Minister finally acts on small business council

Khumbudzo Ntshavheni, who was appointed as the minister of small business development in May, is appointing the long-awaited national small business council so that it can be fully functional by November 1.

This is something her predecessor, Lindiwe Zulu, did not get around to during her five years in office.

With this step, Ntshavheni has made short shrift of a complaint that Carl Lotter, the managing director of the SA Federation for Small and Medium Enterprises, lodged against Zulu with the Public Protector for dereliction of duty.

Lotter last week asked for the file to be closed.

City Press’ sister publication, Rapport, previously reported that the appointment of the council, which will act as an independent advisory council, is one of the most basic requirements in the National Small Business Act.

The council must advise the minister on factors that threaten the viability of small business, national standards and regulations for the sector, as well as strategies to tackle the failure of market mechanisms.

Zulu had previously taken the position that the council was unnecessary because, among other things, she had her own special advisers.

Lotter said the council was an important link between the department, civil society, academia and the small business sector.

It’s also important that the small business sector’s engagement with big businesses and municipalities improves, and that the advisory council advances this, said Lotter.

John Dludlu, the head of strategy and public affairs at the Small Business Institute, also welcomed the news. However, he said it was important that the counsel was not made up entirely of “yes men”.

Dludlu also called on the minister to exercise the powers conferred on her by the act to publish guidelines for state institutions to help advance small businesses, and to consult with them about the possible impact of legislation on the sector.

However, Johannes Wessels, the director of the Enterprise Observatory of SA, said that a friendly business environment was more important to businesses than the council.

He said this would ideally entail effective crime prevention, access to municipalities through staff who answer phones and emails, rapid issuing of tax clearance certificates for the transfer of property and a more flexible regulatory framework, as well as the protection of intellectual and other property.

Wessels said that if the council wanted to make a contribution to economic growth, it could campaign for statistical research to form the basis for policy formulation.

There are many myths regarding small businesses, such as that they create the most work, but there is no data to back up these claims.

The council will consist of at least seven members, but not more than 15 members. The minister will personally appoint only three.

The members of the council must have appropriate experience and will serve for a term of three years, which may be renewed for a further three years.

The department did not answer Rapport’s questions, including those regarding the process that would be followed to appoint the remaining members, by the time of going to print.

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