Organisation Calls for Overhaul of Spaza Shop System in South Africa

• An advocacy group has called on the government to reform the country's spaza shop industry
• Count Me In Movement is concerned about the red tape the industry faces, which includes paying exorbitant fees for registration and compliance
• The movement also said that the industry was dominated by illegal foreigners, who are making it difficult for locals to operate businesses in the sector

Tebogo Mokwena, a Briefly News journalist with 10 years of experience, offered valuable insights into South Africa’s business environment during his three years at Vutivi Business News.

JOHANNESBURG — The Count Me In Movement has called on the government to overhaul and reform the spazashop industry. They also believed that the sector is overrun by foreigners.

Lerato Pillay shared a statement the advocacy group posted on her @LeratoPillayZA X account. The group asked the Minister of Small Business Development, Stella Ndabeni, for the sector to be reformed, as the current condition of the sector makes it difficult for local business owners to access vital government support mechanisms.

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What struggles does the sector face?

Count Me In said that local business owners are wrestling with the proliferation of unregistered spaza shops operated by illegal foreign nationals. These foreign nationals are not subjected to the same regulatory scrutiny and inspections as legally-owned spaza shops, which creates an uneven and unfair playing field.

"Despite playing a critical role in township economies, many of these businesses remain locked out of the Spaza Shop Support Fund due to excessive compliance burdens, fragmented registration requirements, and systemic barriers in licensing processes," the movement said.

What other challenge does the sector face?

Count Me In noted that exorbitant licensing fees and multi-agency registration processes, digital exclusion and literacy barriers, rigid documentation requirements, and a lack of a one-stop government service centre in townships are some of the challenges spaza shops face.

What does Count Me In recommend?

The movement recommended that the Department of Small Business Development consider establishing streamlined one-stop compliance centers in every municipality. It also calls for mobile compliance support units to reach towns and rural areas, involving grassroots NGOs in advisory forums and pilot program implementation.

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Read the X statement here:

In April, the government launched a R500 million Spaza Shop Support Fund to boost local businesses. It aims to provide funding of up to R300,000 per shop by providing a blended grant and loan funding package.

However, the Black Business Council warned South Africans not to apply on behalf of foreigners for the fund. The council's deputy president, Gregory Mofokeng, spoke about the funds and said foreign nationals must not benefit from them.

What did South Africans say?

Netizens commenting on X agreed with Count Me In Movement.

The-Time-is-Now said:

"South Africans are subjected to stringent requirements to register their spaza shops, yet foreign nationals are not even registering their shops."

TruthPotent said:

"Connected people can swear it works, and have already been getting funds."

A Dog of War said:

"If this streamlined process can be one for spazas, it can be done for all SMMEs. My cost of compliance is crazy. Took me nearly a year to register a consignor bond with SARS."

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South African man shared R100,000 in government support

In a related article, Briefly News reported that a man shared information about a government initiative that provides up to R100,000 in business support. He said the initiative was the brainchild of various government departments.

The gent shared a video on TikTok breaking down the support initiative. He added that it gave blended financing with a loan and a grant component.

Source: Briefly News