DA, AfriForum to sue govt over BBBEE requirement for COVID-19 SMME funding

Image credit: Twitter/Dept of Small Business Development

The Democratic Alliance (DA) and advocacy group AfriForum have announced that they intend taking the Department of Small Business Development to court over its decision to use Broad-Based Black Economic Empowerment (BBBEE) criteria for COVID-19 relief funding for small, medium and micro-sized enterprises (SMMEs).

In a statement on Wednesday, DA interim leader John Steenhuisen said the party had given Small Business Development Minister Khumbudzo Ntshavheni up to 17h00 on Wednesday to clarify the legal basis for the decision.

The DA specifically asked the Minister to answer two questions: in terms of what law or policy is race considered in the evaluation of applications, and the role race plays in evaluating applications for relief.

BBBEE ‘a fundamental requirement’

In a virtual briefing to Parliament on Wednesday, Khumbudzo said BBBEE is a “fundamental requirement for transforming the economy of this country.”

She added, “We cannot choose as and when we use it. BBBEE is a critical requirement. We need South Africans, all of us, to own and have a share in the economy of the country.

“So, when applications come through, we evaluate them on their needs, but we [also] consider the demographic representation, which does not only include race, [but also] gender, geographic location, age and people with disabilities.”

However, Steenhuisen accused Ntshavheni of reneging on an assurance she gave in March that the department would consider all applications equally regardless of race.

AfriForum joining the fray

He said, “Yesterday’s about-turn by the minister makes a mockery of government’s SMME relief measures, and is an insult to thousands of struggling small business owners who not only contribute hundreds of millions of rands in tax revenue, but who also employ thousands of people who now stand to lose their jobs, many of whom are black.

“If we do not receive a satisfactory answer by this 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.”

AfriForum, which has already taken the Department of Tourism to court over the same matter, also said it had instructed its lawyers to take legal action.

AfriForum CEO Kallie Kriel said, “As if it is not unethical enough that government is even in this time of crisis promoting a racial agenda, the situation is being worsened by the Minister’s deliberate misrepresentations.”

In another media briefing on Wednesday, Ntshavheni said the government had set aside R530 million to support SMMEs.

“To date, the scheme has approved over R235 million, protecting over 11,000 jobs. The spaza shop support scheme, which was launched about a week ago, has already received over 104 applications with 88 already approved,” she said.

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