SMD

1. AUDITOR-GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The Auditor-General of South Africa (AGSA) currently performs certain audit procedures on the performance information to provide limited assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor’s report.

Refer to page 145 of the Report of the Auditor-General, published as Part F: Financial Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE The Department performance against its revised and re-tabled 2023/24 APP output indicators and targets, is detailed in the tables below. The 2023/24 financial year represented the last year of implementing the revised 2019-24 MTSF and fourth year of implementing the revised Departmental 2020-25 Strategic Plan. The 2023/24 Annual Report outlines the performance of the Department against the revised and re-tabled 2023/24 APP, aligned with the overall strategic direction of the Department.

Standards for Annual Targets Category: Progress Description Activity not initiated/ concluded on time or progress was slower than planned.

Percentage

Annual Report Status

0-99%

Not achieved

Annual target delivered on time

100%

Achieved

Targets were considered to be achieved if 100% of their elements were timeously attained or exceeded and targets in the 0-99% range were considered not to have been achieved. The DSBD achieved 23 (85%) of its set targets, and 4 (15%) of the targets were not achieved.

2.1. Service Delivery Environment The SMMEs and Co-operatives continue to play a major role as a driver of growth and employment in both developed and developing economies. According to the World Bank, SMMEs represent about 90% of businesses and more than 50% of employment worldwide. Formal SMMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal businesses are included. In emerging markets, most formal jobs are generated by SMMEs, which create approximately 7 out of 10 jobs. However, access to finance is a key constraint to SMME growth and is the second most cited obstacle facing SMMEs to grow their businesses in emerging markets and developing countries 8 . Access to finance is one of the key obstacles that the South African democratic government identified and put measures in place to address. These measures include the establishment of a Department that focuses solely on the development of small businesses in 2014. The Department is mandated to support SMMEs, Co-operatives as well as the informal sector, which have been identified as key drivers of job creation and poverty alleviation directed towards the historically disadvantaged groups. The National Development Plan, Vision 2030, is aimed at harnessing the potential of SMMEs, Co-operatives and the informal sector, and sets specific goals for the small business sector as follows: • To enhance economic growth through SMMEs and Co-operatives as assessed through an increased contribution by the sector to GDP. • To enhance economic growth through SMMEs as assessed through an increased contribution by the sector to GDP.

3 https://www.worldbank.org/en/topic/smefinance

Part B • PERFORMANCE INFORMATION • Department of Small Business Development

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