GAUTENG’s R90m bid to create at least 100,000 new entrepreneurs by next year has been in limbo for 10 months, after the provincial government halted the allocation of funds to companies running the project.
Gauteng Premier Nomvula Mokonyane last month placed economic development department head Khulu Radebe on precautionary suspension pending an investigation, following "the collapse" of several entrepreneurship development programmes.
The Youth and Graduate Entrepreneurship Development programme (Y-Age) was the Gauteng government’s contribution to President Jacob Zuma’s target for South Africa to create 5-million jobs by 2020. The government’s failure to create jobs was among factors that led to recent downgrades in South Africa’s sovereign credit rating.
The project was launched in October 2011. According to the three partner companies, they had received R30m by last April for the first year of work. They had expected that the remaining R60m would be paid over a two-year period.
Each of the Y-Age entrepreneurs identified by the project were expected to hire at least five people with the funding they received, which would have created more than 500,000 jobs.
David Mashishi of the South African Centre for Organisational Development — which had been running Y-Age in a public-private partnership with Oresego Holdings and Hope Africa — said the unexpected end to funding from the Gauteng Enterprise Propeller (GEP) had caused at least 680 business plans to stall.
The GEP was established in 2005 under the auspices of the Gauteng economic development department to provide support to small, medium and micro entrepreneurs.
"We are looking to the private sector and other government agencies for funding. At the moment, no training is taking place," Mr Mashishi said.
Ayanda Nkuhlu, a shareholder in Oresego Holdings — which is "temporarily not operational" — said the Gauteng government had queried Y-Age’s finances, but an audited financial report had been provided and the government had "never formally came back to say they are unhappy".
"The set target was lowered, but the money had been properly spent," he said.
Hope Africa CEO Delene Mark said she was not sure what would happen to the project because no details had been forthcoming from the GEP.
"There is hope that we will have discussions soon," she said.
Mr Mashishi said discussions were continuing between the Y-Age partners and Gauteng economic development MEC Nkosiphendule Kolisile, who appeared to be "keen" to pick up the project.
It is understood that a new GEP board had questioned the rationale behind the public-private partnership. The GEP was seen to have outsourced its core mandate.
Mr Mashishi said Y-Age was on the verge of securing financial assistance from the private sector and that a major announcement was planned for June. There were plans to take the project to seven other provinces, he added.
GEP spokeswoman Mpho Shibambu on Thursday declined to provide reasons for why the funding had halted. She said matters discussed by the GEP board were confidential.
"Decisions taken at that level are always in the best interest of the organisation and good corporate governance," she said.
Ms Shibambu said that GEP and its partners on the youth entrepreneurship programme had agreed to an "amicable termination" and had both undertaken to maintain confidentiality on the details of their discussions.