Changes to South Africa’s preferential procurement regulations, which take effect on April 1, will open a R150-billion opportunity for small businesses and cooperatives, Small Business Development Minister Lindiwe Zulu has acknowledged.

The Minister revealed the figure during an Economic Sectors, Employment and Infrastructure Development Cluster briefing in Cape Town on Tuesday, at which she also made conciliatory overtures towards Finance Minister Pravin Gordhan and the National Treasury, despite expressing discomfort at the “haircut” given to her department in the Budget. Zulu was conspicuous in not participating in the standing ovation given to Gordhan during his February 22 Budget speech to Parliament.

“When there isn’t enough money in the kitty, we can’t behave like a bull in a china shop,” she said, but indicated that the cuts were particularly hard for a new department to bear. “[However] as a department we are confident that we can try and use, optimally, the budget that we have received.”

Zulu added that the departmental budget was also but one resource that could be deployed in support of small and medium enterprises.

“The fact that we’ve got this 30% procurement is what we need to chase particularly,” Zulu said, referring to the stipulation in the new regulations for compulsory subcontracting to “designated groups” of at least 30% for tenders above R30-million.

Cluster chairperson Gugile Nkwinti, who is also Rural Development and Land Reform Minister, stressed that small business development was a focal area of the Nine-Point Plan, which aimed to remove regulatory constraints and assist small firms “through 30% of State procurement”.

Asked how her department was preparing for the opportunity created by the set-asides, Zulu said Small Business Development would be leaning on other departments to assist with implementation. However, specific areas were being targeted for initial implementation, notably the construction sector, as well as programmes associated with Operation Phakisa.

“Obviously it’s not going to be an easy thing, because the small and medium-sized enterprises and cooperatives themselves have to be ready for this, [although] I know that many are ready . . . they have been waiting for this for a very long time.”

Nevertheless, a lot of work was required to align all of government to the changed rules. “Our responsibility as a department – other than looking at the legislative environment, the regulations and the coordination between the three spheres of government – is too look into all budgets and see what is in there for small and medium enterprises.”