Hon Chairperson, it is really a pleasure to see you here, in the Chair. We have come a long way to be where we are today.
Minister Davies and other Ministers; Deputy Minister Thabethe, Deputy Minister Masina and other Deputy Ministers; Director-General Lionel October - these are the people we have been working with - Acting Director-General, Pumla Ncapayi, who is my Acting DG; hon members; chairmen and chief executive officers of state-owned enterprises; distinguished guests; captains of industry; ladies and gentlemen, comrades and friends, we have just returned from a flurry of activities, responding to the call by our government to honour the birthday of the late Comrade Nelson Mandela. Thousands responded positively. I for one joined the Premier of the Free State, Comrade Ace Magashule, in cleaning and painting Pelonomi Hospital. We take the opportunity to thank all who positively responded to this noble call. This show of solidarity and responsibility should extend beyond just honouring Comrade Nelson Mandela.
There are critical areas in the life of South Africa that need unity of purpose, one of which would be support for the call by the ANC for radical economic transformation. It is important to note that the ANC is not anti- business. However, it has a responsibility to respond radically to the needs of the people, including strong protection measures against exploitation and unjust measures. The ANC stands for an economy that is inclusive, equitable and fast-growing.
Those still debating the concept of radical economic transformation should realise it is do or die for the majority of the black people of South Africa. [Applause.] Government cannot forever be a buffer between the rich and poor, neither can it be a scapegoat for those who prefer to meander, or sit on the fence. It cannot be a scapegoat for those who do not contribute meaningfully to the socioeconomic challenges facing our country. This country belongs to all of us, including you in the opposition. [Interjections.] Together, we will move South Africa forward.
The world is conscious of the deep wounds inflicted upon our people by the defeated apartheid regime. It is also aware of our efforts to heal, but the focus on us is no longer the same as it was for 20 years. The world that supported us is going through its own challenges, with some now looking at us as competitors. We therefore need to step up and take responsibility for our destiny.
We must focus on ourselves and our needs, while realising our commitment to African development and the better world we envisage. Of course, we are saddened by some of the things that are happening globally. Our ultimate goal is to build a South Africa with decent employment, entrepreneurial opportunities, a vibrant economy and a high quality of life, which everybody would like to see. Our goal is to build a South African economy geared towards addressing the triple challenge of unemployment, poverty and inequality.
It is an honour for me to present my maiden Budget Vote, jointly with the Department of Trade and Industry, DTI, the department that has been the custodian of small, medium and micro enterprises, SMMEs, and co-operatives. I am ably supported by my Deputy Minister, Elizabeth Thabethe, in this regard.
In the past years much has been done by the Departments of Trade and Industry and of Economic Development to address SMMEs and co-operatives. However, due to the ANC's recognition of the importance of this sector, as well as listening to the calls by SMMEs and co-operatives for a stand-alone department, the ANC-led government decided to create a department, with its own budget and structures, to give undivided attention to advance the interests of SMMEs and co-operatives. Something new is here and it is going to work.
It is important for us to note the programmes considered by the DTI during the previous financial year, and we are raising them because those programmes still have to continue. Through the Incubation Support Programme, the DTI has to date approved support for 39 incubations amounting to R590 million, focusing on the agriculture, services and manufacturing sector. In addition, the Small Enterprise Development Agency Technology Programme has created 291 new small and medium enterprise entrants, supported 1 227 existing SMMEs and created 1 258 employment opportunities. We know that this is not enough when we look at the challenges in South Africa.
Centres for Entrepreneurship, such as King Hintsa Further Education and Training College in the Eastern Cape, that focuses on agro-processing, as well as Ekurhuleni West College in Gauteng, that focuses on welding and waste management, have been established. In the current financial year, we envisage the establishment of two additional institutions to upscale our efforts with regard to entrepreneurship.
Twenty-eight projects were approved through the Support Programme for Industrial Innovation, amounting to R76 million, with beneficiaries from Gauteng, the Western Cape and KwaZulu-Natal. Areas of focus include the green economy, information and communications technology, energy and manufacturing.
Through the DTI, the review and amendment of the Co-operatives Act and the National Co-operatives Strategy have been completed. This will allow for the establishment of new institutional arrangements such as the Co- operative Development Agency and the Co-operatives Tribunal.
In addition, 243 projects amounting to R62 million were funded through the Co-operative Incentive Scheme during the previous financial year, with 1 897 beneficiaries, of whom 990 were female, 253 were youth, 25 were people with disabilities and 629 were male.
The new department will continue to collaborate with provincial entities to advance Cabinet's decision of 2007, which calls for 85% procurement of 10 specified products and services set aside. Within this context, I would like to commend KwaZulu-Natal, the Eastern Cape and, most recently, the Free State, on their efforts to advance the initiatives and co-operatives movement in South Africa. [Applause.]
Furthermore, the DTI has approved the establishment of secondary marketing co-operatives as well as an incentive amounting to R10 million per co- operative, focusing on advanced value addition in respect of goods and services, use of technology as well as improved logistics and infrastructure.
In addressing measures for a conducive environment, the DTI recently launched the National Informal Business Upliftment Strategy, which will enhance enterprise development support and co-ordinate intergovernmental and stakeholder relations for broader participation of South Africa's informal sector in the economy. In addition to this, the implementation of the integrated small-medium-micro enterprises and co-operative development will allow for harmonisation and co-location opportunities in the informal sector.
The red tape reduction measures - and I think this is of interest to many - for municipalities were launched and rolled out in all nine provinces. We will watch this with a hawk's eyes. This will allow for a reduction in red tape in local government's small business environment and will serve as a monitoring mechanism.
During the course of the previous financial year, the DTI approved the Youth Enterprise Development Strategy, YEDS, aimed at increasing the contribution of youth-owned enterprises to South Africa's gross domestic product, GDP. The YEDS envisages direct support to young entrepreneurs with the objective of creating and managing sustainable and efficient business capable of providing decent, permanents jobs.
In this regard, my department will take the lead in the implementation of these programmes, in collaboration with other departments, and this will serve as a direct response to South Africa's National Youth Policy.
It became imperative to set up a focused centre to help to create a favourable legal and regulatory environment, including support for infrastructure and mechanisms to assist SMMEs and co-operatives to grow sustainably. This centre will scale up support and expand the number and viability of the sector to achieve development vision.
The Department of Small Business Development aims to provide extensive support to small business and co-operatives, and increase support through consolidated public agencies, enterprises coaching, mentorship, incubation and intensive support mechanisms.
We will build on the commitment in the social accords to bring black-owned small businesses and co-operatives into the supply chain of large companies and the public sector. We will also mobilise the private sector and state- owned enterprises to support SMMEs and co-operatives.
The National Development Plan, NDP, envisages a trebled economy by 2030 with a target of 11 million job opportunities. SMMEs and co-operatives can make a meaningful contribution to this objective. We believe SMMEs and co- operatives are a critical means to empower our people, a mechanism to draw new entrants into the economy, strengthen inclusive growth, build the economy, encourage solidarity and create large numbers of jobs.
We envisage a close collaboration, as already mentioned, with Ministers Davies and Patel and their deputies, and we draw on their experience. This will allow for a successful and complete migration of functions, programmes and projects that have been in their purview. A co-ordinated effort is important, as we believe the work around SMMEs and co-operatives cuts across all government departments. We will be knocking on each and every door of all the departments.
We present the budget midyear and also at a time when we are engaged in the process of configuring the department as well as fulfilling the government's plans to implement the changes that will affect the macro- organisation of the state. This is an organised government.
We are conscious of the need to establish the department at high speed. [Interjections.] SMMEs and co-operatives cannot afford vacuums of any sort. Within this context, we have been mindful of the end user and have considered business continuity as a principle from which recipients will continue to benefit whilst we configure our department.
We cannot afford to disappoint organisations such as the Black Business Council, National African Federated Chamber of Commerce, Nafcoc, the Co- operatives Movement in South Africa and many others, or even individuals, including Mr Sandile Zungu and, of course, our hon chairperson, Ruth Bhengu, whose passion for co-operatives runs deep. [Applause.]
Facts and figures indicate that SMMEs contribute 57% of South Africa's GDP and account for 56% employment, 76% in the informal sector. In an attempt to benchmark South Africa's performance, there are three countries of interest to us, namely Brazil - not because I was ambassador there - Chile and India, whose SMMEs and co-operatives have contributed approximately 20% to their countries' GDP and employ 60 million people. This highlights the significant contribution by SMMES and co-operatives towards economic growth.
The department, guided by this understanding, will have to ensure a concerted effort focusing on enhancing areas such as policy, regulatory environment, advancing localisation as well as leveraging on public procurement, financial and nonfinancial support.