Trade and Industry Budget Vote Speech 2012/13 by Deputy Minister Elizabeth Thabethe, Old Assembly Chamber, Parliament, Cape Town
18 May 2012
Members of the National Assembly;
MEC’s and Heads of Departments;
Officials of the Department Trade and Industry (dti) and Council of Trade and
Industry Institutions (COTII);
Leaders of Organised Business and Labour;
Ladies and gentlemen.
The economic success and sustenance of many economies is anchored around increased participation of Small, Medium and Micro Enterprises (SMME) in the mainstream economy. SMMEs are principal driving forces of economic growth and development.
As the African National Congress (ANC)-led government we are resolute in increasing the uptake of SMMEs, as their dynamism and the ability to innovate will assist us in creating the much-needed jobs in our economy. They are critical in generating employment, and they also help diversify economic activity and make a significant contribution to exports and trade.
This budget vote takes place at a time when we are in our mid-term. This mid-term is characterised by both successes and systemic challenges that are a legacy of our past – in particular the apartheid space economy. This legacy continue to manifest itself as many SMMEs are not connected to the mainstream economy and this remains a challenge to government’s efforts of creating interconnectedness business activities and that will usher in the creation of value-chains across sectors.
The creation of value-chains across sectors is critical as it connects SMMEs and big corporations in the production of a plethora of goods and services. This is the revolution that we are leading as the Department of Trade and Industry (DTI). As we are conscious that SMME’s are a vehicle of ensuring economic inclusivity and increased participation by South Africans in the mainstream economy.
Ladies and gentlemen, the primary agenda of any country that is geared towards developmentalism such as South Africa, is the creation of a vibrant private sector, the development of entrepreneurship and creation of small and medium-sized enterprises. SMMEs stimulate private ownership and entrepreneurial skills, they are flexible and can adapt quickly to changing market demand and supply situations.
To improve entrepreneurial capacity, the dti has begun scaling-up small business incubation programmes through Small Enterprise Development Agency (SEDA) and private initiatives. As at the end of December 2011, incubators through the SEDA technology programme (stp) had created 189 new SMMEs and 931 jobs. In this regard, we are proud to announce our partnership with SmartXchange in Durban, KwaZulu-Natal. Within our midst we have a young entrepreneur Mr Zibuko Mchunu who company is incubated in SmartXchange.
Ladies and gentlemen, Mr Mchunu is a pioneering and successful young information and communications technology (ICT) entrepreneur and a role model for our youth to follow in his footstep.
Furthermore, to fast track timely payment for SMMEs a call centre has been established through SEDA to facilitate payment within 30 days for SMMEs contracting with government. As at 12 February 2012 the Public sector SMME Payment Assistance Hotline had answered in excess of 25,000 calls and facilitated payments in excess of R280 million to small enterprises.
Honourable Members, our partnership with agencies such as National Youth Development Agency (NYDA), seeks to ensure that we stimulate the entrepreunial spirit in our youth, in particular the Gauteng Chapter (with a visionary Chairperson such as Mr Simon Molefe) and the Eastern Cape Chapter (under the leadership of an activist Chairperson Mr Ayanda Matiti).
We have undertaken a number of Youth-Focused Taking DTI to the People with them, we also intend to strengthen our relations by bringing DTI programmes to our youth. Soon, we will be launching a substantial number of youth-owned co-operatives with NYDA Gauteng. These co-ops will be rolled out across Gauteng Province. Furthermore on Monday the 14 May 2012, NEF has entered into a partnership UK Trade and Investment for the benefit of our SMMEs.
In order to get our SMMEs ready for the export market, 333 have been trained in terms of the National Exporter Development Programme. This programme contains:
- The Passport Initiative underpinned by an extensive Capacity Building component and mentorship to enhance the capacity of exporters and increase the supply of products to targeted markets
On the other front, there is a review and finalisation of the National Export Strategy as well as the Investment Strategy. Furthermore, the review and enhancement of the EMIA Group Offering Scheme (to cater for emerging exporters and potential investors) is underway.
In our attempt to expose our SMMEs to international markets, we have been part of a number of International Trade Fairs including the:
- India International Trade Fair (where we won a Gold Award for the Overall Foreign Stall
- Cameroon Handicrafts Exhibition (where one of our exhibitors Mr Robert Tshimungwa won Gold Award for Best Foreign Exhibitor)
- Zimbabwe International Trade Fair (ZITF) (where we won the Gold Award for Best Overall Foreign Stall).
It must be noted that participation in these international fairs create business opportunities for South African businesses. Out of the ZITF, Unica Plastic Moulders (South African Company) has secured a deal to supply their products to 133 shops in Zimbabwe.
Honourable Members, to buttress our intent of making strategic intervention in women economic empowerment, as the DTI we have been utilising vehicles such as SAWEN, Isivande Womens Fund, Bavumile and Technology Women in Business (TWIB). Over and above these, we are currently busy with the Strategy on Women Economic Empowerment.
The need to recognise these women technology pioneers, whilst nurturing the young ones through the Techno Girls programme is borne out of the need to build innovative production and business methods. This will help the Nation in ensuring that ultimately we build viable value added industries. Without us adding value to our locally produced goods, we will not be able to create the required jobs, let alone transforming our economic structure away from its extractive nature. In our midst, we have Techno Girls from Sefoloko High School, from Ramokgopa Village in Limpopo.
Honourable Members, it should be noted that work on the review of existing SMME Programmes, Policies and Institutions initiated as a result of the Presidential directive has been completed and the final report will be presented to the Economic Sectors and Employment Cluster soon.
In showing our resoluteness, the dti has beefed up its capacity to focus specifically on the informal, townships and peri-urban enterprises. These enterprises comprise of co-operatives, survivalist and micro enterprises. Work on developing the informal sector strategy that will lead to the development of programmes to support the informal sector including the micro finance programme has commenced. This strategy also seeks to improve the survival rate of enterprises and the graduation rate from informal to formal sector.
Ladies and gentlemen, in our endeavour to promote the development and growth of co-operatives - we undertook to review the Co-operative Act, No. 14 of 2005 in order to enhance capacity and to streamline the delivery mechanisms for co-operatives; reduce the regulatory burden on co-operatives; and to enhance compliance, coordination, administration and sustainability of co-operatives.
Additionally, to increase and grow the pool of cooperatives, 220 small scale cooperatives were established; 175 trained; and 115 provided with market access covering both local and international markets during 2011/12 financial year. South Africa’s significance in the co-operative movement will be highlighted through the hosting of the International Cooperatives Body in June 2012 in Cape Town.
In order to increase market access for cooperatives, through in BRICS mechanism, South Africa and China has agreed to enter into business contracts – as “cooperatives to cooperatives” on the following three commodities: maize, wine and aquaculture.
Furthermore, the department will begin implementing some of the recommendations emanating from the SMME review process with a view to enhance support for SMMEs and place them on a sustainable growth path.
Ladies and gentlemen, the red tape reduction programme will be expanded during the MTEF period and provincial economic development departments will also be encouraged to take up the programme in order to spread to rural areas. The targeted procurement from SMMEs by government will be finalised, this will be coupled with the finalisation of the integrated information system for procurement to increase access to information, streamline procurement processes and enable monitoring and evaluation of performance with regard to the targeted products.
In order to improve networking opportunities for South Africa SMMEs, enhance market opportunities as well as exchange information the International Small Business Congress, will be hosted in South Africa from the 15 to 18 September 2012 in Sandton, with delegates from the continent and other parts of the world expected to attend.
Our development as a country remains locked in the decentralised economic activity with serious spatial challenges which have disarticulated the logic of shared economic activity and benefits. That is why we need to make technology investment now and what a better way to do that than to recognise women who are already at the forefront of innovative technology leadership.
The Small Business Sector and the Cooperatives movement have a responsibility to help us transform the social and economic engineering of apartheid. Through our currently programmes; the different incentives directed at supporting the small business sector; and the integrated nature of how we execute government business, we are surely on the right track.
I thank you.
Issued by: Department of Trade and Industry
18 May 2012
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