Small Business Development Minister Stella Ndabeni cautioned local spaza shop owners who are fronting for foreigners.
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The Minister of Small Business Development, Stella Ndabeni, has threatened to withdraw funding for spaza shops after many locals applied and handed shops back to foreigners.
Speaking at the South Africa Funeral Practitioners Association international conference in Durban on Tuesday, Ndabeni revealed that in the first phase of disbursement of R500 million that was set aside to support the township and rural economy, the government discovered that there were locals who fronted for foreigners.
She said that her department set aside R150 million, while R350 million came from the Trade and Industry Department (DTI); however, the government was disappointed when it discovered that locals applied for funding only to hand over spaza shops to foreigners.
She warned that as her department rolls out the second phase of the disbursement, she would ensure that those locals who front for foreigners do not get funding, saying her department would strictly scrutinise every application to ensure the funding is going to the correct person.
She further stated that there would be follow-ups and inspections of spaza shops that received funding to see who is running them.
“We appeal to locals to stop applying for funding for their spaza shops and handing them over to foreigners. This undermines the country’s efforts to grow the local economy and uplift locally owned businesses. There are no visas for spaza shops and if we discover that the practice continues, we will not hesitate to withhold funding.,”
She also stated that the R150 million from her department is for stock, while R350 million from DTI is for infrastructure, adding that half of the funding has already been disbursed, with KwaZulu-Natal and Mpumalanga emerging as the biggest beneficiaries.
Ndabeni also defended locals for demanding the closure of foreign-owned spaza shops, saying that it was not informed by xenophobia but by unfair trade practices, as there are no visas for foreigners to come here and open spaza shops. It has been reported that many foreigners come through with tourist visas, then convert them to asylum and end up opening businesses.
In response to that, Ndabeni said her department has introduced a Bill in Parliament that seeks to reserve certain sectors of the economy for locals, such as spaza shops.
Furthermore, she promised to assist the burial industry and other small businesses by dealing with red tape that comes with compliance mechanisms from departments such as Home Affairs, Health, and municipalities.
While assisting with the reduction of red tape, she urged small businesses, when new legislation affecting them is being drafted, to participate in public hearings.
She explained that these red tapes they encounter after a Bill has been passed into Act would have been prevented had they submitted their input to the responsible parliamentary committee.
The four-day conference ends on Wednesday.