Progress on Spaza Shops funding, support and licensing; with the Minister

Video The Portfolio Committee met for a briefing by the Department of Small Business Development (DSBD) on progress on spaza shop funding, and by the Department of Cooperative Governance and Traditional Affairs (COGTA) on progress in the issuing of spaza shop licences. COGTA delivered a very brief update on progress they had made since their last meeting. The update consisted mainly of the number of spaza shops and traders that had received licences. A brief mention was made of the intervention undertaken by the Department to increase the issuing of licenses. COGTA also reported on the appointment of environmental health practitioners. Members indicated that they considered the report rather lean, and that it failed to address the details expected and agreed to in the previous meeting. Providing mostly a numerical report did not help Members to fully get to grips with what they needed to know. They criticised the lack of pace in issuing licences, and asked for more awareness campaigns. A key point that emerged was the need to migrate from manual to electronic systems for issuing licences, as manual systems also created opportunities for corrupt activities. Members expressed concern that foreigners used locals as proxies to apply for licences. COGTA responded that the Department understood the Members’ criticisms, and undertook to share a more detailed report soon after the meeting. The DSBD presented a detailed report on the Spaza Shop Support Fund. Its presentation included reference to how the Fund worked, as well as progress made with the number of beneficiaries reached until then. The Minister explained that the purpose of the Fund was to combat the spate of child deaths from food poisoning. It was aimed at infrastructural support and capacity building to render the informal traders compliant, which in turn would enable them to be licensed. Members were told that because this project was not a core competency of the DSBD, funding was derived from other programmes, and could be sustained for a period of only six months. Challenges were mostly about the lack of cooperation by municipalities. For this to change, the applicable laws needed to be reformed. The Constitution currently protects the municipalities and allows them to resist any instructions from the DSBD. An inter-ministerial task team had sat together to draft a plan, but thereafter these partners had failed to contribute the elements for which they were responsible. Members expressed disappointment at the pace of issuing licences, and wanted to know what was causing the bottlenecks. They also thought it paradoxical that the DSBD was calling for more applicants whilst their funding was rather limited.