Progress with spaza shops registration & DSBD support; Red Tape Reduction Strategy

Video The Portfolio Committee met to receive briefings from the Department of Small Business Development (DSBD) on the Spaza Shop Support Fund (SSSF) and the Red Tape Reduction Framework. It was informed that the SSSF, a joint initiative between the DSBD and the Department of Trade, Industry and Competition, aimed to assist township and rural spaza shop owners through financial and non-financial support, training, and compliance facilitation. By late October, over 2 500 applications had been received, with nearly half from women and over a quarter from youth. Infrastructure upgrades, stock procurement and accredited training, formed part of the support package. However, several challenges had been encountered, including inconsistent municipal regulations, licensing delays, and zoning complications. The Department outlined plans to simplify municipal processes, enhance coordination with provincial departments, and establish liaison units to expedite compliance and disbursement. It emphasised that the initiative’s developmental approach aimed to formalise township enterprises and strengthen local economic participation. The Department presented its conceptual framework for reducing red tape, which sought to streamline business registration, licensing, and regulatory processes across government levels. The framework was aligned with international benchmarks such as those of the World Trade Organisation and the Organisation for Economic Cooperation and Development. It was intended to simplify and automate procedures while enhancing accountability. It stated that 26 pieces of legislation had been identified for review, with implementation to be coordinated nationally, provincially, and municipally. The framework would involve signing memoranda of understanding with provinces, creating inter-provincial task teams, and training public officials to manage red tape effectively. The Department confirmed that discussions were underway with the Presidency to determine the governance structure for the initiative, and that a monitoring dashboard and scorecards would be developed to measure progress and ensure oversight. During the discussion, Members expressed broad support for the initiatives, but questioned the distribution of spaza shop applications by province, the adequacy of the R10 500 grant, and whether mechanisms were in place to prevent the misuse of funds. They also highlighted issues of municipal inefficiency, lack of health inspectors, and inconsistent licensing practices. They requested that the Department strengthen collaboration with municipalities to regularise spaza shop operations, assist with zoning compliance, and accelerate permit approvals. Some Members expressed concern about delays in the disbursement process, suggesting that bureaucracy and lack of capacity continued to undermine progress. Calls were made for transparent turnaround times, digitised systems, and stronger consequence management for non-compliance. The Committee also discussed the extent to which the Fund supported new entrants versus existing shop owners. It was clarified that while the Fund primarily targeted existing spaza shops, it also accommodated aspiring entrepreneurs who demonstrated readiness to comply with regulations. Members also queried how the Red Tape Reduction Framework would translate into measurable change, stressing that previous initiatives had yielded limited practical results. Concerns were raised about the long implementation timelines and the need for enforceable performance indicators. The Department assured Members that efforts were underway to accelerate progress and to collaborate with the House of Traditional Leaders to enhance community-level implementation. Concluding the meeting, the Department reaffirmed its commitment to ensuring that only South African citizens benefited from the Fund -- foreign nationals were included in licensing for regulatory compliance, but not for financial support. The Small Enterprise Development Funding Agency (SEDFA) pledged to continue working with the Department and municipalities to remove bottlenecks, standardise licensing fees, and strengthen post-investment monitoring to evaluate impact. The Committee commended the Department’s efforts but called for accelerated action, improved communication with applicants, and more visible progress on regulatory reform and fund delivery.