The announcement of a R500 million joint fund to support township and rural businesses is a game-changer. As someone who has seen the struggles faced by small business owners in these areas, I believe this initiative could create the stability and growth they desperately need.
Minister of Justice and Constitutional Development, Thembi Simelane, shared details of the fund, which aims to support businesses like spaza shops with infrastructure improvements, regulatory compliance, and capacity building. “In the short term, approved rural and township businesses will be supported through this fund to improve their infrastructure, regulatory compliance and capacity building,” she explained.
This work is already underway, with departments tasked with drafting the fund’s operating procedures and accountability guidelines. “The operational fund application and disbursement process will commence as soon as the registration process is completed and will be subjected to ongoing auditing processes as an early warning system against potential anomalies and fraudulent activities,” Simelane added.
WHO QUALIFIES FOR THE FUND?
The eligibility criteria for accessing the fund have been clearly outlined. “To qualify for the fund, a business owner must, among others, be a South African citizen operating within the borders of the country and serving local communities,” said the Minister.
Additionally, businesses must meet these requirements:
- Be registered with the local municipality under relevant by-laws.
- Hold valid registration with SARS.
- Be owned by entrepreneurs aged 18 to 35, with special emphasis on female-owned businesses.
To streamline the process and strengthen regulatory oversight, the Department of Small Business Development is establishing a nerve centre with geo-mapping capacity. “A national database of registered small businesses and spaza shops will strengthen our capacity to regulate the sector and to ensure effective compliance to avoid the recurrence of future outbreaks,” Simelane explained.
TACKLING FRAUD AND ILLEGALITIES
Despite the optimism, the announcement also shed light on troubling practices undermining the sector. Since President Cyril Ramaphosa called for all spaza shops to register within 21 days, there have been reports of illegal activity. These include South Africans registering businesses on behalf of undocumented foreign nationals.
“This is clear fronting, and we would like to warn everyone who is involved in this illegal activity to stop,” Simelane said firmly. She also highlighted legal obligations for landlords: “Landlords are obliged by law to ensure that those who rent their premises to conduct businesses, comply with the provisions of the Immigration Act and the standard by-laws regulating local business in the municipalities in which they operate.”
Civil servants engaging in fraudulent registration processes are also under scrutiny. “The law would take its course,” she warned, urging the public to report corruption through the National Anti-Corruption Hotline: 0800 701 701.
Simelane further cautioned against unlawful inspections or interference in the registration process. “We want to appeal to the members of the public not to disturb the process of registration by blocking certain shop owners from participating in the process. This includes conducting unlawful inspections by members of the public, and other unauthorised bodies,” she said.
A NEW ERA FOR SMALL BUSINESSES
Township and rural businesses are a cornerstone of South Africa’s economy, providing goods, services, and jobs to millions. According to the Small Business Institute, 98.5% of the country’s economy consists of small to medium-sized enterprises, yet they contribute only 28% to GDP due to systemic challenges.
Minister Simelane’s closing remarks reinforced the government’s commitment to creating a supportive environment for these businesses. “In processing these applications for registration, the government will make every effort to ensure that account is taken of every legal prescript that allows people to do business in the country,” she said.
I’ve seen firsthand the potential that lies within township and rural enterprises. With better infrastructure and regulatory compliance, these businesses can flourish, bringing much-needed economic growth and job creation to their communities.
Let’s all rally behind this initiative and ensure the fund reaches those who need it most. It’s more than just financial support – it’s an opportunity to transform the entrepreneurial landscape of South Africa.