Department of Small Business fails to allocate COVID-19 relief funds

The Department of Small Business Development, under Minister Khumbudzo Ntshavheni fails to allocate 92% of the funds that are meant to be Covid-19 relief funds.

Only 8% of the R1.4 billion SMME Covid Relief Fund has been authorized by the department. This is reported in the auditor general’s second special report on the financial management of government’s Covid-19 initiatives.

The Covid-19 pandemic has had negative financial impact on small businesses as some are forced to close due to the lockdown restrictions and some are barely surviving due to the loss of customers.

President Cyril Ramaphosa announced a R500 billion Covid-19 relief fund that was meant to help people and companies to deal with the rampant negative effects of Covi- 19. The report also indicates that little effort was made to attract small businesses to apply for this relief, the application procedure and the selection criteria was not fully explained to the public.

This is why the department only received 9122 applications by 30 September 2020 but only 5011 applications were approved.

The Auditor-General Tsakani Maluleke said, “In the first special report we reported weaknesses relating to the approval process. The director-general of the department committed to strengthening the approval process by implementing an online approval process and updating the operating procedures.”

DA spokesperson on small business Jan de Villiers said, “Minister Ntshavheni has a responsibility to account to parliament for the reasons as to why the Department of Small Business Development has been sluggish in allocating the relief funds that are so desperately needed by struggling SNNEs across the country.”

By Thomas Chiothamisi