Lindiwe Zulu. Picture: DAILY DISPATCH
Lindiwe Zulu. Picture: DAILY DISPATCH

Small business development minister Lindiwe Zulu is driving the development of a draft national strategy to reduce red tape for small businesses, which she anticipates will be ready by the end of 2019 for consultation.

Red tape and the bureaucratic hurdles small businesses have to overcome has long been a burden on their development even though small businesses are regarded internationally as the engine of economic growth.

In a written reply to a parliamentary question by DA MP Hendrik Kruger, Zulu said “the urgent need for a national strategy on red tape reduction is important”. She added that the strategy would provide a clear programme of action for the period 2020-2024. The cost of developing the strategy is estimated at R2m.

The department of small business development hosted a national indaba on red tape strategy in November to assess key red tape reduction initiatives. 

Zulu believes it is premature to prepare draft legislation for the reduction of red tape because a strategic approach or framework has to be developed first as a guiding document across all spheres of government. 

The minister was also asked by DA MP Toby Chance what progress her department has made in ensuring compliance by government departments with the requirement to pay suppliers within 30 days. This requirement is provided for in the Public Finance and Management Act. Non-compliance with the 30-day payment requirement has crippled small businesses, resulting in many of them having to close.

Zulu said the performance of departments in this regard is being evaluated and recommendations would be developed as to the type of interventions required.