South Africa must now enforce the registration of businesses in townships and rural areas, particularly those businesses owned by migrants.
This process is to be anchored in numerous municipalities, but the archangels of “less regulations” are dead set against it, arguing it increases red tape.
I have no malice against fellow entrepreneurs from elsewhere, but the markets in townships and rural areas cannot be a happy hunting ground for all and sundry while locals wither in the background.
Instead, as township and rural economies are being developed, locals must be in the belly. Knowing who is doing what, where and what he or she needs is thus essential and every player in these markets must thus be registered.
After all, government officials must provide interventions that strengthen indigenous entrepreneurs. These will then start their tax paying and job creation responsibilities. These thoughts come to mind as Minister Malusi Gigaba battles with the entry of migrants into South Africa, some of whom end up starting businesses
He states: “Like many countries, we strive to attract tourists, business travellers, skilled workers and investors at the same time, like all countries around the world, we are accountable first and foremost to our citizens.”
He adds, and this is the clincher: “Like all countries around the world, we also prioritise our citizens when it comes to employment and economic opportunities. Foreign nationals play an important role in bringing new knowledge, skills, networks and dynamism, but like all countries, we expect them to complement our workers, not be a substitute for them.”
Regarding entrepreneurship, I argue that we put the word “fair” in front of the word “substitute” as, by nature, competitiveness in markets results in substitution. But some of these foreigners, certainly not all, have abused our hospitality.
They do not pay tax, break most rules in health and safety standards, and employment practices. A few even bring in contraband to sell to the consumer leading to the demise of local manufacture. This enables them to dominate local markets as locals gasp for oxygen.
Small wonder there are periodic outbursts of violence against foreigners moving from area to area. I am not xenophobic and will never support attacks on foreigners. Instead, I believe in the free enterprise system. However, markets must be regulated to ensure desired results, one of which in our case is the empowerment of previously discriminated against locals.
Thus, sentiments by Gigaba justify all measures that need to be taken to ensure that when developing township and rural economies the main beneficiaries must be the locals.
Let us pause a little here to give some context. Research by the University of South Africa’s Bureau for Market Research in 2008 points out that since the late 1990s township inhabitants have experienced a substantial economic uplift. This increase in spending, together with the fact that many traditional retailing areas are becoming saturated, has caused national retailers, especially supermarket chains, to increasingly focus on market expansion strategies in these emerging markets.
On the other hand, we have had the invasion by foreigners referred to above. While the invasion of residential areas by chain stores, retail giants or other forms of competitors such as the foreigners is par for the course; the problem is that most indigenous entrepreneurs are not that developed to stand their ground or box more cleverly, thanks to the discrimination of the past.
As markets in townships and rural areas cannot be closed to outsiders like in the apartheid past; locals do need protection and support from their government as other governments give to their locals. In Ghana or Tanzania, a foreigner cannot get into the informal sector, finish and klaar.
As our government cannot enforce a similar ban because of our laws, the least it can do is to reduce the unfair competition in these areas.
Let the same obligations that apply to locals also apply to foreigners, and let us know if their suppliers also operate according to the rule book.
Therefore, the registration of all businesses by municipalities becomes necessary. We have had enough of black South Africans always coming second when they sacrificed for the attainment of this democracy. Finally, the minute people say “this far and no further” because, as in the days of apartheid they are still outside the economy; all hell will break loose.
Liberalist niceties bandied by the archangels such as “open the economy”, “free markets”, “less government in the economy” and “remove all regulations”, to quote a few, will be of no use as the country will be on fire. In any case, to respond to the archangels; some regulations are necessary while others are not.
Nowhere in the world is there a society without business regulations. The trick is finding the correct balance between necessary and unnecessary.
Dr Thami Mazwai is special adviser to the Minister of Small Business Development, but writes in his personal capacity.