Spaza shops ‘play key role’ and need more support – economists

The shenanigans surrounding spaza shops must be properly addressed because they play a crucial role in the informal economy, according to experts.

Recently, residents nationwide demanded that foreign-owned spaza shops be closed following the deaths of 24 children, while more than 800 were hospitalised after they reportedly consumed food bought at the shops. In reaction, President Cyril Ramaphosa called on all spaza shops operating to be registered to make their monitoring and regulation easy.

Spaza shops create jobs, help communities

In an interview with Saturday Citizen, University of Johannesburg economist Prof Peter Baur said yesterday the shops created jobs and generated income for many, particularly in underprivileged communities.

“They provide access to markets by offering goods and services more conveniently and they are often better located,” he said.

“Spaza shops are not inherently illegal… many of them are registered as small businesses.”

Baur added: “Despite the straightforward process of registration, many owners hesitate to formalise their businesses due to fear or lack of information.

“Some spaza shop owners participate in stokvels, which are collective buying groups that enable them to purchase goods in bulk at discounted prices.

“This approach not only reduces costs, but also allows these shops to pass on savings to consumers by offering more affordable goods.”

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Baur said in the country’s dual economy, which comprises formal and informal sectors, spaza shops significantly contributed to the informal sector by providing essential goods and services.

He said their presence ensured convenience and affordability for consumers while promoting economic activity at the community level.

Baur added that the shops required greater support in the registration processes and broader governmental assistance.

“Formalising these businesses can address challenges such as hygiene standards and ensuring safer operations. The shops are subjected to higher levels of crime such as theft. Therefore, they should be assisted to strengthen security as well.”

‘Spaza shops could do better to implement health protocols’

Last week the Presidency appealed to public leaders to allow documented immigrants to register their shops.

The president was reacting to allegations that there were people denying foreign nationals the chance to register their businesses.

Another economist, Dawie Roodt, said spaza shops were playing a big role in the economy.

Roodt said the shops should be safeguarded to ensure they do not sell counterfeit products, especially food because it affected people’s health.

Economist Khaya Sithole said: “When they manufacture their own products they bypass health protocols.

“Another problem is that prices of their counterfeit products are low which affects legitimate businesses selling genuine products.”

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