Finance and Economic Opportunities

I am informed of the following:

1. (a) (i) (ii) & (c)

The following information should be requested from each municipality in the province.

(b) (i)(ii) Please see (2) below

(2)

I am informed of the following:

(a)

SMME booster fund:

Since 2019, the SMME Booster Fund has included a category to support municipal infrastructure development such as informal and township trading places. To date, the following municipalities have been supported, to create markets to the benefit of the township sector.

• In Hessequa the Kwanokuthula business hub allows the municipality the opportunity to expand on a small-scale project, to construct four (4) business units in the hub to support more light industrial type of businesses.
• In Oudtshoorn the Oudtshoorn business hive and trading area will house five (5) traders in containerised units in Bongolethu.
• In Langeberg, the Bonnievale informal trading site and the Montagu informal trading site will serve twenty-two (22) existing and new informal traders. 
• In Mossel Bay, the Mayixhale Business Hub and Wolwedans market site includes the establishment of seventeen (17) refurbished containers which will house twenty-three (23) local businesses.
• In Swellendam, SMME trading zones in the township of Smitsville in Barrydale houses containerized LED units and support six (6) businesses.
• In Laingsburg, the New Business Park is a trading facility that consists of four (4) units to accommodate businesses in the retail sector. 
• In Cape Aghulas, the Ou Meule Street trading area (Lesedi Square) has six (6) trading containers hosts six (6) businesses employing eight (8) people.
• In Witzenberg, the Skoonvlei SMME business hub in Ceres provides industrial and business space for traders through ten (10) customised containers.
• In Mossel Bay, the Kwanonqaba Youth and Business Park has nineteen (19) trader units that actively trade.
• In Mossel Bay, De Almeida trader hub ensures that fifteen (15) local businesses and three (3) day-traders have attractive and affordable spaces to do business.

The Department along with the municipalities implement these Municipal Booster initiatives, along with Seda to provide business development support and training. Further, the partners engage and co-opt departments like the Department of Agriculture, the Department of Land Reform and Rural Development and agencies like SEFA to provide additional support to beneficiary businesses.

Red Tape Reduction Unit regarding informal trading permits:

The role of the Red Tape Reduction Unit in assisting municipalities to reduce red tape regarding informal trading permits has to date been on a specific-case basis. All municipalities in the province have informal trading permitting processes. Specific cases can be directed to the Department for investigation and address.

The Business Development Support Programme:

The Business Development Support Programme is a collaborative initiative between the Department and the Drakenstein municipality. The initiative supports entrepreneurs trading within the Drakenstein townships and provides small and micro businesses (formal and informal) with non-financial support (e.g., equipment and machinery, marketing collateral, etc.) to support the sustainability and growth of the business. The programme intends to formalise at least three of the businesses that operate informally. This is to enable the businesses to increase opportunities for growth offered through structured markets like public procurement and private sector business opportunities.

2. (b)

SMME Booster Fund:

We cannot answer on municipal budgets for informal trading. This information should be sought from individual municipalities. However, please find below the funding provided by municipalities in projects that the Department partnered on through the SMME Booster Fund.

Red Tape Reduction Unit:

The overall budget for the Red Tape Reduction Unit was R10.297 million in 2019/20, R12.681 million in 2020/21, R12.861 million in 2021/22 and R23.513 million in 2022/23.

The Business Development Support Programme:

The budget allocation was R500 000.00 and was provided in this financial year (2022/2023).

Additional comment:

The Western Cape Government acknowledges the very important role that the informal economy plays in the Western Cape and South Africa.

This point is demonstrated in the 2022 Provincial Economic Review and Outlook, which showed that approximately 30 per cent of employment in South Africa came from the informal economy, and 19 per cent of employment in the Western Cape, which amounted to 439 000 jobs in the Western Cape in the first quarter of 2022.

As shown in the 2022 PERO, there was a declining trend in employment in the sector from quarter 1 of 2017 to quarter 1 in 2022, however I was pleased to see that from the latest quarterly labour force survey from Stats SA, that employment in the informal sector increased in the Western Cape by 22.2 per cent from quarter 4 of 2021 to quarter 4 in 2022. Which was significantly higher than in the rest of the country, where it grew by 11.6 per cent over the same period.

It should however be noted that as informal businesses are registered and formalised, employment from these businesses are no longer classified as informal employment, but rather formal employment.