The ANC Youth League (ANCYL) in Gauteng has raised alarm over the lack of transparency in the allocation of a R500 million fund aimed at supporting spaza shops in townships. With no clear information on how the funds will be distributed or who the beneficiaries are, the party has called for immediate clarification, highlighting concerns about the equitable distribution of resources and the potential for public distrust.
The fund, which was announced by President Cyril Ramaphosa last month, is part of the government’s strategy to bolster small businesses, particularly in the informal sector. The initiative includes spaza shops and street vendors, following growing concerns about illnesses and fatalities linked to some of these businesses. The fund will be jointly managed by the Department of Trade, Industry, and Competition, and the Department of Small Business Development.
ANC Youth League’s Demands for Youth Inclusion
The ANCYL has made it clear that a significant portion of the R500 million must be directed toward youth-owned spaza shops, an important step in addressing youth unemployment. Provincial Secretary of the ANCYL, Mpume Sangweni, emphasized the need for young people to be central players in the economic growth of South Africa, stating, “This initiative should be a catalyst for meaningful economic transformation and social change.”
Sangweni also raised concerns over the registration process for spaza shops, which he described as “an administrative catastrophe” due to inefficiency, corruption, and uncoordinated government efforts. He pointed out that while the intention behind the registration was commendable, the execution has failed to meet the needs of the informal sector, highlighting systemic challenges that hinder growth.
Government Response and Concerns of Inefficiency
In response, Gauteng MEC for Economic Development, Lebogang Maile, defended the government’s efforts, stressing that the primary goal of the provincial government was to ensure the economic empowerment and prosperity of South African citizens. Maile reiterated the government’s commitment to inclusivity and sustainability, stating, “Our insistence on compliance is based on the objective of building an economy that grows in the hands of South African communities.”
However, the Youth League’s criticisms reflect broader frustrations with the government’s handling of the informal economy. Sangweni pointed out that authorities have failed to address the structural and regulatory barriers that prevent spaza shops from thriving, with increased red tape and coordination failures only making matters worse. He also cited troubling incidents where South African citizens have registered businesses for undocumented foreign nationals, exposing inequalities within the economy and highlighting the lawlessness that persists in the sector.
Compliance and Consequences
Despite these criticisms, Maile stressed that compliance was crucial for creating a fair and empowered economy. As part of the ongoing effort to regulate the informal sector, the Gauteng government has closed 541 spaza shops for failing to meet compliance requirements. These shops will remain closed until they meet the necessary standards.
While the government insists that compliance is essential for long-term growth, the Youth League’s demands for reform signal a growing frustration with how the registration process has been managed. The League calls for a more efficient, transparent, and inclusive approach to ensure that the funds meant to empower small businesses benefit those who need it the most, particularly youth entrepreneurs.
A Call for Urgent Reform
As the controversy surrounding the spaza shop registration process continues to unfold, the ANCYL remains resolute in its demand for a fair and transparent allocation of the R500 million fund. The Youth League insists that without meaningful reform, the government’s efforts to uplift the informal economy may fall short, failing to address the root causes of inequality and inefficiency within the sector.
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