 336
64 966
126 368
502 282
16 320
22
21
6
34
0
0
0
-19
4 683
1 611
3 072
1 133 720
1 100 788
32 932
Compensation of employees
Goods and services
Transfers and subsidies
BBSDP
CIS
SEDA Technology programme
SEDA Agency
SAWEN
Households
Payment for capital assets
TOTAL
THANK YOU
33