We can move informal business forward

2015-02-01 15:00

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The tragic events of the past fortnight have again thrown the challenges confronting informal businesses into the public eye.

The loss of life and destruction of property that accompanied the tension between locals and foreign national-owned businesses touched the collective conscience of our nation. Beyond the screaming headlines, painful footage, accusations and counteraccusations, our collective responsibility is to address the root causes of the tension.

Let me register my unconditional condemnation of the violence and acts of criminality directed at foreign national-owned businesses. This was inconsistent with our ubuntu ethos and Constitution. I commend the police and local government for doing their best to deal with a difficult and volatile situation.

We remain confident our law enforcement agencies will leave no stone unturned in their quest to save lives and property, and restore calm and stability in affected areas. As government, we proceed from the premise that all people living in South Africa, including foreigners, are entitled to the full protection of our law.

In terms of our Constitution, asylum seekers and refugees may establish and conduct businesses in South Africa. Foreigners are also subject to the same taxes and levies as South Africans.

Now the critical questions we must pose are: How did we arrive at this and what is to be done?

I believe we should get to the root cause, and look at past interventions and lessons learnt, as this is not the first time shops have been at the receiving end of violence, looting and anarchy. Besides studying the past, we believe there is a need for focused and structured engagements with local communities, including the organised formations of foreigners running small businesses.

We believe it is important to have integrated and coordinated interventions agreed upon by all spheres of government.

The small business development department, specifically, in addition to developing interrelated interventions, has a strategy born out of robust consultation with all provinces. The National Informal Business Upliftment Strategy (Nibus) is one key intervention to informal businesses. This strategy is anchored on three key pillars: skills development among South Africans, exploring partnerships between locals and foreign traders, and reviewing South Africa’s policies and regulations.

Build the capacity of local traders

The strategy proposes that government and local stakeholders build the capacity of local traders so they can become competitive through skills development, bulk and collective buying, infrastructure support (such as warehouses for storage and distribution networks), technology and more.

Already, my department – in partnership with the wholesale and retail sector education and training authority – is piloting an informal trader upliftment project targeting 1 000 informal retailers (street traders, spaza shops and some general dealers) to support them with skills development and infrastructure support.

Recruitment is currently taking place through the project management office. The massification of this programme is key to averting problems in future.

Let’s learn from foreign nationals

Some foreign nationals have been here for a long time and have families. South Africa is their home. We need to explore partnerships between South African and foreign business owners. Our local informal traders can benefit from the business experience, knowledge and skills of their foreign counterparts.

I am confident foreign traders will be willing to share their business experience and knowledge.

Develop policies and regulations

Among other things, this entails looking at bylaws and red tape reduction. We will have to review policy to enable market access and the proper registration of businesses.

During the consultation process for Nibus, we were reminded that other countries, such as Ghana and Malaysia, have laws that designate certain business activities – such as small retail shops, filling stations and saloons – to only be conducted by locals. This is critical, as it assists locals to create sustainable livelihoods.

I am determined to fast-track the implementation of Nibus as part of addressing the concerns and challenges that confront the informal business sector. This is why I have established a task team to examine the root causes of the problem, to identify and assess the performance of past initiatives, and the extent to which related recommendations were executed by government and nongovernment actors.

The team will advise me on the potential for joint implementation of programmatic responses in an attempt to create and sustain conducive and harmonised conditions for conducting sustainable small business activities.

Consistent with my view that only a multisectoral response can deliver a lasting solution, the task team will be constituted by all relevant government departments and institutions.

Only the department of home affairs and the SA Police Service have the legal authority to verify the legality of a foreigner’s presence in the country and his or her eligibility to conduct business. Only the municipalities, the SA Revenue Service (Sars), the department of labour and other government agencies are allowed to monitor and sanction businesses for compliance with licensing, health and safety, labour regulations and other statutory requirements. Only Sars can pronounce on whether a particular business establishment complies with tax laws or not. Only law enforcement agencies can deal with allegations of wrongdoing and illegal activities on the part of any business, foreign or local.

We appeal to our communities to allow our mandated state agencies the space to address the situation correctly.

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