It is widely accepted that the best performing economies are those with the minimum number of regulations; ones where the heavy hand of government is least noticeable. I am therefore puzzled at the recent move by our province’s business regulations programme, driven by our ministry of Economic Development, Tourism and Environmental Affairs (EDTEA).
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Ostensibly, the enhanced enforcement of these regulations is aimed at rooting out businesses operating ‘illegally’. I for one am unconvinced, and believe that all these regulations are going to do is add another layer of red tape and cost that will serve as a further impediment to small business growth.
Existing bylaws should suffice
I will concede the absolute need for regulations in respect of health and safety for all businesses, particularly those serving or selling food, but would argue that existing municipal bylaws, if properly enforced, are adequate to serve this requirement.
My concern is that while promulgated at a provincial level, these new regulations will need to be enabled and enforced at a local government level.
As announced by MEC Sihle Zikalala, 43 municipalities in the province have been empowered to issue business licences and ‘ensure that proper inspections are carried out’.
Given that most municipalities already struggle to deliver on administrative service delivery (think of drivers licence renewals), the situation can only get worse. Of course, there will be additional costs attached as well for businesses needing to comply, most of them annually-based. Added to this is the additional opportunity for corrupt practices by officials, which does not bode well for new and existing businesses.
Success vs cost and frustration
My sense is that any potential successes in closing down illegal businesses will be outweighed by the frustration and cost involved in ‘legal’ businesses complying. The other fact that is hard to ignore is the perception that this increased focus on enforcing regulations is a smokescreen to drive out foreign-owned businesses which are successful in areas that locals are not. Recent ‘raids’ by law enforcement and SAPS in Marburg seem to support this perception, as it appeared that foreign-owned shops were targeted almost exclusively.
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To ensure that this project does not destroy the very sector of the local economy that is widely credited with creating the most employment, EDTEA must ensure that:
Sufficient capacity exists at local municipal level to administer the regulations
Smart processes such as online applications are introduced
Inspections are fair, speedy and professional
Costs attached to compliance are minimised
After matriculating, Vijay Naidoo studied Economics in the UK. Upon his return, hejoined the family construction business as MD for 10 years.
He subsequently joined his sister in their furniture manufacturing business as director for quality assurance and operations. He was responsible for all quality aspects of their products, and led the project to the business achieving an ISO 9000 quality accreditation. As an export focused business, this was important for our international competitiveness.
Mr Naidoo has an abiding interest in quality management and productivity improvement, particularly in manufacturing.
More recently, he has focused a lot of his time on giving back to the community by way of mentorship of small businesses and sitting on the executive of the South Coast Chamber of Commerce. He also sits on the Board of the Ugu South Coast Development Agency.
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