BOSA exposes millions of rands of corruption robbing township entrepreneurs, calls for MEC Maile’s resignation
16 August 2024
Today BOSA releases an extensive dossier exposing corruption within the Gauteng Department of Economic Development which has siphoned off millions of rands intended to support entrepreneurs in the township and informal economies.
With 11.5 million South Africans unemployed, and many more struggling to make ends meet, it is reprehensible that politicians and their connected cronies continue to enrich each other at the expense of citizens.
The township economy is central to any plans to not just ignite economic growth and job creation, but to alter the face of wealth creation and distribution in South Africa. Townships remain dormitories of unemployment and underdevelopment. That is why public-private collaboration to invest in - and grow - the township economy is vital.
While public funds are made available, some politicians have abused those funds for their own gain. In this dossier, compiled by BOSA on the basis of information provided by victims and whistleblowers, we can confirm that:
- Family Tree Holdings was selected by the Gauteng Department of Economic Development to carry out provisions of the Gauteng Township Development Act
- Family Tree received R25 million from the Gauteng Enterprise Propeller (GEP) and R25 million from the Industrial Development Corporation (IDC). The amount was matched by private sector funding of R50 million, to bring the total to R100 million.
- The above funds were housed in the Kasi Mnotho Fund.
- Several township entrepreneurs have reported receiving no funding whatsoever, despite being fully eligible.
- Family Tree Holdings and Kathorus Shop Owners Association benefited financially by deceiving township entrepreneurs as to how to receive government funding.
- The Gauteng Department of Economic Development was aware of the above.
- Victimised township entrepreneurs were sent lawyers letters by Family Tree Holdings’ legal team after enquiring about the status of their allocated funding
- Family Tree Holdings failed to cover the rental and travel costs of township
- entrepreneurs who attended their unstructured and costly training courses.
- Family Tree Holdings misrepresented their employment figures at the Thokoza Distribution Centre.
- In two years, Family Tree Holdings spent R3 300 000 to create ‘at least 5 jobs’ at two distribution centres.
- The Economic Development Committee’s oversight found inconsistencies in financial and operational reporting from both the Department and Family Tree Holdings
Therefore, today we are making the following announcements:
1. For a full Special Investigating Unit (SIU) probe into the malfeasance;
2. For the Public Protector to consider the facts at hand and decide whether an investigation is required;
3. For the Gauteng Legislature to implement the recommendations of the Economic Development Portfolio Committee (in the 6th Administration), that called for a forensic report to look into the relationship between Gauteng economic development & Family Tree Holdings; and
4. For the MEC for Economic Development in Gauteng, Lebogang Maile, to take political responsibility for this matter and offer his resignation to Premier Panyaza Lesufi within 24 hours.
On the policy front, BOSA will continue to advocate for Special Economic Zones. Creating Township Special Economic Zones (TSEZs) by investing R200 billion will create new jobs and wealth for disadvantaged citizens. This is a justice issue that we will not relent on.
BOSA, through Parliament, has asked the Minister of asked the Minister of Trade, Industry and Cooperation the following questions and await his response:
(a) What is the total number of Special Economic Zones (SEZ) declared across the country? (b) Where are these SEZs located? (c) What is the total investment attracted into these SEZs in the past five years? (d) Are there plans for further SEZs? If so, where? If not, why not?
Moreover, have any feasibility studies been conducted into the viability of creating township SEZs? If not, we urge the Minister to explore this possibility, as it could be a game-changer for township economies and the broader South African economy.
We will continue to fight on the side of industrious South Africans looking to innovate and to make a living in an economy that is skewed towards a select few. Only then can we meaningfully build one South Africa for all.
Issued by Ayanda Allie, BOSA Member of the Gauteng Legislature, 16 August 2024
