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Govt launches plan for small business

Johannesburg - Government announced guidelines on Wednesday to reduce municipal red tape to help small business development.

The guidelines were launched by the departments of trade and industry (dti) and co-operative governance and traditional affairs, and the SA Local Government Association (Salga), in Midrand.

They were intended to provide mechanisms on reducing red tape at local government level. They were also aimed at enhancing officials’ capacity to improve the local business environment and contribute towards improved service delivery, job creation, and poverty reduction.

The guidelines stemmed from a study conducted by the dti across 12 municipalities, which revealed red tape was a problem at local government level and had negative effects on small business growth.

Trade and Industry Minister Rob Davies said small businesses struggled to grow due to red tape. Businesses had to fill in forms and submit documents to different departments, and the some of these processes did not promote their growth.

"Of every seven small business operating today, only two will still be operating in a year from now," he said.

Davies said the new guidelines, which would be posted on all municipal websites, would help improve municipal business communication, by-laws, regulation, and supply chain management.

He said that during apartheid, government discouraged the growth of black-owned small businesses and therefore refused them access to trade in the central business district.

"Many municipalities have a policy which says you can’t just trade anywhere you like. We’re not like Bangkok; there are certain areas where people are allowed to trade," he said.

The trading environment for small businesses had to change, he said.

"Where are our people going to trade? How do you get them trading in those areas? Are those areas appropriate areas for people to trade or are we just forcing small enterprises among black people to just trade in the poorest communities," he asked.

Davies said the department had published the business licensing bill, aimed at creating a database of all businesses operating in the country.

The bill, when it became law, would be used to remove illegal businesses in the townships, which had constrained small business growth for some time.

It would also deal with businesses importing illegal goods and persons who operated enterprises within the country without valid permits.


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