SMD

Annual Report 2023/2024

Matters raised by the Portfolio Committee Department’s response

% The Department set the annual target for linking a total of 250 SMMEs and Co-operatives to the international market. In this regard, the target was not achieved. The Department managed to only link 68 SMMEs and Co-operatives to global market opportunities, just like the above targets, more than 250 interventions were linked to the SMMEs and Co-operatives. % The Department also set itself the annual target of supporting 2,500 women-owned businesses to register on the international platform. A total of 1 202 women-owned businesses were supported to register on the international platform by 31 March 2023. While the number of supported women-owned businesses may seem low, the small business-women owners were provided with support through various interventions, and therefore the number would be higher if only one intervention was provided. This practice goes against our model as we encourage them to follow a client journey since the SMMEs and Co-operatives that are supported more than once are the ones who tend to show high turnover and job growth. And going forward the Department will ensure that its set targets are aligned with the SBD Portfolio Business Model. 2. Second Matter: the 56% achievement is made up of only targets that have been 100% achieved, excluding those that may be partially achieved, which could have increased the overall percentage for the financial year under review. But as the Department, in order to push ourselves to deliver the best that we can to the SMMEs and Co-operatives, we took a conscious decision to do away with this practice and focus on targets that have been fully achieved when reporting our performance. During the current financial year, the Department has activated different structures (including the war room task team) to monitor strategies to ensure that the performance at the end of the financial year is improved from the previous financial year’s one. Improvement in performance is already seen in the results of 2023/24 Quarter Three (Q3), where the Department achieved 73% of its Q3 milestones.

The expenditure contrast to the number of performance targets met was due to the following two matters: 1. First Matter: One of the purposes of the Department is to oversee the promotion of an ecosystem that enhances entrepreneurship and innovation during the establishment, growth and sustainability of SMMEs and Co-operatives business life cycle. In doing so, the following targets were not achieved because the number of supports provided to the SMMEs, and Co operatives was low compared to the number of interventions provided to SMMEs and Co-operatives: % A total of 18 759 township and rural enterprises were supported but these enterprises were supported with different interventions and these interventions amounted to 22 957 for the 2022/23 financial year.

% A total of 8 988 start-up youth businesses financially and/or non-financially against the 10 000 annual target. However, if the Department were to count the number of interventions provided to support the 8 988 start-up youth businesses, a total of 12 279 would have been recorded. % The Department further supported 659 crafters through the Craft Customised Sector Programme at a budgeted amount of R35.5 million against the set annual target of 900. Similar to the youth start-up businesses, the number of interventions provided as support to the 659 crafters amounted to a total of 1001 for the period.

Nonetheless, the expenditure is in contrast to the number of performance targets met, 14 out of 25,

which saw the Department’s performance fall from 60 percent in the fiscal year 2021/22 to 56 percent during

the period under consideration. In the last BRRR cycle, the Committee observed a similar pattern wherein the

overall performance on achieved targets had dropped from 85 percent in 2020/21 to 60 percent in 2021/22. It had then concluded that the trend warrants closer examination and corrective measure.

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Department of Small Business Development • GOVERNANCE • Part C