SMD

Annual Report 2023/2024

Matters raised by the Portfolio Committee Department’s response In the financial year 2022/23, the DSBD was unable to meet 44 percent of its APP targets. Vacancies in critical

The Department expedited filling of critical vacancies by means of: % Top management: Advertising the three (3) Deputy Directors-General posts. Two of these posts have since been filled and the third is in the process of being filled. % Senior Management: Thirteen (13) senior management positions were advertised, and the Department has since appointed four (4) senior managers. The remaining nine positions are still in the recruitment and selection process. % Middle Management: Twenty (20) middle management positions were advertised, and the Department has since appointed eleven (11) middle managers. The remaining nine (9) are still in the recruitment and selection process. % Levels 2–9: Forty-six (46) posts were advertised, and the Department has since appointed twenty one (21) employees. The remaining twenty five (25) are still in the recruitment and selection process.

The Department has developed mechanisms to monitor and ensure that the two outstanding MTSF targets are achieved. 1. Implement the SMME-focused localisation policy and ensure 100% compliance by the public sector in procuring 1000 designated local products and services from SMMEs by 31 March 2024. The Department is on track to achieve the set MTSF target. As of the third quarter of the 2023/24 financial year (31 December 2023), a total of 1042 products were produced and services rendered by SMMEs, and Co-operatives linked to the domestic market. 2. At least 50% of national and provincial DFI financing is dedicated to SMMEs and Co-operatives through the establishment of the SMMEs and Cooperatives Funding Policy by March 2021/22. % SMMEs and Co-operatives Funding Policy was delayed, due to the Department having to undertake further consultations before the Policy can be presented to Cabinet for approval.

% Despite the Funding Policy finalisation being behind schedule, some of the Policy proposals are already being implemented by some of the DFIs. For instance, most of the lending activities are informed by the SMMEs’ and Cooperatives’ affordability based on the available monthly cash flows as opposed to the provision of collateral; and to introduce a seamless application process, the DFIs have introduced a common application template to standardise the application requirements for SMMEs and Co-operatives. The SMMEs and Co-operatives Funding Policy is being processed through structures such as NEDLAC, Economic Cluster and ultimately Cabinet in order to effectively be implemented in the 2024/25 financial year.

The Department is finalising the SMME and Co-operatives Funding Policy, which is being processed through structures such as NEDLAC, Economic Cluster and ultimately Cabinet in order to effectively be implemented in the 2024/25 financial year.

job categories were identified as the primary cause of underperformance. To halt or reverse the trend, the

Department must expedite its recruitment efforts to fill vacant posts as practically as possible. The Committee will review quarterly reports to track how far this

indicator is achieved. Ideally, and given the approval of the organisational structure, the Committee would like to see the Department maintaining a vacancy rate of less than five percent.

The SMME and Co-operatives Funding Policy must be expedited and completed by 31 March 2023. Since the financial year 2020/21, this target has been included in the Department’s annual performance plans. As at

31 March 2022 the policy had only been approved by the Minister and Cabinet and later gazetted for public comments. It will be damaging to good governance if the Committee accepts or examines the annual

performance plan (2024/25) with this target still being incomplete.

As noted in the AG report, the portfolio has achieved 67 percent of its targets over the MTSF period, implying 33

percent non-achievement of MTSF targets. The Executive authority should monitor and ensure that the remaining targets are accomplished within the current MTSF period.

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Department of Small Business Development • GOVERNANCE • Part C