MEDIA STATEMENT
Johannesburg, Sunday, 17 November 2024 - The Institute of Chartered Entrepreneurs (IoCE) expresses grave concern over President Cyril Ramaphosa’s hasty directive to close and re-register non-compliant spaza shops across South Africa within an impractical 21-day timeframe. While we acknowledge the devastating loss of life due to recent food poisoning incidents, we firmly believe this intervention lacks the nuanced planning required to address the crisis effectively.
South Africa’s informal economy, particularly spaza shops, sustains millions of livelihoods and serves as a vital access point for essential goods in underprivileged communities. A blanket approach to close or re-register these establishments will have catastrophic implications:
Impact on Small Businesses:
Many spaza shop owners operate with perishable stock and have rental obligations. Immediate closure leaves these businesses vulnerable to irrecoverable financial losses, further exacerbating unemployment and poverty.
2. Unrealistic Timeframe:
With over 1,000 spaza shops in Soweto alone and thousands more nationwide, it is unreasonable to expect local authorities, which are already overstretched, to inspect, re-register, and assist businesses within 21 days. The capacity constraints acknowledged by the President himself further highlight the lack of feasibility in this directive.
3. Lack of Consultation:
The government failed to meaningfully engage with key stakeholders, including the informal sector, industry associations, and community leaders, before announcing this drastic measure. Collaborative consultation could have yielded practical, long-term solutions to safeguard public health while protecting small businesses.
4. Unaddressed Compliance Support:
No clarity has been provided on how affected traders can access resources or assistance to meet compliance standards. This lack of guidance leaves informal traders in limbo and heightens the risk of non-compliance by necessity.
The IoCE recognises the urgent need for interventions to prevent further tragedies, particularly the poisoning deaths of children, but emphasises that knee-jerk decisions can do more harm than good. Addressing systemic issues in the informal trading sector requires deliberate and well-thought-out measures, such as:
Phased Implementation: Re-register spaza shops over an extended period with targeted support programs for compliance and education on food safety.
Capacity Building: Strengthen local municipalities and health inspectorates to enforce food safety regulations effectively.
Stakeholder Collaboration: Involve informal traders, industry bodies, and communities in crafting solutions that are practical and sustainable.
Immediate Hazard Controls: Focus on removing hazardous chemicals like Terbufos from circulation and cracking down on their illegal distribution.
"We urge President Ramaphosa to reconsider the directive and engage with the small business sector to co-develop a balanced and enduring plan that prioritises both public health and economic sustainability. The IoCE also supports various calls by role players for resources and capacitation to ensure successful implementation of necessary reforms," says Tebogo Khaas, IoCE .Global Chief Entrepreneur.
South Africa cannot afford to further destabilise its informal economy through ill-conceived policies. We must unite in addressing this tragedy with reasoned, inclusive, and achievable solutions.
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