Small business development minister Lindiwe Zulu. Picture: DAILY DISPATCH
Small business development minister Lindiwe Zulu. Picture: DAILY DISPATCH

Minister of small business development Lindiwe Zulu must release the auditor-general’s (AG) report on its investigation into corruption by officials in her department, which was finalised in March. She must also initiate lifestyle audits on all department staff, many of whom are living lifestyles way beyond what their salaries would afford.

The portfolio committee on small business development suspected corrupt activities in certain programmes after conducting oversight visits to Limpopo, KwaZulu-Natal and Mpumalanga. At the committee’s insistence, the department called in the AG to investigate. On the strength of the report, Zulu issued immediate suspension notices to nine department officials but is now refusing to release the report or name the offending officials.

Staff from the AG’s office presented the report’s findings to members of the portfolio committee last week at a specially convened meeting in Centurion.

The investigation probed allegations of corruption in the black business supplier development programme (BBSDP) and the co-operative incentive scheme (CIS)  for the financial years 2015/2016 and 2016/2017.

During this period, the department approved R699m worth of BBSDP and R150m worth of CIS grant applications. Of those the AG sampled in its investigation, up to 65% of the BBSDP grants and 50% of the CIS grants were suspect or the supposed beneficiaries did not exist. There was overwhelming evidence of collusion between officials, service providers and grant recipients, leading to the department initiating disciplinary proceedings and laying criminal charges against the individuals concerned.

The department inherited these programmes from the department of trade and industry, along with the officials running them. They have both been operating for more than 10 years and have distributed billions of rands of grants since then.

In their presentation to the committee, the AG staff expressed the view that a wider investigation into all the department’s programmes and entities should be conducted, including the small enterprise development agency (Seda) and the small enterprise finance agency (Sefa). Seda alone disburses R500m worth of grants every year, which are ripe to be corrupted.

The government has promised a naming and shaming approach to corruption and the identity of numerous alleged government officials have been revealed in recent months at the Zondo commission into state capture and through other media revelations.

It is unacceptable that money budgeted for deserving small businesses and co-operatives has been diverted into the pockets of corrupt officials who are now being shielded. Furthermore, Zulu must ensure that these officials are not being scapegoated, protecting possible corruption and malfeasance by more senior officials in her department, many of whom came from the department of trade and industry where the corruption started.

This saga places a sorry marker at the end of Zulu’s five-year term. If she had been on the ball and taken action on the portfolio committee’s urgings sooner, millions of rands could have been saved instead of being used to buy fancy clothes, cars and houses for corrupt government officials.

Toby Chance 
DA small business development shadow minister for