DAYS after the cabinet approved the appointment of eight members to the second National Small Business Advisory Council, a question mark still hangs over the performance of the first council, which small business commentators say failed to boost the small business sector.
The appointment of the eight, who will serve for a three-year period, was approved by cabinet last week. They include Precious Lugayeni who serves as a director on the Small Enterprise Development Agency (Seda) board, Professor Mthuli Ncube the executive director of the Wits Business School and Professor Gesler Nkondo who served on the first council.
The council, set up four years ago, is tasked with advising the Minister of Trade and Industry Rob Davies on small business issues. The first council’s term expired in July last year.
Yet despite the minister’s assertion that the council had made a number of recommendations, business associations and commentators contend that the council lacks the necessary teeth to make a difference in the sector.
Joanmariae Fubbs, the chairperson of the trade and industry parliamentary portfolio committee, in September questioned whether after spending over R7 million in three years the council had made an impact.
This, while business chambers and bodies say the council has been largely absent from the scene.
The council has never released a single report or any of the minutes of its meetings. This is in marked contrast to India’s National Board for Micro, Small and Medium Enterprises and Brazil’s Permanent Forum for Micro Enterprises and Small Businesses in Brazil, which both readily release minutes.
While Sam Moleshiwa, the president of the National Black Contractors and Allied Trades Forum, said there was no process in place by which organisations such as his could communicate with the council, Lesley Afrika, chief executive of Wecbof, which represents about 500 business owners, said he knew nothing about the council.
A report submitted to the trade and industry portfolio committee in September by the council contained only four recommendations to the departments – none of which were tangible solutions to helping to vamp up the government’s small business support policies and programmes.
But in a parliamentary response in September to a question raised by the DA on the council’s effectiveness, Davies said he had received a number of recommendations from the council.
These ranged from appropriate enterprise funding models, the nature and extent of accessibility of government support services, openness of the domestic markets and aspects relating to the dissemination of information for small enterprises. Some of the council’s advice would take some time to implement, he said.
Thami Mazwai, the former convenor of the National Small Business Advisory Council, who opted not to run for a second term, has defended the council saying that many held mistaken expectations of what it was expected to do.
The mandate of the council was to advise the Minister, he said, adding that it was the minister’s “prerogative” to release the advice to the public.
He said while business associations conducted hard talk and held the government to account, the council’s mandate was to “distil what the Nafcocs and Busas were saying and advise the minister”.
Mazwai said a lot of the first council’s term was spent developing systems and testing the water in a variety of ways. The first council had also held various stakeholder consultation workshops with small businesses in various provinces, he said.
But one member of the council Business Day spoke to and who asked not to be named, admitted that the council “didn’t have the capacity” to carry out research and added that it was difficult to determine policy “without numbers”.
He said one need which the council had identified from Canada’s experience, was to establish a database of small businesses, which could help inform researchers and others facts on such things as: how many businesses were starting and closing and what sectors businesses were operating in.
Septi Bukula a small business analyst of Upstarts Business Strategies, believed the council was constrained by its composition.
He said while the members of the last council, which was chaired by the Minister of Trade and Industry Rob Davies, were drawn from the private sector, Malaysia’s National SME Development Council is headed by Prime Minister Najib Razak and consists of various ministers and heads of public agencies that oversee small business development in the country.
India’s National Board for Micro, Small and Medium Enterprise is similarly composed of ministers and agency heads.
Bukula pointed out that the wrong composition prevented policy decisions from being carried out.
He said the fact that the South African council wasn’t headed by the country’s head of state or that it contained the necessary roleplayers, was an indication how small business wasn’t being taken seriously enough by the government.
The National Advisory Council on Innovation, set up to advise the Minister of Science and Technology on innovation, makes many of reports available on its website.
Steve Lennon, the council’s chairperson commented that a key lessons the council had learned from its early years had been the need to remain transparent. He said making as much information as possible open to the public could only help to stimulate and drive further debate.
Jerry Vilakazi, the chief executive of Business Unity South Africa (Busa), was not available for comment at the time of going to print.
This article appeared in Business Day on 16 February 2010.
Stephen Timm is a