Transitioning spaza shops to formal businesses will boost growth, sustainability .

By Staff Writer

Small Business Development Minister Stella Ndabeni-Abrahams. Photo:GCIS

• The government has major plans to overhaul the "spaza shop sector".

• The Department of Small Business Development wants to develop norms,

• standards, and a common business licensing framework for spaza shop owners.

• Small Business Development Minister Stella Ndabeni-Abrahams says a transition from informal to formal business will allow spaza shop owners to gain access to opportunities for growth.

Plans are afoot to amend legislation to provide norms, standards, and a common business licensing framework for spaza shop owners.

In a bid to overhaul spaza shops, the Department of Small Business Development is assisting informal spaza shops with company registration and compliance with tax and labour legislation.

This emerged in Small Business Development Minister Stella Ndabeni-Abrahams' reply to a written parliamentary question, recently.

EFF MP Babalwa Mathulelwa asked Ndabeni-Abrahams about the government's support of small township businesses.

According to Ndabeni-Abrahams, the Spaza Shop Support Programme was aimed at value chain development within the retail space of spaza shops that South Africans owned.

The Small Enterprise Development Agency (Seda) and Small Enterprise Finance Agency (Sefa) are partners in implementing the programme.

She said:

This includes the concurrent linking up of beneficiaries with wholesalers, bulk buying arrangements done through South African Spaza Support Associations, access to SMME products at wholesalers by South African-owned spaza shops through localisation efforts of the department and its entities as well as the formalisation and strengthening of these South African-owned spaza shops by working with municipalities and the banking sector.

Ndabeni-Abrahams added the department had facilitated the participation of relevant public sector and private sector role players in the development and strengthening of spaza shops.

"The department is reviewing the Businesses Act No.71 of 1991 with the intention of amending the legislation to provide for norms and standards, a common business licensing framework and better protection for South African informal traders, including spaza shops.

"In addition, the department is assisting with the transitioning of informal spaza shops to formality by providing assistance with regulatory requirements and instruments such as company registration and compliance with tax and labour legislation through Seda.

"This transition allows South African spaza shops to gain access to opportunities for growth and sustainability within the mainstream economy as described under the first point above," she said.

Furthermore, by 31 March 2022, non-financial support was provided to 10 574 spaza shops, and R36.9 million was disbursed in funding to 5 907 spaza shops facilitating 6 633 jobs.

"Through all these efforts, the department can capture and record South African spaza shops into a single database that allows the state to monitor and regulate the trends within the retail space that is occupied by spaza shops while at the same time providing support to South African spaza shops," Ndabeni-Abrahams said.

Source: News24.com