Howard Barrell
A fresh crisis has struck the government’s attempts to promote small businesses – the key thrust in its strategy to reduce South Africa’s dangerously high rate of unemployment.
A revolt has broken out among staff members at Ntsika – the government agency tasked with promoting the provision of services to small businesses – against Kate Moloto, its chief executive. Some staff members have written to Minister of Trade and Industry Alec Erwin saying the agency is in a “continuous state of disarray”, questioning Moloto’s suitability for the job and calling for a “forensic audit”.
Alistair Ruiters, director general of trade and industry, confirmed on Wednesday that Erwin had received the letter, dated March 15 and signed by “Concerned Staff of Ntsika”.
Staff forwarded a copy of the letter, and several other documents suggesting a chaotic state of affairs at Ntsika, to the Mail & Guardian this week. Ntsika’s budget for 1998/1999 was R53,6-million, 89% of it taxpayers’ money from the Department of Trade and Industry.
One of the documents lists the findings of an inquiry, commissioned by Ntsika’s board last year, into high staff turnover since the agency’s establishment in 1995. The version of this report held by the M&G says turnover of staff over that period was almost 100%, and the average Ntsika employee remained with the agency for only 12 months.
Referring to the letter addressed to Erwin, Ruiters said: “We cannot ignore a letter like this. I have instructed the board of Ntsika to investigate the allegations made in the letter and to report back to me.
“I must now listen to what the other side might have to say. I cannot interfere with the integrity of the process.”
But Marcia Manong, the deputy chair of Ntsika’s board, said late on Wednesday night “the first time that the board … knew of the existence of this [letter]” was from the M&G. “There has been no instruction by Dr Ruiters to the board to deal with the matter,” she said.
She disputed claims by the M&G’s informants that a substantial portion of Ntsika’s senior and middle-ranking staff were in revolt against Moloto, saying this is “factually inaccurate”.
“There is no revolt at Ntsika, and we are not aware of most managers being against the chief executive. The letter alluded to is from Ntsika unnamed staff, not management. We also believe this could [come] only from a handful of staff and does not represent the general feeling of Ntsika staff,” Manong said.
The row is the latest in a string of problems to affect the government’s small- business development strategy.
In 1998, the government allowed the liquidation of the National Small Business Council, one of three pillars in its drive to foster an entrepreneurial culture. The council, a site of chronic leadership wrangles and allegations of financial mismanagement, owed debts of more than R600 000. It was supposed to give small business a voice in deciding government policy.
Ntsika, the second pillar, started life with a chief executive who resigned in 1996 after fraud allegations by her previous employer, the Swazi government. This paralysed Ntsika for months and a subsequent audit found evidence of fraud and mismanagement.
The third pillar, Khula, a wholesale financier whose funds are lent to small businesses through banks and NGOs, has made progress.
A report on Ntsika’s difficulties, drawn up last year by consultants Jay Pema & Associates, details the concerns of trade and industry and Ntsika’s board about the agency reporting late and inadequately on its activities. Pema & Associates said senior officials at trade and industry believe “Ntsika management is ineffective and that systems and controls are weak”. It added that “the future of Ntsika will be jeopardised” unless these problems are overcome.
Manong said the version of the report on staff turnover held by the M&G was only a “draft” that contained a number of “factual inaccuracies” since conceded by the consultant who wrote it.
She said the “latest and revised report”, which was not yet final, “concludes that the chief executive’s demands on staff are reasonable and justified”.
The M&G’s version speaks of “a general lack of confidence displayed by senior level management to managers and support staff” which has “seriously affected general motivation amongst staff”. It adds that “leadership skills are lacking at Ntsika”. It says staff display a “culture of entitlement”, “a mindset of cynicism” and “a breakdown in trust and commitment”. Managers are “not up to speed” when it comes to attending, arriving on time for and conducting meetings.
Manong said on Wednesday that Moloto had been chosen as chief executive “for her strong financial and organisational development experience, and none of the shortcomings can be attributed to her”.
The same version of the staffing report says many employees feel neglected by the board “until a crisis is identified”. It says the board is “not doing enough to … give confidence to employees”.
Manong said last year’s Pema report “on balance absolves the Ntsika board, chief executive and management of responsibility for problems Ntsika is experiencing”.
The Ntsika board is chaired by Mashudu Ramano, executive chair of two leading black empowerment vehicles, African Harvest and African Legend.
Moloto, a board member of the Land Bank, was employed at the Development Bank of Southern Africa before she became Ntsika’s chief executive officer.