Portfolio Committee of Economic Development, Environment and Agriculture and Rural Development of the Gauteng Legislature visited offices of Gauteng Enterprise Propeller (GEP) this past week and met with the MEC Hon. Kgosientsho Ramokgopa and the Acting CEO and senior officials of GEP to deal with outstanding issues emanating from the 4th quarterly performance report of the last financial year and budget report for the current financial year.
The reports were presented to the Committee on the 30th of July 2019 and the Committee noted few concerns relating to GEP attaining only 50% of their performance targets which the Committee found to be unacceptable as it might have a huge impact on achieving predetermined provincial government objectives as well as the National Development Plan (NDP) goals. The Committee was also concerned with the longstanding challenge of the entity’s inability to collect on loans that were rendered to entrepreneurs. It was reported to the Committee that a historic debt amounting to R38 million has been written off due to the lack of proper systems that ensures repayments of the loans such as pre-screening of loan beneficiaries. The Committee was told that non-repayment was primarily as a result of poor financing model that GEP has previously been operating on over the years. However, it was also reported that GEP has been able to recoup about R19 million from loan repayments and the funds has been injected back into the business support unit of GEP to be used to improve their operating systems and provide support and development to Small, Medium and Micro Enterprises (SMMEs).
With an annual operating budget of R245 million of which R93 million is allocated to the grants and loans core programme, GEP has been found in the past to be unable to provide adequate financial support to SMMEs and township enterprises.
The Committee has received complaints from entrepreneurs who have been frustrated and dissatisfied with the work of GEP with regards to funding of their businesses. The Committee invited the entrepreneurs to the meeting to air their views on the challenges they face when applying for funding at GEP. The Committee heard how several applicants are frustrated by lack of feedback on the status of their applications. One of the entrepreneurs, Ms Tshepi Nthinya told the Committee that she applied numerous times for business support funding last year and she was still awaiting feedback from GEP. However, other entrepreneurs like Mr Fanele Sonti from Daveyton stated that he was satisfied with how GEP efficiently dealt with his application.
The Committee raised a general concern emanating from some of submissions it received with regards to the delays in processing of applications which reportedly leads to enterprises losing business opportunities with other departments and entities and at worst leading to collapse of their businesses. The Committee, therefore, urged GEP to improve on their application systems and ensure that loans are provided to businesses who will remain sustainable and will be able to make repayments irrespective of the economic climate.
The Portfolio Committee requested GEP to give feedback within 14 days and follow up in assisting the applicants and ensure that more people fully benefit from the funding as provided by GEP which could also contribute to job creation in the Province.
Other concern noted by the Committee related to the vacancy rate of 23% and the longstanding issue of senior positions not being filled at GEP. The Committee heard that the positions of CEO and COO have been vacant since 2015 and are still currently being occupied on an acting capacity. MEC Hon Ramokgopa then committed to the Committee that the senior positions will be permanently filled by the end of December 2019.
Lastly, the Committee requested to be provided with the Forensic Reports that were commissioned on the Gauteng Enterprise Propeller in order to track if the recommendations outlined on the reports are being implemented. The Committee has given the MEC until the end of the October to provide it with the forensic reports.
The Committee will continue to monitor the performance of GEP on a quarterly basis including monitoring the recommendations contained in the forensic reports.
ISSUED BY: Hon Lindi Lasindwa, Chairperson of the Portfolio Committee of Economic Development, Environment and Agriculture and Rural Development, Gauteng Provincial Legislature
For enquiries please contact Mr Abe Mokoka 011 498 5412 or 079 882 5425; e-mail: amokoka@gpl.gov.za
