In April, the ministers for small business development and trade, industry and competition, Stella Ndabeni and Parks Tau, respectively, led the official launch of the Spaza Shop Support Fund.
“The opening of the applications for the fund marks another milestone in the government’s efforts to stimulate the growth of the rural and township economy in the country, particularly by providing the necessary support to the convenience stores and spaza shops that are based in the townships and rural areas,” remarked Ndabeni.
“Government recognises the important role that small businesses, including those operating in the rural areas and townships, can play in creating jobs, growing our economy and alleviating poverty.”
With SA’s GDP growth forecast for 2025 revised down to 0.9%, year-on-year, spaza shops are a significant component of the country’s socioeconomic landscape.
They are crucial for several reasons, including their significant contribution to economic growth, job creation, driving local commerce and social inclusion.
With roughly 120,000 to 180,000 spaza shops operating countrywide, it is clear they serve as vital economic hubs in underserved communities, providing essential goods and services and fostering entrepreneurial activity by channelling income into our townships and rural areas.
Spaza shops face formidable challenges that hinder their growth, including limited access to markets and finance, regulatory compliance and supply chain disadvantages.
It is well known that these challenges prevent spaza shops from thriving, and a co-ordinated effort is essential to create a more supportive and sustainable environment to enable them to flourish and contribute to the goal of inclusive economic growth.
It is for these reasons that the Competition Commission of SA recently held a round-table with government stakeholders and the private sector to actively complement and strengthen existing efforts by stakeholders to support spaza shop development, and advise how competition regulation can contribute to enhancing co-ordination.
The round-table generated meaningful dialogue and explored joint efforts that would cultivate a sustainable environment for spaza shops to flourish.
Many readers might ask what role competition regulation can play to assist and empower spaza shop owners to grow their businesses and compete more effectively in the market.
First, the block exemptions for small, medium and micro enterprises (SMMEs) are a useful legislative tool that allows certain forms of collaboration between small businesses, including spaza shops.
SMMEs have traditionally competed against one another, but collectively are able to achieve greater economic effect.
For example, under these block exemptions, spaza shops can gain permission from the commission to buy collectively, allowing for lower costs and the platform to negotiate bulk discounts.
Other activities spaza shops can collaborate on range from pooling resources for product or service development and shared distribution, advertising or sales activities to collaboratively selling goods or services to markets. Block exemption applications for SMMEs are free and can be sent to exemption.conditions@compcom.co.za and exemptions@thedtic.gov.za
Second, our recently released information exchange guidelines provide clarity to SMMEs, including spaza shop owners, on the type of information which can and cannot be shared with their competitors, especially when they are collaborating.
Types of information that should not be shared include plans, individual data, customer lists, and cost information. Spaza shops may share historical or aggregated data. This helpful guideline is available on our website for spaza shop owners and all SMMEs to access and empower themselves with this important regulatory knowledge.
The recent round-table highlighted that spaza shop owners might not have the digital access to capitalise on these initiatives or the time to engage with the guidelines or exemptions.
The commission, therefore, remains committed to engaging with spaza shop owners on the ground and through community media outreach to raise more awareness of how the block exemptions and information sharing guidelines can support spaza shop owners to enhance their effective participation in township and rural economies.
Makunga is spokesperson for the Competition Commission of SA
SIYABULELA MAKUNGA | Fueling spaza owners to grow township, rural economies
Competition regulation can empower shop owners to compete effectively
Image: The Herald/Eugene Coetzee
In April, the ministers for small business development and trade, industry and competition, Stella Ndabeni and Parks Tau, respectively, led the official launch of the Spaza Shop Support Fund.
“The opening of the applications for the fund marks another milestone in the government’s efforts to stimulate the growth of the rural and township economy in the country, particularly by providing the necessary support to the convenience stores and spaza shops that are based in the townships and rural areas,” remarked Ndabeni.
“Government recognises the important role that small businesses, including those operating in the rural areas and townships, can play in creating jobs, growing our economy and alleviating poverty.”
With SA’s GDP growth forecast for 2025 revised down to 0.9%, year-on-year, spaza shops are a significant component of the country’s socioeconomic landscape.
They are crucial for several reasons, including their significant contribution to economic growth, job creation, driving local commerce and social inclusion.
With roughly 120,000 to 180,000 spaza shops operating countrywide, it is clear they serve as vital economic hubs in underserved communities, providing essential goods and services and fostering entrepreneurial activity by channelling income into our townships and rural areas.
Spaza shops face formidable challenges that hinder their growth, including limited access to markets and finance, regulatory compliance and supply chain disadvantages.
It is well known that these challenges prevent spaza shops from thriving, and a co-ordinated effort is essential to create a more supportive and sustainable environment to enable them to flourish and contribute to the goal of inclusive economic growth.
It is for these reasons that the Competition Commission of SA recently held a round-table with government stakeholders and the private sector to actively complement and strengthen existing efforts by stakeholders to support spaza shop development, and advise how competition regulation can contribute to enhancing co-ordination.
The round-table generated meaningful dialogue and explored joint efforts that would cultivate a sustainable environment for spaza shops to flourish.
Many readers might ask what role competition regulation can play to assist and empower spaza shop owners to grow their businesses and compete more effectively in the market.
First, the block exemptions for small, medium and micro enterprises (SMMEs) are a useful legislative tool that allows certain forms of collaboration between small businesses, including spaza shops.
SMMEs have traditionally competed against one another, but collectively are able to achieve greater economic effect.
For example, under these block exemptions, spaza shops can gain permission from the commission to buy collectively, allowing for lower costs and the platform to negotiate bulk discounts.
Other activities spaza shops can collaborate on range from pooling resources for product or service development and shared distribution, advertising or sales activities to collaboratively selling goods or services to markets. Block exemption applications for SMMEs are free and can be sent to exemption.conditions@compcom.co.za and exemptions@thedtic.gov.za
Second, our recently released information exchange guidelines provide clarity to SMMEs, including spaza shop owners, on the type of information which can and cannot be shared with their competitors, especially when they are collaborating.
Types of information that should not be shared include plans, individual data, customer lists, and cost information. Spaza shops may share historical or aggregated data. This helpful guideline is available on our website for spaza shop owners and all SMMEs to access and empower themselves with this important regulatory knowledge.
The recent round-table highlighted that spaza shop owners might not have the digital access to capitalise on these initiatives or the time to engage with the guidelines or exemptions.
The commission, therefore, remains committed to engaging with spaza shop owners on the ground and through community media outreach to raise more awareness of how the block exemptions and information sharing guidelines can support spaza shop owners to enhance their effective participation in township and rural economies.
Makunga is spokesperson for the Competition Commission of SA
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