R9.6 billion allocated for SMMEs, but no indication of how funds spent will be monitored

Premier Oscar Mabuyane recently announced that over R9.6 billion of the Provincial Government’s annual budget will be set aside for SMMEs, but there has been no indication of how the spending of these funds will be monitored.

The Democratic Alliance believes that small businesses are the driving force of the economy, and that entrepreneurship needs to be encouraged for job creation but is concerned that the lack of sufficient monitoring creates an environment for corruption and maladministration, where public funds can be abused.

We have already seen how the abuse of funding earmarked for SMMEs can have dire consequences, such as the multiple assassinations around the R21 million drain cleaning project debacle in Nelson Mandela Bay.

There are also countless examples of militant SMMEs holding projects to ransom, demanding their share of funds allocated.

Premier Mabuyane has indicated that R7.2 billion, or half of provincial government’s total Goods and Services budget, will be set aside for SMMEs. In addition, a further R2.4 billion (30%) of the provincial government’s infrastructure budget has been set aside for SMMEs.

The Premier has also indicated that policy still needs to be developed to address preferential procurement from local and youth entrepreneurs.

Surely the policies should be put in place before funds are allocated?

Will a list of identified SMME’s which have benefitted from these allocations be maintained and monitored, to prevent abuse? Is there a plan to ensure an equitable share across SMMEs?

Will ownership of these SMME’s be monitored, to ensure that government employees, for example, are not double dipping? Or that the procurement of services is not disproportionately skewed in favour of politically connected individuals?

What guidelines are in place to ensure that the SMMEs, where goods and services are procured from, are capable of meeting the necessary requirements?

The province can ill afford to be writing off millions in fruitless and wasteful expenditure because assets did not meet expected functionality.

As a member of the portfolio committee of the office of the premier, I have raised these issues in the committee, but did not get satisfactory responses. I have now written to Premier Mabuyane to raise these concerns.

The Democratic Alliance believes that growing the number and success rate of small businesses is the key to reducing unemployment and increasing our labour absorption rate. This starts with improving government and private sector advocacy of small business development.

At the same time, it is vital that the provincial government shows that it is serious about being transparent and accountable for public funds.