Trade and Industry Minister Rob Davies. Picture: ROBERT TSHABALALA
Trade and Industry Minister Rob Davies. Picture: ROBERT TSHABALALA

Hundreds of millions of rand meant for beneficiaries of the Employment Creation Fund (ECF) have not been disbursed, allegedly because of a dispute between the Treasury and the Department of Trade and Industry, which administers the fund intended for business support.

Trade and Industry Minister Rob Davies said in a reply to a parliamentary question that the balance due to ECF projects was R508.8m. "There are 31 projects that are in progress and will be completed once funds have been received from National Treasury," Davies said.

Davies said the Treasury had disbursed R865m to the department, of which R709m had been disbursed for fund projects. These funds came from the €100m donated by the EU for employment creation support in 2009.

SA’s unemployment rate is now at 27.2%.

DA spokesman for trade and industry Dean Macpherson said on Wednesday that he had received many complaints from a number of companies that were not getting the funds they had been promised.

They had made plans and investments on the basis of these promises.

Macpherson tabled a copy of an extraordinary letter sent to fund beneficiaries late in July by department fund manager Paseka Masemula. Macpherson has requested that the Treasury and department officials be called to explain.

Development delayed

In his three-page letter Masemula suggested that Treasury officials were holding back economic development and told fund beneficiaries that the ECF secretariat "are not confident that you are going to get your money any time soon, if ever".

Masemula advised the ECF clients to address their queries to Treasury officials.

He explained the background to the dispute, which dates back to December 2016, saying it arose from the Treasury’s demand for an audit of the entire fund from inception.

In the letter Masemula says this request for an ECF audit was made despite the expenditure of the fund having already been audited for verification purposes. He said the Treasury did not accept the audit commissioned by the fund because of a disclaimer by the auditors.

According to Masemula, the Treasury had commissioned another audit report and arising from this document instructed the department to enhance administrative processes and for fund beneficiaries to adhere to certain instructions.

Masemula said in his letter that a conspiracy theorist would be forgiven for believing that the impasse with the Treasury "is a deliberate and organised [bid] to undermine African leadership and more severely to undermine and totally distort the programmes of the mass democratic movement on [the] eradication of poverty, unemployment and inequality".

Conspiracy theorists would question how "characters in the public service are so powerful to undermine our leadership" and to be able to destroy the efforts of the state to lift blacks out of poverty. These "characters" could be held responsible for the economy’s ills, he wrote.

"These things are just treasonous in a normal world and one could ask how does the state allow such operating systems to assume such critical functions of black SMME development and economic equalisation without vetting their actual orientations? This is a parallel state," he said.

Masemula goes on to state that as he was not a conspiracy theorist, he would not promote these views.

He indicated a wish for the department to give up the programme altogether as the Treasury had not even provided funds for day-to-day administration, which had been paid for out of the department’s budget.