Red tape to ease up?

Small Business Development Minister Lindiwe Zulu holds up a copy of the 12th edition of Small Business Connect with the newspaper’s managing director, Gcobani Ndabeni. Read more about what the minister has been doing since her appointment on page one and three.

The Minister of Small Business Development Lindiwe Zulu says her department plans to speak to business owners to determine which sections of current legislation are strangling small businesses.

Since its formation five months ago Zulu’s ministry has been at work looking at amending or doing away with legislation affecting small business owners.

This forms part of the ministry’s mandate to create an enabling environment that supports the development of small businesses and co-operatives.

Last month Zulu met with the portfolio committee on small business development to discuss the effectiveness of current legislation that governs small businesses and co-operatives.

Speaking to Small Business Connect, she said the legislation discussed at this meeting included the Small Business Development Act, National Small Business Amendment Act and the Co-operatives Act.

“We still have to comb through these acts and look at their relevance. We will speak to business owners to determine which sections provide challenges to their businesses,” says Zulu.

However, she cautions business owners that investigation is needed and “legislation is not something that can be changed overnight”.

She adds that a more suitable definition for small businesses, over the current one contained in the National Small Business Amendment Act, is among the issues being considered by her ministry.

Zulu’s focus is also on those institutions and developmental agencies tasked with implementing regulations and providing business support such as the National Small Business Advisory Council (NSBAC), the Small Enterprise Development Agency (Seda) and the Small Enterprise Finance Agency (Sefa).

The latter two presently fall under the Department of Trade and Industry and the Department of Economic Development, respectively.

However, these agencies will in future form part of the Department of Small Business Development (DSBD) which is still in the process of being set up.

The DSBD was proclaimed by Parliament on 7 July.

Although Zulu could not provide an exact date by when the respective agencies would have migrated to the new department, she pointed out that all the necessary appointments in her department – bar one (the appointment of a second advisor to the minister) – have been made.

“The department is still being set up, but we are on track” (Read more about this on page 3).

Other functions that are being migrated to the new department include the co-operatives strategy, gender and women support programmes, incubation support programmes, support for township businesses, enterprise development programmes, centres for entrepreneurship and financial incentives within the Department of Trade and Industry aimed at assisting small businesses and co-operatives.

The new ministry plans to look at the relevance and effectiveness of institutions and business development agencies such as the NSBAC, the Companies and Intellectual Property Commission (CIPC) and the Compensation Commission that are tasked with implementing regulatory frameworks that business support.

Business associations commenting on behalf of its members agree with Zulu that time is needed to understand the challenges facing the sector.

They all expressed confidence in Zulu. However, the South African Chamber of Commerce and Industry (Sacci) sent Small Business Connect a document detailing the expectations of the more than 50 chambers of commerce and industry from around the country.

In this document, which they presented to the new ministry, Sacci says clear timelines should be put in place to avoid testing the patience of business owners.

Sacci chief executive Neren Rau says it is good news to hear that the minister is looking at some of the concerns detailed in the document that the chamber body sent on to her office.

He stressed the importance of the minister addressing labour-related issues sooner rather later. Zulu has previously said that she does not plan to reverse any of the gains that have been made by the unions, but, would engage with the Department of Labour and the unions.

In a written reply to a question raised in Parliament, the minister confirmed that a review of all labour market issues that affect small business development was being done.

Furthermore, she said that she would engage with all departments on matters that affect small businesses and co-operatives. Matsi Modise, national executive director of the SA Black Entrepreneurs Forum, says business owners need to be patient with the new minister.

She adds that there is only so much that the minister will be able to do in the short space of her current term in office.

“We want to believe that when she is ready and once she has done her assessment we will see an improvement in the disconnect between the developmental agencies and entrepreneurs,” says Modise.

  • Visit for more information regarding the DSBD or call 0861 843 384.

Department of Small Business Development (DSBD), gcobani ndabeni, , Matsi Modise, Neren Rau, , NSBAC, SA Black Entrepreneurs Forum, , the DSBD

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