Despite reported low numbers of applications, local spaza shop owners are crying foul and finding the going is getting tough with the alleged “unrealistic” requirements imposed by the government on the recently established R500 million Spaza Shop Support Fund (SSSF).

In April, the Minister of Small Business Stella Ndabeni Abrahams announced the support fund during a press briefing in Soweto, which called on eligible South African spaza shop owners in townships and rural areas who want to improve, expand, and sustain their shops to apply for assistance with the R500 million Spaza Shop Support Fund (SSSF). 

Some of the requirements for businesses include registration with the local municipality under the relevant by-laws and business licensing requirements. This is coupled with the optional registration with the Companies and Intellectual Property Commission (CIPC) for funding above R80,000 where registration with CIPC will be required within 6 months.

However, some spaza shop owners have lamented some of these requirements as exclusionary and cumbersome, with one spaza shop owner from Sebokeng, Cico Mokoena.

“I am one of the spaza shop owners facing tough compliance requirements imposed by the government.“

Jannie Morotolo, a Soweto-based architect, has shared Mokoena’s sentiments, saying after trying to help local spaza shop owners with their papers, he has found the process too complicated for most local business owners.

“Having been one of those trying to assist many spaza shop owners with compliance. The biggest deadlock is finance. Not a single one of the spaza shops can afford approximately R5k to get all the necessary compliance, let alone, most of them don’t even have registration documents, and most of them operate in rented spaces. One of the requirements dictates that they must acquire a letter of consent from the City of Joburg, which costs about R1,100,” she said.

In a statement, the leader of the African Transformation Movement (ATM) in Parliament, Vuyo Zungula, following his meeting with the leaders of the South African Spaza and Tuckshop  Association (SASTA) over the R500 million fund and recent presentation of the Tobacco Products and Electronic Delivery Systems Control Bill.

“We have met with SASTA to discuss the unrealistic requirements to access the R500 million Spaza Shop Support Fund and the Tobacco Bill that seeks to criminalise informal traders on making a living. We have committed to working closely with SASTA to ensure that their concerns are considered when Parliament finalises the Bill. The ATM will address a letter to deputy president, Paul Mashatile, to raise concerns about the failure of the Department of Health to consult spaza shops in finalising the SEIAS report on the Bill,” stated Zungula.

However, reacting to the outcry, Benji Seitlhamo, acting director for Economic Development Facilitation Department in City of Johannesburg, denied the accusations, saying the processes have been made easy despite a low application rate due to failure by local business owners to comply with the requirements.

“It is not true that the process is complicated. The process is easy, but is being made difficult due to the failure by owners who are not compliant. The city enforcing its bylaws and owners going back to being compliant would seem or be regarded as complex and frustrating. If they had been compliant previously, this would not be the case….The requirements are easy if you have a draft plan from the architecture. We prefer this as it is easy to get compliant. Once this is done, you take this plan to the city’s department of development planning for them to approve the plan,” he stated.

On the number of approved spazashop owners, Seithlamo indicated that the numbers have been low due to the high level of failure to comply with the requirements to access funding. He revealed that the city has been conducting various workshops and engagements with spaza shop communities across the nine regions of the city.

“The Department of Small Business and Development and its agencies have given themselves 100 days to return to shop owners who register for funding. Obviously, because the sector is illegal,  the numbers are low. It is only 30 percent of the R500 million fund that has been distributed nationally, and that figure is even lower for the city of Johannesburg, as we have just over 100 applications so far. That is why there is no closing date for applications to access the fund,” he stated.

siyabonga.sithole@inl.co.za

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