Charged with the responsibility of entrepreneurship and enterprise development, the Local Enterprise Authority (LEA) is shockingly spending more on none-core activities than on its core mandate.
The shocking revelations are contained in the parastatals 2010/11 Annual Report where none-core activities gobbled a whooping P84.2 million against core activities’ meagre P2.2 million. The authority ran an operating deficit of P2.4 million in the year under review compared to a surplus of P5.1 million the preceding year.
In what amounts to a gravy train, the authority spent P75 million on salaries and wages to a staff compliment of 309 with a breakdown of P4.9 million being remuneration paid to senior management. Salaries and wages for general staff swallowed up P71 million.
In the year under review, remuneration to senior management increased from P4.1 million in the previous year to P4.9 million.
Salaries increased by almost P7 million to P71 million from P64.3 million.
The figure on staff costs ballooned to P78.6 million on inclusion of pension and staff gratuity costs, representing a solid P6 million increase┬áover the previous year.
The Authority also ran a telephone, mobile and fax bill of P5.3 million.
Only P404 000 was recovered.
A further┬áP3.9 million was gobbled in business travel, accommodation and allowances against P2.1 million used in the previous reporting period.
Board meeting expenses increased to P509, 253 in the year under review┬áfrom P535, 822 in 2009/10 financial year.
In┬áa bizarre turn of events, a paltry P2.2 million was used for training and mentoring in addition to research costs of P220, 936.
Seminars, retreat and conferences attracted P1.6 million in the year, a reduction from P6.9 million in the preceding year.
With a staff compliment of 309, the authority assisted 609 clients in the year translating into a painful reality that for the whole year one LEA employee trained two people on average.
Responding to Sunday Standard enquiries on whether the authority was satisfied with its delivery rate, LEA Communications Manager, Nyaladzi Kutjwe, said the authority is a developmental agency of government that should take a long term view with respect to preparing the ground work for opening up various sectors of the economy to ensure SMMEs are able to partake in exploiting the opportunities within those sectors.
“It is, therefore, not as simple as taking a short term view that current statistics with respect to current clients as the only business of LEA. The extremely laborious and taxing work done by our research division in terms of looking at and analyzing the value chains within certain sectors, in preparation for future entrance by SMMEs in those sectors is critical and should not be overlooked,” said Kutjwe in reference to the focus strategy that is geared to reviving the country’s declining agricultural sector.
She explained that the 609 clients referred to those “who have received various interventions which have brought them to a level where continuous records can be obtained on their level of growth,” adding that the figure does not include those that are pre-start-ups nor does it include those who are still receiving interventions to bring them to a level where LEA can report on their turnover.
Kutjwe maintained that capacitating SMMEs through business training is part of LEA’s core business and, during the year under review, 1064 clients received training in various business skills while the authority participated in 95 outreach activities across the country to raise awareness on entrepreneurship to the masses of Batswana in their various settlements.
Defending the huge telephone bill, she said the authority has a branch network of 13 locations whereby communication internally is crucial for business operations in addition to the four incubators whose resource centres’ internet services is subsidized throughout the 17 locations.
On whether staff salaries matched delivery rate, the communications manager said the P75 million converted to an average P242 000 per annum per staff member (a salary of about P20 000 per employee per┬ámonth) which in LEA’s view is┬á“below the market rate of similar organizations”.
The authority is also plagued with a high rate of staff turnover which Kutjwe has attributed to “non-competitive salaries”.
Asked whether it would┬á be a misplaced conclusion to say that LEA is spending more on none-core activities vis-├á-vis core activities, Kutjwe maintained that would certainly be a misplaced conception as all activities of the authority are aligned with the mandate of promoting entrepreneurship and SMME development.
She maintained that the authority’s services have a major cost implication to deliver the organizational mandate that includes providing business development services through screening, business plan facilitation, training and mentoring.
The mandate also includes conducting research to identify business opportunities for existing and future SMMEs as well as promoting domestic and international linkages between SMME and government, large business entities and other SMMEs, including initiatives such as the annual Botswana SMME Conference and Fair, among other subsidized fairs, with LEA facilitating participation of local SMMEs.
The authority further facilitates changes in regulations, quality management systems and standards, infrastructure and access to finance as well as the development of incubation programmes to facilitate technology adoption and diffusion.
Since inception, LEA has screened a total of 10 967 clients in addition to capacitating 6 101 entrepreneurs through various business skills, training as well as facilitating access to finance through submission of 916 business plans amounting to P806.4 million.
The Minister of Trade and Industry Dorcas Makgato-Malesu┬ádeclined to comment. LEA falls under her ministerial portfolio.
Her private secretary,┬áTshepiso Letshwiti,┬ásaid the Minister had told him that she was not in a position to comment.