DSBD programmes and assistance targeting cooperatives development; Participation of MSMEs in G20 Summit undertakings; with Minister and Deputy Minister

Meeting report

The Chairperson said Ms Stella Ndabeni-Abrahams, Minister of Small Business Development (DSBD), could not be at the meeting as she was on a working visit to China with the Deputy President, so Ms Sindisiwe Chikunga, Minister in the Presidency for Women, Children and Disabilities, had been appointed as the Acting Minister for Small Business Development. She was in the meeting, but had requested that she be permitted to leave earlier to attend a Cabinet committee meeting. The Deputy Minister would remain in the meeting, along with the departmental officials, to respond to any questions Members might have.

The Chairperson said she also had an urgent matter to attend to, and although she would be present at the meeting, she could not preside on the day. She asked Mr C Malematja (ANC) to chair the day’s proceedings on her behalf.

Opening remarks

Minister Chikunga introduced the two agenda items that would be presented by the Department on the day. The first presentation would cover a range of issues, including legislation and the four strategic pillars of the integrated strategy on the development and promotion of cooperatives. She appreciated that the Committee was interested in the work of the DSBD in the context of the upcoming G20’s presidency of South Africa. The theme for that summit was ‘Solidarity, Equality and Sustainability’, which she said reflected the country’s commitment to building on the efforts and successes of previous G20 presidencies, while advancing the sustainable development agenda. It aligned with the values enshrined in the Constitution, the cornerstone of South Africa’s democracy. There were challenges in the geopolitical space, but the South African government aimed not to bring those into Troika discussions for the G20, and these would instead be handled by a Working Group in order to achieve the goals as promised in the theme, including shared solutions for an inclusive and sustainable future.

Ms Jane Sithole, Deputy Minister of Small Business Development, introduced the presentations, saying that they had recently reviewed the integrated strategy on the development and promotion of cooperatives, and had agreed that a more integrated approach was needed to support cooperatives. The DSBD participated in the G20 trade and investment working group. Task teams had been formed following a public call, and were made up of South Africans and international members. There were five task forces in the areas of foundation and alliance, finance and investment, inclusion and sustainability, market access, and township and rural entrepreneurship. Among upcoming events was the hosting of the StartUp20 task force meeting on 21-22 July in Johannesburg, where task forces would engage on issues in each of these strategic priorities. This would be followed by the main StartUp20 summit in November, which would also include the StartUp20 global awards.

DSBD on programmes and assistance targeting cooperatives’ development and support

Ms Thulisile Manzini, Director-General (DG), DSBD, led the presentation, providing an overview of the Department’s programmes and initiatives aimed at supporting cooperatives. It outlined their mandate, which included creating an enabling business environment, facilitating policy implementation, and providing both financial and non-financial support.

The integrated strategy on the development and promotion of cooperatives, guided by four strategic pillars, was highlighted as a key framework. These pillars focused on increasing non-financial support, creating demand for cooperative products, improving sustainability, and expanding financial assistance through instruments such as the Cooperatives’ Development Support Programme (CDSP). Achievements in 2023/24 and 2024/25 included financial and non-financial support for numerous cooperatives, the development of an apex cooperative framework, and partnerships with various stakeholders.

The presentation also showcased success stories of cooperatives that benefited from CDSP funding, resulting in increased turnover, job creation, and improved operational capacity. Future plans included supporting secondary cooperatives in sectors such as the oceans economy, agriculture, forestry, and cannabis, with significant job creation projections. In addition, the Department planned to strengthen oversight on funded cooperatives, revive inter-departmental coordination, and participate in international cooperative initiatives.

See attached presentation for further details

Programmes in place for participation of MSMEs in G20 Summit undertakings

The presentation provided an update on South Africa’s participation in the G20, highlighting the DSBD’s key initiatives. The G20 provincial launch in Gqeberha had showcased the potential of the oceans economy and township enterprises as drivers of growth, investment, and job creation. Through participation in various G20 working groups, South Africa supported policy reforms on green industrialisation, trade facilitation, and financial inclusion for women, with a focus on addressing systemic barriers to women’s economic participation. The DSBD emphasised innovation, entrepreneurship and collaboration to strengthen small businesses and cooperatives, particularly in marine and township economies.

South Africa, as G20 Chair, was leading the Startup20 (SU20) engagement group, which was developing policy recommendations through five task forces focusing on finance, market access, inclusion, sustainability, and rural entrepreneurship. The upcoming SU20 midterm meeting would shape a startup policy for South Africa, informed by international best practices. South Africa would also co-host the global small and medium enterprise (SME) ministerial summit with the International Trade Centre, targeting around 60 ministers to deliberate on micro, small and medium enterprise (MSME) access to markets, finance, and digital opportunities. The summit aimed to strengthen MSME ecosystems through roundtables, master classes, and business-to-business (B2B) sessions, advancing South Africa’s commitment to inclusive and sustainable economic growth.

See attached presentation for further details

Discussion

Mr H Kruger (DA) suggested that the Department add recycling to the list of products it had mentioned in the presentations. Recycling was becoming more important and was part of the Green Economy. He went on to ask about the 21-22 July StartUp20 conference, asking if the Committee could take part as he was interested in the discussions that would take place there.

Ms H Mbele (MKP) asked if the Apex body had finally been established, as she remembered there were challenges in the past to bring cooperatives together. She expressed the view that the new Small Enterprise Development and Financing Agency (SEDFA) should do more to support cooperatives and ensure the processes would be easier for them to come forward and seek support. Many of these were small startups without the resources to navigate the complex processes often required for them to receive financial and other support. She proposed that proper profiling of these entities be conducted and marketed so they could gain better market access, with a single website being one example of how this could be done.

She also advocated for more work to be done to bring the informal sector traders on board, with a special programme that would target them proposed, including training that would empower them. The same could be done with the transport sector, which would help address challenges in the e-hailing sector, amongst others. She was happy with the G20 Summit build-up, but work should be done to prepare the participants on time.

Ms S Singh (DA) requested that the Department communicate early the dates on which Member’s participation in the planned events would be expected so they planned well in advance. She had questions she would rather submit in writing, as she was concerned about some of them, especially the number of jobs created when compared to the amount of money invested. She made the point that she was glad that the funds made available to cooperatives were predominantly in the form of grants. She was, however, concerned that cooperatives, in the form of Cooperative Finance Institutions (CFIs), were established to lend other cooperatives money. Small businesses were not given grants, but loans. She asked for a detailed report in the future on how these CFIs operated.

Ms M Mmolotsane (ANC) asked to what extent the integrated strategy on the development and promotion of cooperatives had achieved its intended objectives. What progress had been made in the development of the guiding framework for the establishment of the apex cooperative, and how effective was the framework in addressing the needs of governance, representation and sustainability of the cooperative movement at a national level? She also asked how the Department planned to integrate the endorsed toolbox of investment policy reforms, to ensure that the international investment regimes support the sustainability of small businesses while aligning with broader global objectives such as sustainable development and inclusive economic growth. Lastly, she enquired how the DSBD supported MSMEs to leverage the refined G20 Framework on green industrialisation, particularly in enhancing investment opportunities through value addition at source, building a resilient supply chain, and facilitating investments in green sectors.

Ms B Mathulelwa (EFF) said the number of cooperatives supported financially had decreased from 148 in 2023/24 to only 49 in 2024/25, despite the growing need. They had demanded increased financial support for cooperatives in provinces like the Eastern Cape and KwaZulu-Natal, where the demand and poverty levels were high. She advocated for at least 60% of the budget to be allocated to historically disadvantaged groups like women in rural areas, youth and disabled-led cooperatives. The revival and expansion of the cooperatives incentives scheme (CIS) had been phased out in favour of blended finance, but accessibility remained a challenge. She called for the return of the CIS as a 100% grant-based scheme, particularly for startups.

There should be a streamlined grant programme for these in rural areas and townships, with reduced red tape. Many of the establishments remained disconnected due to lack of market access opportunities and procurement know-how. There should be quotas for cooperatives in school nutrition programmes, the sale of school uniforms, sanitation and municipal services. She proposed a review of municipal bylaws to support local cooperatives in procurement and inclusion in the district development plans.

Ms Mathulelwa urged a rapid roll-out of the 11 proposed CFIs, with provincial targets, especially in provinces like the Eastern Cape, Limpopo, and the North West. She said that the most supported cooperatives tended to be in agriculture, with less emphasis on industrialisation. She recommended a focus on textiles, cannabis, the oceans economy and agro-processing, to drive industrial localisation. She said 10% of the Department’s budget should be ring-fenced for industrial cooperatives, led by black entrepreneurs.

She also called for a Cooperatives Development Bill to institutionalise support, define roles in this context, and ensure the empowerment of the historically marginalised groups. While she noted the efforts of the Department, there were concerns. These included the rejection of the commodification of the oceans without meaningful community ownership. The DSBD and its agencies should commit to supporting black and worker-controlled ventures in maritime industries.

She said the EFF was sceptical of the StartUp20 engagement group, which remained elitist and urban-focused. They demanded:

• a defined budget for rural community innovation hubs;
• free access to digital skills, and training in every ward;
• the inclusion of worker-owned platforms in the market access strategy;
• legislated quotas for women-owned businesses in procurement, especially in government services;
• land redistribution to guarantee women’s access to production;
• the establishment of a women’s development bank, publicly-owned and community-governed; and
• the creation of parliamentary oversight mechanisms to monitor the implementation of G20 resolutions domestically.

She added that they called for an Act on the national informal economy and the development of cooperatives to be introduced, with clear targets and resource allocation. The DSBD should provide a report on funding allocation, gender equity, and business support under the G20. Lastly, she called for a G20 black business summit hosted by the DSBD, SEDFA, and local cooperatives.

Ms M Mafagane (MKP) raised the issue of post-funding support for cooperatives, which she said was lacking, and cited examples of establishments the Committee had visited in Limpopo and the Northern Cape. The latter was well supported, even with overseas market access, but did not show signs of growth. On the G20, she said the inclusion of the Committee would be important.

The Acting Chairperson said that it would be important for the Department not to lose sight of ‘baseline information.’ To explain this, he recalled the history of cooperatives in the country, and how they had first begun largely in the Department of Agriculture. He suggested that there should be interactions with such departments to ensure that past lessons would not be missed. He noted the good reports on a semi-rural province like KZN and the number of successes there, as well as the North West, which had increased its numbers. What strategy was in place to ensure that the lessons from these two would be replicated in even more rural provinces? He argued that this would go some way towards halting the influx into cities, and dealing with other social ills like crime.

DSBD’s response

DG Manzini said that the establishment of the apex structure was work in progress as they awaited feedback from the Companies and Intellectual Property Commission (CIPC). She had noted the comments on the inclusion and early notification of Members in the plans for the upcoming G20-related events.

She said the informal economy had been neglected, but emphasised that the Department was making significant efforts to address this through existing programmes, including the Informal Micro Enterprises Development Programme (IMEDP), which was regularly presented to ensure that such areas received due consideration. Regarding the suggestion to replicate departmental initiatives in deeper, underserved areas, she acknowledged it positively, stressing the importance of giving serious attention to these areas. Current reports, she said, indicated that such areas were continuously monitored.

Ms Manzini also acknowledged the concern raised about baseline information, confirming that the Department collaborated closely with other departments. Specifically, in relation to the green economy, it worked with the Department of Fisheries to ensure compliance with regulations and to cover all necessary areas, particularly in facilitating investments in the green sector. She also highlighted that while the Department of Fisheries led the oceans economy, the Department continued to focus on its own MSME-related initiatives within this space.

Mr Vukile Nkabinde, Acting Deputy DG: Integrated Cooperatives and Micro Enterprise Development, highlighted the importance of the guiding framework as an ongoing effort aimed at raising awareness among cooperatives to encourage proactive participation. He emphasised that cooperatives needed to be informed about the existence of the apex organisation to prevent the risk of it being privatised by individuals exploiting legal loopholes. The ICD was noted as playing a direct role in this process through the guiding framework, and its outcomes were regarded as critical. He added that the input from the Portfolio Committee was welcomed, with an emphasis on the value of being sensitised about the ICD’s outcomes. He noted that such engagements had not taken place for the past seven years, making the renewed interaction particularly important.

Ms Manzini stressed that the inclusion of recycling, as raised by Mr Kruger, would be considered, and expressed appreciation for highlighting this issue. Regarding the ICD, she noted that the DDG had addressed the matter, and there was a commitment to explore ways to improve its implementation, ensuring that it delivers meaningful outcomes rather than being treated as a once-off event. The importance of providing follow-up reports was acknowledged, with a commitment to produce a report on the outcomes of this specific initiative and identify areas for improvement where necessary.

Ms Qinisile Delwa, DDG: Enterprise Development and Entrepreneurship, DSBD, reported that the call for participation in the Startup20 initiatives had been opened to all interested parties, with no restrictions on the types of MSMEs invited. A large number of applications had been received, which had led to the establishment of a broader community within the ecosystem. This had allowed those not formally part of the Startup20 task forces to contribute by providing input, commenting on policy documents, and engaging through platforms created for knowledge partners.

She further highlighted that the township and rural task force was a South African initiative aimed at ensuring inclusivity, particularly for grassroots participants. Although not all were part of the official task forces, their input was sought to influence policy proposals. The upcoming meeting scheduled for the following week was identified as a midterm review, while the main Startup20 Summit in November would ensure wider representation of MSMEs, particularly from rural and township areas. The township and rural task force was specifically mandated to facilitate this representation.

Mr Nkosikhona Mbatha, Acting Chief Executive Officer (CEO), SEDFA, acknowledged the importance of intensifying post-funding support, and reported that efforts were underway to utilise the existing network to conduct quarterly visits to clients across various district offices nationwide. This priority aimed to ensure consistent client engagement and support, with interventions already in place, including improved access to markets. Specific examples were cited, such as client assistance during a visit to Limpopo, where signage needs were addressed, and improvements were made visible. In addition, he emphasised the need for effective ecosystem management to increase the visibility of small enterprises, including MSMEs and cooperatives, along with their products and profiles.

SEDFA was committed to leading coordinated efforts by creating a platform for relevant stakeholders to connect, supporting small businesses through ongoing training, market readiness initiatives, and opportunities to access both local and international markets. There was also recognition of the importance of including cooperatives in these initiatives, ensuring they received funding, training, and opportunities to showcase and sell their products internationally. The Acting CEO highlighted the necessity of developing a sustainable ecosystem for cooperatives to access funding more promptly, rather than waiting for periodic funding calls, with cooperative banking institutions considered as a potential mechanism to meet immediate financial needs. He concluded by saying that further detailed responses on these matters would be provided subsequently.

Ms Mathulelwa said that the listed demands she had raised were neither acknowledged nor responded to.

Concluding comments

Deputy Minister Sithole expressed gratitude to the Committee, the agency, and the team for the opportunity to present and receive valuable input. She said the plans presented were largely aligned with the existing annual performance plan (APP) and strategic plan, and any necessary amendments based on the Committee’s feedback would be integrated accordingly. She directed the team to routinely consider Members’ input and incorporate it into current plans, which would then guide the Department’s future implementation. She emphasised the collective responsibility of supporting the plans and assisting the Department in overcoming obstacles, as this was critical to driving economic growth and job creation — goals that were recognised as shared priorities by all stakeholders present.

The meeting was adjourned.

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