daniel chigunweGovernment’s insistence that spaza shops across the country register their businesses — ostensibly to raise food safety standards following a number of deaths from tainted food — could end up stifling entrepreneurship among the poor.
There are reckoned to be between 150 000 and 200 000 spaza shops in SA, posing a massive administrative challenge for metros and municipalities. Gauteng Finance and Economic Development MEC Lebogang Maile says this amounts to the largest registration drive since the democratic elections in 1994.
John de Wit, co-founder of the Small Enterprise Foundation (SEF), which supports roughly 180 000 micro entrepreneurs with loans and training, says: “We are concerned about these registration requirements and are very afraid that this will be throwing low income entrepreneurs into the hands of authorities looking for bribes.
“Bribes for registration and further bribes from enforcement agencies,” he adds.
“Further, requirements for registration and the related bureaucracy and corruption that will go with it, will be a further disincentive to entrepreneurship.”
A similar registration drive was attempted during Covid, when small-scale entrepreneurs were offered government loans on easy terms provided they registered their businesses with the local municipality.
On that occasion, just 12 percent of entrepreneurs surveyed by the SEF took the bait.
The vast majority decided they would rather remain under the formal sector radar than fall under scrutiny from an alphabet soup of agencies – such as the South African Revenue Service (Sars) and the Companies and Intellectual Property Commission (CIPC).
It is clear that roping these informal operators into the formal sector is a long-standing goal of a government eager to collect more taxes.
The food safety issue provided the ideal opportunity to push through these plans. — Moneyweb
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