Bill limits foreigners from doing business in Gauteng townships.

Foreign nationals living in Gauteng will now be barred by law from doing business in the province’s townships unless they obtain permanent residency status. SA’s economic hub has moved to pass a law that makes it illegal for foreign nationals to run certain formal and informal businesses in the townships. This comes after the provincial government published the Gauteng Township Economic Development Draft Bill which seeks to ban foreigners from operating certain businesses in the townships in September this year.

The new law, drafted by the Gauteng Economic Development Department and Premier David Makhura’s policy unit, reserves certain economic activities in townships for South African citizens and people with permanent residency status. In February, during the state of the province address (Sopa), Makhura said the provincial government would introduce the bill in June this year. “This new law will nullify all bylaws that make it difficult for township businesses to operate. It will nullify all bylaws that frustrate and suppress the growth and operations of SMMEs and the informal sector,” he said. “It will also nullify the tendency for the law enforcement agencies to harass small businesses in our communities, including in the CBDs, especially those that need support to be able to observe the law.” However, the law will only assist township-based enterprises in agriculture, construction, manufacturing, transport, communications, tourism and services if they are owned by South African citizens or holders of permanent residency status.

Permanent residency is obtained by foreign nationals who have been residing in the country on the basis of their work permits for a minimum of five years, their spouses and the dependents of South African citizens/permanent residence permit holders. It can also be obtained by foreign nationals who intend to establish a business in the country and are financially independent, among other criteria. Gauteng is currently home to the highest number of foreigners in the country. According to the draft bill, there is a percentage of provincial government procurement set aside for township-based enterprises. The law also establishes specific procurement rules and programmatic support to allow the government and its main contractors to buy from a large group or groups of township-based enterprises. The government’s contractors will now be compelled to spend a certain percentage of their procurement budgets on township-based enterprises, entrepreneurs and co-operatives.