Government intervention on spaza shops lacks nuanced planning to effectively address crisis: forum

The Institute of Chartered Entrepreneurs (IoCE) has expressed grave concern over President Cyril Ramaphosa’s hasty directive toregister non-compliant spaza shops across South Africa within an “impractical” 21-day timeframe.  

The organisation said it recognised the urgent need for interventions to prevent further tragedies, particularly the poisoning deaths of children, but said knee-jerk decisions could do more harm than good. 

Addressing the nation on the deaths of children due to food-borne illnesses on Friday, Ramaphosa said to get hazardous pesticides off the streets, all spaza shops and other food handling facilities must be registered within the municipalities in which they operate within 21 days fromFriday.  

“Any shop that is not registered within 21 days and does not meet all health standards and requirements will be closed,” Ramaphosa said. 

The IoCE said while it acknowledged the devastating loss of life due to recent food poisoning incidents, it believed government intervention lacked the nuanced planning required to effectively address the crisis.  

It said the informal economy, particularly spaza shops, sustained millions of livelihoods and served as a vital access point for essential goods in underprivileged communities.  

“A blanket approach to close or register the establishments will have catastrophic implications.” 

It said many spaza shop owners operated with perishable stock and have rental obligations.  

“Immediate closure leaves the businesses vulnerable to irrecoverable financial losses, further exacerbating unemployment and poverty.” 

The organisatoin said with more than 1,000 spaza shops in Soweto alone and thousands more nationwide, it was unreasonable to expect local authorities, who were already overstretched, to inspect, register and assist businesses within 21 days.  

The government failed to meaningfully engage with key stakeholders, including the informal sector, industry associations and community leaders, before announcing the drastic measure, the organisation said. 

It said no clarity had been provided on how affected traders could access resources or assistance to meet compliance standards.  

“The lack of guidance leaves informal traders in limbo and heightens the risk of non-compliance by necessity.”  

It said addressing systemic issues in the informal trading sector requires deliberate and well considered measures. 

These include phased implementation, such as registering spaza shops over an extended period with targeted support programmes for compliance and education on food safety.  

Another measure included strengthening municipalities. 

“We urge President Ramaphosa to reconsider the directive and engage with the small business sector to codevelop a balanced and enduring plan that prioritises public health and economic sustainability.” 

It said South Africa could not afford to further destabilise its informal economy through ill-conceived policies.  

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