In a statement released on Tuesday, the Presidency explained that government guidelines about aid to struggling businesses would be determined according to demographic criteria including race, age, gender and disability.
A fund has been set up to help the tourism and hospitality sector, which will not be able to operate during the 21-day lockdown that kicks off at the start of Friday.
The affected sectors include accommodation, travel and hospitality. Businesses to be aided should not have a turnover of more than R2.5 million, have good tax records, show compliance with labour law, be at least a year old, make financial records available, and provide other info as required.
All provinces would benefit equitably, and more than two-thirds of the beneficiary enterprises (70%) would have to be black-owned.
Half would have to be owned by women.
At least 30% would have to be youth-owned, and 4% by people with disabilities.
The tourism department called on travellers not to cancel their planned trips to and around South Africa, but to simply rather postpone them for when the anti-contagion lockdown is lifted.
— Presidency | South Africa ???????? (@PresidencyZA) March 24, 2020
Meanwhile, in a statement on Tuesday evening, the civil rights organisation AfriForum said they had placed the minister and the department of small business development “on terms” to give them a written undertaking that “race would in no way play any role in the provision of aid to businesses that apply to government for relief as a result of the Covid-19 pandemic”.
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. The department subsequently said that such a requirement was “fake news”.
The website does, however, ask applicants to input the racial, gender, age and disability information related to their enterprises and the department said on Tuesday that such factors would play a role in how funding was dispensed.
The department of small business development’s spokesperson, Sarah Mokwebo, told The Citizen on Tuesday morning that it was not true that businesses would need to be 51% black owned to qualify. Minister of Small Business Development Khumbudzo Ntshavheni also said at Tuesday’s interministerial briefing that all businesses would be considered, though demographic and provincial factors would play a role – similar to what Tourism Minister Mmamoloko Kubayi-Ngubane has said in her department.
AfriForum on Tuesday evening took issue with the fact that relief would be provided on the basis of such demographic and geographic representation.
AfriForum CEO Kallie Kriel argued that “demographic representivity” could be considered “a codeword the government uses in an attempt to justify racial discrimination against minorities”.
Kriel added that it was “strange” that public concern over the government’s use of race had been downplayed as “fake news” by the minister, especially since the department itself had admitted the draft, leaked document from which this concern had stemmed had come from the department.
“Furthermore, it is also clear on the webpage where businesses can apply for aid that businesses must indicate their BEE [black economic empowerment]-status.
“In times of a crisis such as now where everyone has to fight together against a common enemy, the coronavirus, it is immoral that government is in any way considering to abuse the situation to push their racial ideologies,” said Kriel.
AfriForum requested that the minister give them written confirmation by 4.30pm on Wednesday that “government would not persist in its intention to discriminate against applicants based on race”.
“Should the department not heed this request, AfriForum intends on bringing an urgent court application against the minister and the department.”
Similarly, the DA on Tuesday welcomed the apparent rejection by government of the “absurd proposal” by the department to link SMME-funding during the national lockdown to race-based ownership.
“This is why the DA wrote to Minister Patel on 20 March 2019 to encourage him to put a moratorium on BEE requirements linked to funding and incentives because it would effectively miss 93% of all businesses who are BEE exempt and do not require black ownership,” said Macpherson.
“The DA is absolutely clear that funding must go to businesses who need it and who will keep people employed, regardless of the race, sex or geographical location of the business. The stakes are too high to be playing ‘battleships’ political ideology when so many jobs depend on quick and easy access to funding.”
The DA called for the website to the funding application to urgently be urgently taken down as it contained questions around race and sex which were “not relevant to the funding application and only serve to sow distrust and confusion”.
“It is quite clear that as we move closer to the national lockdown, government’s communication needs to step up a gear and dismiss fake news as it spreads but equally needs to rein in rogue officials who are putting mad suggestions like this forward in the first instance.”