AfriForum, Solidarity and the DA have accused small business development minister Khumbudzo Ntshavheni, right, of lying under oath. Picture: SUPPLIED
AfriForum, Solidarity and the DA have accused small business development minister Khumbudzo Ntshavheni, right, of lying under oath. Picture: SUPPLIED

Race controversies have overshadowed President Cyril Ramaphosa’s relief programme to cushion businesses ravaged by the coronavirus pandemic.

Two ministers in Ramaphosa’s cabinet are being taken to court over empowerment conditions being placed on relief funding, moves that could stall the president’s efforts to bring relief for the most vulnerable sectors of the economy being battered by the pandemic.

On April 21, Ramaphosa announced a R500bn social and economic package for SA, which was welcomed by business for emphasising the rescue of small, medium and micro enterprises (SMMEs).

Afrikaner rights group AfriForum and trade union Solidarity approached the high court in Pretoria on Tuesday to review and set aside tourism minister Mmamoloko Kubayi-Ngubane’s decision to grant relief funds to distressed firms and establishments in the industry according to broad-based BEE requirements.

The case has stalled payment of R300m to businesses in a sector that contributes 7% to GDP and is responsible for 1.5-million jobs or 9.2% of total employment in SA.

Judgment in the matter is expected to he delivered by the end of this week.

Small-business development minister Khumbudzo Ntshavheni has also been caught up in a race row over relief funds.

She is said to have contradicted herself on the empowerment issue, with AfriForum, Solidarity and the DA claiming she might have perjured herself. Ntshavheni is accused of having lied under oath when she said initially that race would not be used as a criterion in giving relief to small businesses affected by the pandemic, only to tell parliament this week that BEE would be used as a criterion.

‘Fake news’

Ntshavheni had said at an interministerial briefing in Pretoria on March 24 that the purported racial requirement was fake news, and stressed: “We are supporting all small and medium enterprises across SA and there are no race requirements for funding.”

However, she said at the joint meeting of the portfolio and select committees for small business development in parliament on Tuesday that broad-based BEE would be used as a criterion for providing support to SMMEs.

“It is a fundamental requirement for transforming the economy of this country; we cannot choose as and when we use it,” she said when asked by  National Council of Provinces DA member Tim Brauteseth to provide clarity on criteria to determine relief measures for SMMEs.

B-BBEE is a critical requirement. We need South Africans … to own and have a share in the economy of this country.

“So when applications come through, we evaluate them on their need but we consider demographic representation, which does not only include race — it includes gender, it includes geographic location, it includes age, which is youth, it also includes people with disabilities. So those are fundamental to the transformation of this economy,” she said then.

On Wednesday, Ntshavheni, through her spokesperson, dug in her heels, saying the implementation of broad-based BEE did not “imply the exclusion of whites”.

The business sector says about 70% of SMMEs employing about 6-million people have been “greatly impacted” by Covid-19 and could be forced to close their doors when the lockdown is lifted. The value of assistance to SMMEs is more than R100m, and an additional R2bn would be made available to support them, Ramaphosa said.

Party ire

The decision to use race as a criterion for funding has raised the ire of political parties and stakeholders, who argue that this will disqualify many SMMEs from accessing government funding to mitigate the effect of the coronavirus pandemic.

DA leader John Steenhuisen called on Ntshavheni to explain her remarks about the SMME Debt Relief Fund, failing which the party could take legal steps to ensure all South Africans were treated equally in qualifying for relief measures.

Steenhuisen said it was crucial for Ntshavheni to explain urgently how race would be considered in evaluating applications or what the legal basis was for making race a criterion in awarding relief funding.

“If we do not receive a satisfactory answer by this [5pm, Wednesday] deadline, the DA will approach the high court for appropriate, urgent relief to prevent the unlawful use of race in relation to Covid-19 funds, and unfair discrimination on the basis of race,” said Steenhuisen.

AfriForum CEO Kallie Kriel told Business Day on Wednesday that his organisation was going to take legal action against Ntshavheni, similar “to the one we took against Kubayi-Ngubane” on Tuesday.

What was most worrying was that “the minister lied, because on March 24 she said this was fake news and that race would not play a role”, said Kriel. “It’s clear that she has lied. We have no other option. We have instructed our legal team to take legal action against the minister.”

Civil action

Solidarity CEO Dirk Hermann said on Wednesday: “It is shocking that a minister is prepared to declare under oath that race would not be a criterion for the allocation of emergency relief, and now, straight after the department of tourism court case, she confirms it to be a criterion after all. The minister is committing perjury.”

He said Solidarity would continue with an “urgent civil action against the department to have the discriminatory race criterion for relief funds declared unlawful, should Solidarity not receive an undertaking by the department by 1pm on 1 May 2020 that this requirement would be scrapped”.

Ntshavheni’s spokesperson, Priscilla Monama, said in an e-mailed response on Wednesday night that the “DA cannot pick and choose which laws must apply when and how, as all laws of the republic are equal”.

“BBBEE is not about racial interests as the DA would want to frame it, but it is equally about the promotion of the interests of women, youth and people living with disability,” said Monama.

“Minister Ntshavheni further clarified that when taking decisions about funding, the department also considers demographic representation including geographical spread and the rural/urban balance as this funding is for all South Africans,” said Monama.

She would not be drawn on why the minister allegedly lied, saying the criteria were clearly stated in the official document.

“The minister reiterates that the criteria applied is fair, equitable and just.”

mkentanel@businesslive.co.za