Portfolio Committee on Small Business Development 18 March 2015

1. Briefing by the Department of Higher Education and Training on its Strategy/Policy for SMMEs and Co-Operatives Portfolio Committee on Small Business Development 18 March 2015

2. Introduction • The Department of Higher Education and Training (DHET) was formed in 2009 after reconfiguration of government, from splitting from the erstwhile Department of Education into the Department of Basic Education (DBE) to focus primarily on schooling and DHET to focus on further and higher education, as well as skills development. • The Skills development function was previously located within the Department of Labour, transferred to DHET in 2009, by Presidential Proclamation. • DHET’s mandate is to create a fully articulated Post-School Education and Training (PSET) system – (NOT equivalent to post-matric) • Increase opportunities; • Improve access and articulation in a differentiated system; and • Improve skills production pipeline in intermediate and high level skills. • Critically, change the shape and size of the system- more Technical and Vocational Education and Training (TVET) versus university graduates

3. Purpose of DHET • Provide strategic and policy direction to the Institutions and entities of the Post-School Education and Training (PSET) in the country, public and private. • Premised on the Minister’s Delivery Agreement and the White Paper for Post-School Education and Training. • Constantly identifying the priorities for PSET system. • Planning to meet the immediate and long-term education and training needs of the country, within the context of the National Development Plan – Vision 2030. • Monitor implementation of plans in the PSET system

4. Responsibilities of DHET • Public universities, National Institutes of Higher Education and private higher education institutions • Public and private Further Education and Training (FET) Colleges • Adult Education Training centres and all other adult education initiatives with the exception of DBE’s Khari-Gude basic literacy and numeracy programme • The levy grant institutions: Sector Education and Training Authorities (SETAs) and the National Skills Fund (NSF) • Regulatory institutions and other organisations, systems, and frameworks: National Qualifications Framework (NQF), South African Qualifications Authority (SAQA), two quality councils ([Council of Higher Education] CHE/ [Higher Education Quality Committee [HEQC] and Quality Council of Trades and Occupations [QCTO]), National Skills Authority, National Board for FET (NBFET) and National Board for Adult Basic Education and Training (NBABET) • The Human Resources Development Strategy for South Africa (HRDSA), whose council is chaired by the Deputy President, Secretariat services provided by the DHET.

5. The Post-School Education and Training System SKILLS PLANNING QUALITY ASSURANCE AND ADVISORY BODIES, QUALIFICATIONS FRAMEWORKS UNIVERSITIES, UNIVERSITIES OF TECHNOLOGY AND COMPREHENSIVES Workplace learning governed by SETA’s COLLEGES NSDS DIRECTING ROLE OF SETAs AND NSF WITHIN COMMITMENTS OF HRDSA, NGP, IPAP, NDP, RURAL DEVELOPMENT, OTHER GOVT PRIORITIES

6. Priorities of Government • Government outlined 5 key priorities as follows: • Education; • Health; • Fight against crime and corruption; • Rural Development; and • Job creation. • All these priorities are inter-related: • Success of each is very much dependent on the success of others • Broken down into 14 government outcomes, following the introduction of an outcome-based system of delivering services • The outcomes system, by implication, breaks down the silos in terms of service delivery, by recognizing the inter-dependencies that exist in aspects aimed at achieving government objectives.

7. Priorities of Government • Cabinet adopted “A Skilled and Capable Workforce to Support an Inclusive Growth Path” as one of the priority outcomes for this government – Outcome 5 • A skilled and capable workforce is critical for: • decent work; • an inclusive economy; • labour absorption; • rural development; • reduction of inequalities; • creation of a more diversified and knowledge intensive economy; • realisation of all other Government Strategies, including growing the SMME sector in the country.

8. Five Interlinked Outputs of Outcome 5

9. Policy Framework • In February 2011, the Minister of Higher Education and Training launched the third phase of the National Skills Development Strategy (NSDS III) • The strategy sets out eight (8) goals that must be achieved by the PSET. Goal 6 of the NSDS III speaks of “Encouraging and supporting cooperatives, small enterprises, worker initiated, non-governmental organisation (NGO) and community training initiatives.” • First Outcome: Cooperatives supported with skills training and development, to expand and contribute to sector economy and employment growth; • Second Outcome: Partnership projects to provide training and development support to small businesses are established in all sectors and their impact reported on; and • Third Outcome: Support for Worker, NGO and community-based education programmes are supported and impact thereof measured and reported on.

10. Skills Levy Institutions • The NSDS III goals and outcomes cannot be achieved without cooperation and coordination from all key stakeholders, which include, but not limited to: • Government agencies (i.e. [Small Enterprise Development Agency] SEDA, training providers, employers, etc.) • DHET institutions, SETAs and NSF are the key drivers of the NSDS III. • The main responsibilities of SETAs and NSF are outlined in the NSDS III.

11. Key Training Interventions - Cooperatives • Output 4.6.1.2: Sector projects are established by sector stakeholders, supported by the NSF. • The NSF’s contribution to the Cooperatives includes (as an example): • Project: Cooperative Development Facilitators Learnership (12 months) – 2011/12 • 187 Cooperative Development Facilitators completed (33 drop-outs) – • 31 August 2012 • Learners were across all the provinces • Total NSF costs for this project: R13.3 million • Co-operative Development (using the above-mentioned trained 187 Cooperative Development Facilitators) • NSF allocation: R163.5 million • Project duration: August 2012 to July 2015 • Target beneficiaries: 5 000 learners of co-operatives • Progress: 2870 learners benefited thus far during the 2012/13 and 2013/14 financial years. • Expenditure to date amounts to R54.9 million.

12. Key Training Interventions – Cooperatives • Skills development interventions at 28 sites – Kuruman, Vryburg, Mathopestad, Botshabelo, Bloemfontein, Butterworth, King Williams Town, Addo, Patterson, Bushbuckridge, Nkomazi, Siyabuswa, Marapyane, Tzaneen, Lephepane, Giyani, Mogjadji, Nuanitaa, Johannesburg, Katlehong, Kagiso, Atteridgeville, Snake Park, Etwatwa, Sebokeng, MooiMpofana, Stanger and Esikhaweni. • SETAs assisted and supported Cooperatives as follows: • 2012/13 = 578; and • 2013/14 = 960

13. Key training interventions - SMMEs National Skills Fund The Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) Basic Entrepreneurial Skills Development Programme (BESD) Since 2009 to 2011, the NSF has co-funded with the GIZ, the GIZ BESD programme resulting in: • more than 100 unemployed youth participated in the Entrepreneurial Development Practitioners (EDPs) course, • ± 450 Emerging Entrepreneurs (EEs) have participated and some are still participating in the Emerging Entrepreneur courses, • 350 Emerging Entrepreneurs finished their training in the second half of 2011, and • Over 90% of the unemployed young people who have been trained as EDPs, completed the course successfully. GIZ surveys have also shown that between 70-80% of participating emerging entrepreneurs who completed the course report more customers and higher incomes and, on average, one new job was created per emerging entrepreneur.

14. Key Training Interventions - SMMEs • National Skills Fund (continue from previous slide) • SEDA/NSF Basic Entrepreneurial Skills Development Programme (BESD) • Allocation of R84 million over 3-years to Small Enterprise Development Agency (SEDA) to: • train ±200 Entrepreneurial Development Practitioners (EDP’s); and • provide skills development to 2000 Emerging Entrepreneurs in all the provinces. • The implementation planning of phase 1 commenced in early 2013 with GIZ providing technical assistance to SEDA during this phase. • The roll-out of the training interventions commenced on 01 September 2014, namely 194 active Entrepreneurial Development Practitioners (EDPs) learners in training at 18 sites

15. Key Training Interventions – SMMEs….. cont (i.e. Bloemfontein = 11, Botshabelo = 8, Burgersfort = 12, Bushbuckridge = 10, George = 6, Humansdorp = 12, Kimberley = 12, Klerksdorp = 10, Kuruman = 10, Philippe (WC) = 10, Polokwane = 12, Queenstown = 12, Rustenburg = 11, Thohoyandou = 12, Tzaneen = 12, Uitenhage = 12, uMgungundlovu = 10, and Welkom - 12. This training will be completed by the end of May 2015, after training provided by these trained EDPs for the ±2000 Emerging Entrepreneurs (EEs) will commence. Drop-outs to date total 28. The BESD Steerco (current members are DHET, SEDA and GIZ) has decided to amend the Steerco Terms of Reference to also include the new Department of Small Business Development. • SETAs assisted and supported Small Businesses follows: • 2012/13 = 18 660; and • 2013/14 = 13 460

16. Conclusion • The establishment of a focused Department is a welcome development in the county’s efforts to develop the SMME and Cooperative sector • The DHET is looking forward to contributing to the strategic direction provided by the new Department and will continue to strengthen partnerships with all role-players as recommended by the NSDS III.

17. Thank You