Follow-up meeting on spaza shops' licences; DTIC on Red Tape Omnibus Bill; with Deputy Minister

Video The Portfolio Committee on Small Business Development convened a follow-up meeting to receive briefings from the Department of Cooperative Governance and Traditional Affairs (COGTA) and the Department of Trade, Industry and Competition (DTIC). COGTA briefed the Committee on the progress and challenges in regulating spaza shops, reporting that while over 82 000 licence applications had been submitted, only 15 000 had been approved. The Department attributed the low approval rate to manual processing systems at the municipal level, multi-departmental approval requirements, and a critical national shortage of environmental health practitioners. Committee Members expressed strong concern over the low success rate, questioning the effectiveness of the licensing system and its impact on South African-owned informal businesses. They also raised issues regarding the high proportion of approved applications for foreign nationals, and the need for better inter-departmental coordination and enforcement. The DTIC presented on several areas of policy overlap, informing the Committee that the interest rate threshold for developmental credit agreements was under review, and that the draft National Credit Act (NCA) Regulations had been withdrawn following significant public opposition. It also reported on the progress of the Omnibus Bill, aimed at reducing red tape and unlocking investment. It provided an update on the Transformation Fund, a strategic initiative designed to mobilise R100 billion to support historically disadvantaged enterprises. The DTIC, in collaboration with the Department of Small Business Development (DSBD), also briefed the Committee on the Spaza Shop Support Fund. It was reported that the R500 million fund had received 2 726 applications, with 390 approved to a value of R24.4 million. The departments acknowledged that the uptake had been slow, partly due to many spaza shops lacking business licences, and outlined measures to review the fund's criteria and assist owners with compliance. In the subsequent discussion, Members raised numerous concerns, including bureaucratic inefficiencies in fund management, high interest rates charged by micro-lenders, and the need to ensure that support funds directly benefited their intended recipients. The departments committed to providing detailed written responses to the issues raised, and emphasised their ongoing efforts to simplify processes and ensure effective support for small businesses. The Chairperson concluded by noting the need for further engagement, and requested that the written responses be submitted promptly.