NEF cuts business plan funding for entrepreneurs

14 April 2015

The National Empowerment Fund (NEF) has cut one of its core services which sought to assist South African entrepreneurs with the design of business plans, a cost these entrepreneurs will now have to foot themselves. This will certainly have a damaging effect on the ability of entrepreneurs and SMME's to reach the NDP's 10 million jobs target by 2030.

A concrete and extensive business plan is key to the sustainability of any small business, and thus cutting this service will only add more cost and regulatory burden to already struggling entrepreneurs and small businesses.

The service, provided by a company called Enterprise SA, was suddenly cut this week via email by Enterprise SA CEO, Rodney Prinsloo. ""We hereby inform you that the NEF's Business Planner Tools will not be available until further notice"" said Prinsloo.

While the NEF says that the service was terminated because the contract with Enterprise SA had lapsed, Prinsloo claims the NEF cancelled the contract without the requisite two month notice period, due to the fact they owe his company over R400 000 in back pay dating back to May last year.

I will therefore be writing to the Chairperson of the Portfolio Committee on Trade and Industry, Joan Fubbs, requesting she summon NEF CEO, Philisiwe Mthethwa, to appear before the Committee and explain the following:

Why this service was cut so rapidly, without any notice;

By which date will a tender process for a new service provider be initiated;

The reason why this service is outsourced and not provided in-house by the NEF;

How much back pay does the NEF owe Enterprise SA; and

Does the NEF plan on paying back the money?

Ms Mthethwa, who is the wife of Arts and Culture Minister, Nathi Mthethwa, and the daughter of IFP Leader, Mangosuthu Buthelezi, is certainly no stranger to controversy. 

According to the NEF's Annual Reports, Philisiwe Mthethwa has earned R25 097 989 since her appointment as the fund's CEO in 2005, which includes R9 778 751 in bonuses. It is presently unclear what these bonuses are for given that the NEF seems to be reneging on its core mandate to empower South Africa's small business sector. This ""bonus"" money would go a long way to encouraging small business development. 

Moreover, in 2013 she was placed on special leave during an investigation into allegations of fraud and corruption against her. Among the allegations was a R9.8 million loan granted to her brother, Nkanyiso Buthelezi, which was not paid back.

Instead of functioning as a quick pit-stop for the well-connected few, the NEF should be focusing on supporting entrepreneurs.

The DA has always supported the NEF's mandate, previously calling for more funds to be made available in order to promote and support business and entrepreneurs. (See link here)

The DA will persist in its endeavour to have Ms Mthethwa held to account.

Statement issued by Dean Macpherson MP, DA Shadow Deputy Minister for Trade and Industry, April 14 2015