Confirmed: Guideline that government will only help ‘51%-black-owned companies’ is fake

The government’s website set up to provide relief for small, to medium-sized and micro businesses went live on Tuesday morning and many applicants claimed to have run into the previously unpublicised requirement that in order to be granted state assistance a business would need to be majority black owned.

However, the department of small business development’s spokesperson, Sarah Mokwebo, confirmed to The Citizen on Tuesday morning that this was fake information.

Numerous people have been tweeting their outrage about the false fact, and civil rights organisation AfriForum even launched a campaign against what its CEO, Kallie Kriel, called a “racist policy”.

Their statement was written in Afrikaans.

#KORONAVIRUS / #COVID-19: ANC misbruik COVID-19 om rasse-agenda teen KMMO’s te dryf https://t.co/5MuyQZ53sF

— AfriForum (@afriforum) March 24, 2020

They claimed to have seen a document from the department listing requirements that businesses needed to meet before they would be eligible for financial assistance from government’s Covid-19 emergency fund, including that they should be 51% black owned.

However, it’s likely that AfriForum was fooled by the numerous faked screenshots that have been doing the rounds on Twitter and WhatsApp.

“One of these is that a business must be 51% black-owned to qualify,” said AfriForum – incorrectly.

AfriForum even threatened to head to court to fight the requirements, and they called for donations.

It was announced days ago that government would be assisting small businesses impacted by the coronavirus via a debt relief fund following President Cyril Ramaphosa declaring a state of national disaster in response to the Covid-19 global pandemic.

On Monday night, Ramaphosa announced more stringent measures, including a 21-day lockdown that would effectively make it more difficult or even impossible for the majority of businesses in the country to operate. Only people deemed essential would be allowed to move more freely.

The department of small business development said last week in a statement that it was finalising its SMME support intervention comprising of a Debt Relief Fund and a Business Growth/Resilience Facility.

“The Debt Relief Fund is aimed at providing relief on existing debts and repayments, to assist SMMEs during the period of the Covid-19 State of Disaster,” it said.

At the time, nothing was mentioned about black economic empowerment guidelines playing a part, and this has remained the case. People are, however, required to list their BEE and empowerment credentials through filling in various fields on the application site. It’s unclear how this information will be used.

“This facility will assist entities to acquire raw material, pay labour and other operational costs. All these interventions will be structured to match the patterns of the SMMEs’ cash flows, as well as the extent of the impact suffered,” said the department.

For small businesses to be eligible for assistance under the Debt Relief Fund they would have to demonstrate a direct link to the impact or potential impact of Covid-19 on their business operations.

“The department’s insistence on the use of the SMME database is based on the need to track, monitor and strengthen the impact of business development support to SMMEs by both government and the private sector during this period and beyond,” the department said last week.

It added that it would be guided by the National Command Council in determining the sectors deemed severely impacted, in order to qualify for the Debt Relief Fund.

The website has been experiencing some demand issues on Tuesday.

Good Morning,

Please note that the website https://t.co/OGk0DMfduO is currently experiencing technical difficulties, and our IT team is working on it. As soon as it’s resolved and back up we’ll let you know.

We apologize for this inconvenience.

— Department of Small Business Development (@DSBD_SA) March 24, 2020

In future, the database will also be used to apply for both financial and non-financial support, access information about business opportunities and market access support.