Business News 27.10.2016 05:04 pm

Red tape kills economy – Mashatile

Paul Mashatile. File Picture: Tracy Lee Stark

Paul Mashatile. File Picture: Tracy Lee Stark

Mashatile’s statement follows the backdrop of new guidelines by the dti to reduce red tape at municipal level to ensure the growth of small and medium enterprises.

The government red tape, including overregulation and poorly drafted and implemented legislation, is killing the country’s economy because it scares investors and contributes to high unemployment.

This was the view of Gauteng MEC for cooperative governance and traditional affairs Paul Mashatile, who was speaking during a study tour to Kenya and Rwanda. He was accompanied by his economic development counterpart, Lebogang Maile.

“The red tape, whether real or perceived, in the form of overregulation, poorly drafted legislation and the poor implementation thereof, has acted as a constraint to business growth and investment. It has hobbled enterprises and has even increased the already high levels of unemployment,” he said.

The MEC said red tape came in different ways, such as when applying for a building plan approval or an environmental impact assessment, for instance.

Also read: Red tape hampering African trade – Davies

“It is the GPG view that the processes and procedures for applying for approvals should not be unduly complicated and the turnaround time should be as short as possible. Tedious approval processes and procedures have an effect of disincentives investment as potential investors look elsewhere when confronted with red tape,” he said.

Mashatile’s statement comes against the backdrop of new guidelines produced by the department of trade and industry (dti) to reduce red tape at municipal level to ensure the growth of small and medium enterprises. Dti Minister Rob Davies said reducing the regulatory constraints on SMMEs was a key focus area of the government.

Mashatile said government administrative process were seen as complex, slow and inefficient and, therefore, compromising its ability to speedily deliver services. “It is, therefore, critical that government creates a conducive environment for reduced cost of doing business by eradicating practices, regulations and laws that create red tape and bureaucracy,” he said.

The study trip to both Kenya and is aimed at learning more from the two countries about how to deal with red tape so as to provide a better environment conducive to business growth, investment and job creation and to find solution to the problem.

– ericn@citizen.co.za

 

 

 

 

 

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