Spaza shop draft bylaws ‘anti-growth’ in an ‘overregulated’ economy – FMF

The Free Market Foundation gave an honest rebuke of the new bylaws drafted to regulate the township economy.

Department of Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa gazetted the draft last week in wake of the crisis plaguing the small-scale traders.

Tension over the role of foreign business owners, the quality of food sold at spaza shops and the enforcement of existing laws, has escalated with every reported food poisoning case.

Non-compliance too easy

Minister Hlabisa’s draft bylaws are aimed at boosting the township economy, while placing a heavy emphasis on foreign ownership.

The proposed regulations mirror many of the existing bylaws but mandate municipalities to establish a task team to determine their own unique economic needs.

ALSO READ: New Cogta by-law draft allows limit on foreign spaza shop ownership

Free Market Foundation’s (FMF) Head of Policy Martin van Staden described the regulations as wishful thinking from a government out of touch with reality.

“There is already a legal framework that small township businesses are not complying with due to an overburdensome compliance cost,” Van Staden told The Citizen.

“Those township businesses will – for the good of the economy and the livelihoods of millions, but at the expense of respect for the law – continue to not comply with this intervention if adopted,” he explained.

Criminal law a preferred option

Civil rights movement Not In My Name said the crisis was akin to “chemical warfare” against the nation’s children, calling for the immediate closure of unregistered and non-compliant stores.

“Our townships have been plagued by a criminal syndicate of illegal spaza shops selling poisonous, expired goods, at the expense of hungry insecure communities,” the NGO stated.

They apportioned blame on the government for not having the political will to address the issue, while calling on activists to fill the void.

ALSO READ: Ramaphosa slams ‘unscrupulous’ spaza shop owners amid food poisoning crisis

Van Staden argued that the country has the legal capacity to send a message to businessowners through prosecuting those selling substandard food.

“South Africa has a fully developed criminal law that must be brought fully to bear on those culprits who either intentionally or by criminal negligence caused the deaths of the children,” he said.

Under the proposed bylaws, municipalities would have the power to limit foreign ownership of shops inside townships at their discretion.

“Introducing more anti-growth, moreover xenophobic, regulations into an already overregulated, low-growth economy, is obviously not the answer,” Van Staden stated.

Government – less is more

Tuckshops at schools have been ordered to close by the provincial government but DA Gauteng Shadow MEC for Education Sergio Dos Santos raised the issue of health inspectors in the province.

“We need answers on vacancies for health inspectors and why these remain vacant. [This] speaks directly to unsafe, unfit, or dangerous food, which is tragically killing children,” stated Dos Santos.

The FMF policy head suggested that government’s focus should be on lowering the cost of compliance, which he said were not compatible with the township economy.

“Informal businesses are not informal because they want to be, but because they have to be.

“The costs of formalisation, manifested in taxes and complying with all the hosts of standards and requirements evident in existing law and this proposed draft are too high,” said Van Staden.

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