S.Africa launches red tape reduction guidelines for SMMEs - CNBC Africa

S.Africa launches red tape reduction guidelines for SMMEs

Southern Africa

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The Department of Trade and Industry (DTI) partnered up with the Department of Cooperative Governance and Traditional Affairs (CoGTA and the South African Local Government Association (SALGA) to launch the programme on Wednesday.

 “Many small, medium and micro enterprises (SMMEs) are unable to survive because of the unnecessary burden placed on them by red tape,” said Minister of the Department of Trade and Industry Rob Davies at the launch of the SMMEs red tape reduction guidelines in Midrand.

The main purpose of the programme is to provide guidelines on how to reduce red tape at local government level, resulting in the enhancement of municipal officials’ capacity to improve the local business environment.

The development of the guidelines came from the findings of a study conducted by CoGTA and the DTI in 12 municipalities across South Africa, which revealed red tape issues at local government level that affect the operation of SMMEs.

“At the moment, unemployment and poverty remains a challenge for our country and small business empowerment plays an integral role in fighting these issues”, said SALGA Deputy Chairperson Mpho Nawa.

CoGTA Deputy Minister Yunus Carrim added that municipal officials tend to have a bureaucratic mind set and this needs to change in order to encourage private business and municipal cooperation. 

Some of the Red Tape concerns that the guidelines will address include but are not limited to the improvement of municipal service delivery, municipal policies and supply management chain processes.

Another main focus of the programme would be on reducing the unfair competition for registered SMMEs, which stems from illegally operated businesses that usually do not pay Value Added Tax charges and deal in illicitly imported goods, stated Davies.

He explains that in order to do this, a central database will be maintained that lists all businesses operating in South Africa as well as their locations. A register of all illegally operated businesses will also be kept so that those operators can be suspended from trading.

While the programme holds a lot of promise, the public’s major interest lies in whether the guidelines will be implemented effectively.

 “These guidelines have been in the making for a long time, however, their true value can only be judged in their implementation as government are known to be slightly weak when it comes that,” stated Carrim.

He emphasised the importance of allowing municipalities to implement the guidelines at their own pace as they are situated in very different conditions to one another. Some municipalities already have the capabilities and technological means to adapt to the programme while others are not yet as developed.

Carrim added that his department was engaged in a process of reviving the local economic development (LED) forums in municipalities to ensure that small businesses are given the necessary support at local government level.

DTI Deputy Director-General Sipho Zikode stated that a national roll-out of the guidelines will take place in order to provide municipalities with an opportunity to set structures in place that will reduce barriers and increase SMMEs access to business opportunities.  

Davies also assured that over the course of the year, the DTI along with CoGTA and SALGA would be visiting different municipalities across the country to ensure the guidelines would not just “sit on a shelf” and that they are actually being adhered to.