Steenhuisen: Take charge, Mr President - ministers are giving mixed signals on small business relief

DA interim leader John Steenhuisen has called into question government's emergency measures to provide financial relief to small, medium and micro enterprises (SMMEs).

In a letter to President Cyril Ramaphosa, Steenhuisen said he welcomed the relief by government, but stressed that South Africans had yet to learn the details of the regulations of this relief package.

He called out ministers in the national command council - which is spearheading the fight against Covid-19 - for giving mixed messages on whether race will be a factor in the eligibility of businesses seeking relief.

Distress

“This has caused much distress among both employers and employees," he said.

According to Steenhuisen, a document by the Department of Small Business Development was leaked two days ago, stipulating a 51% black ownership was a requirement.

Steenhuisen also questioned how Minister of Trade and Industry Ebrahim Patel, Small Business Minister Khumbudzo Ntshavheni and Tourism Minister Nkhensani Kubayi-Ngubane each made contradictory statements on the subject. 

Ntshavheni said it was fake news. 

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At a media briefing, Kubayi-Ngubane said assistance for tourism operators will be done according to the BEE sectoral codes and will be biased towards black-owned businesses.

“This is clearly a contradiction of the position given to the media following the leaked document.

"The impact of Covid-19 and the resulting emergency measures will be felt by all South Africans. The virus does not discriminate. The businesses threatened during this time will include many small and micro enterprises that are exempted from BEE, based on their annual turnover.

Relief

"Relief funding that uses BEE qualifying criteria or ownership will miss over 93% of companies with a turnover of less than R10 million per year or that are not 51% black-owned. Collectively, these businesses employ thousands of South Africans, most of whom are black.” 

Steenhuisen wrote that owners of all races would be deeply affected by the decisions made around support for small businesses. He added it was critical that they knew the state would assist them. 

Ramaphosa instituted a nationwide lockdown to deal with the spread of coronavirus, which would come into effect at midnight on Thursday. Only essential services would be operational during the lockdown.

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“President Ramaphosa, you have a duty to set the record straight without delay," Steenhuisen wrote.

"You are the president, you made these decisions, and you have our support in these difficult times. But it is up to you to clarify precisely what these business funding regulations entail before our country goes into lockdown. Many small businesses are on the brink of suffering potentially irreparable damage and thousands of South Africans stand to lose their jobs. They have the right to know.

“At the heart of this issue is an unguided communications strategy, and the mixed messages that result from this can only lead to panic, fear and anger. You have to take charge of communications, Mr President, so that there is one voice giving instructions."