Organisations say they have been excluded from Covid-19 emergency funds due to red tape
SMALL, medium and micro enterprises (SMMEs) have accused the government of excluding them from the Covid-19-related business rescue funds in favour of politically-connected entrepreneurs.
Describing the 21-day national lockdown as a “massacre” for their businesses, three of the country’s leading SMMEs associations said their members were battling to access the SMME Fund announced by President Cyril Ramaphosa two weeks ago due to bureaucratic red tape, nepotism and bad credit records caused by the government’s failure to pay them on time.
The SMME Forum, SMME Council and the National African Federated Chamber of Commerce (Nafcoc) said that the government did not consult them before imposing a lockdown.
This came as the socio-economic impact of the lockdown became clearer this week.
The national Covid-19 cases surged to 1 505 on Friday, with nine confirmed deaths and 95 recoveries.
According to the SMME Council chairperson, Musawenkosi Zulu, more than 1.5 million of their members won’t recover from the lockdown because they lived hand to mouth.
He added that the intervention announced by Small Business Development Minister Khumbuzo Ntshavheni would not help out.
“After this lockdown, I’m sure, of the 3.8 million SMMEs we have, we will only be left with 1.5 million. To us, this lockdown was a massacre” Zulu said.
“People are talking about spaza shops that will be supported, but when you go to Soshanguve, Block AA to be specific, you only have one South African-owned spaza shop. In Tembisa, Difateng, there is no South African-owned spaza shop. You go to Protea Glen in Soweto, there is only one South African-owned spaza shop. All these spaza shops that will be supported are foreign-owned. Even the interventions by the department are not assisting most of our people.”
Tebogo Khaas, president of SMME Forum, said the organisation’s 1 500 members had yet to access the R150 million SMME Fund set aside because the system was “chaotic”.
“Last week, for example, it was chaos. You do know that the system they use, people couldn’t finalise their applications. Even as we speak now, there hasn’t been a single SMME that I am aware of who has applied and has been provided with any relief. Some have come back to say they haven’t even received a reference number or acknowledgement of receipt of application,” Khaas said.
He also accused the government of “shunning” SMMEs, adding that Ntshavheni was “kicking the ball down the road” by blaming Telkom for her department’s failure to bail out small businesses.
“I have also been in touch with other associations. We are all unanimous that the government is shunning SMME associations and only inviting politically-connected individuals because of their political connectivity,” Khaas added.
Ntshavheni refuted the allegations, saying the government could not have consulted SMMEs because the country never planned for the disaster.
“In addition, the government does not have to consult to do its work. The department meets with various business formations – we have no permission from them to list them,” Ntshaveni said.
“The applications only opened on April 2, 2020 and the forms can be accessed through https://smmesa.gov.za/, www.sefa.org.za, www.mybindu.org.zaand, www.dsbd.gov.za (offline due to SITA challenges). This information was shared with the public through our social media, media interviews, and media releases. The department has never blamed Telkom and whenever there have been system challenges, we continue to work with Telkom to resolve them.”
Nafcoc president Gilbert Mosena said that while his organisation supported the lockdown, it was unhappy with the government for imposing decisions on its five million members without consultation.
“The most unfortunate part is that the government wants to be a regulator, a distributor, an implementer in doing everything in exclusion of the major community-based organisations including Nafcoc. We were never consulted,” Mosena said.
He bemoaned the R1 billion each pledges made by billionaires Johann Rupert, Patrice Motsepe and the Oppenheimer family to ‘assist’ SMMEs. Mosena said Nsfcoc members won’t benefit from those SMME loans or pledges.
“Most of this money that has been put together is going to end up in the companies owned by whites. We can check the statistics and we will find that there is no one from our communities who met the requirements for the loans. You must have financials and many other things which some of our members don’t have,” Mosena said.
After it emerged that the pledges were in actual fact loans, Mary Oppenheimer and daughters released a statement this week saying they would be donating R1 billion to the Solidarity Fund.
“My daughters and I have thought long and hard about where we could make the greatest difference in this fight and have decided it is to support the humanitarian needs of everyone living in South Africa. So, we think that it is the Solidarity Fund which is most aligned to our concerns about basic needs, food, medicine, general care and gender abuse,” read part of the statement.
The family also heaped praise on brother Nicky “and his family’s patriotism in launching a separate initiative, The South African Future Trust (SAFT), last week.”
Some of the SMMEs defied the lockdown regulations and picketed outside the Joburg Property Company (JPC) offices in Braamfontein on Wednesday demanding immediate payments.
They accused the JPC of failing to pay them for six months, adding that chief financial officer stopped their payments.
“We have had to retrench staff due to government’s non-payment and we owe suppliers and employees for months without any payment from the government, yet the ANC government goes around preaching Small Business, yet they are our biggest enemy that’s forcing us out of business,” said one of the contractors.
Patrick Phophi, acting head of department for housing in the City of Joburg, said most of the suppliers had been paid. The delays in paying others were caused by late or incorrect submission of invoices.
For two weeks, the Banking Association of South Africa (BASA), could not say whether or not members would give their clients Covid-19 related payment breaks similar to the ones given by their counterparts in countries such as Italy.
Naledi Sekoati of Ogilvy PR company, speaking on behalf of BASA, said bank executives were busy in a meeting and would be in a position to provide more details to their clients during the course of this week.