The Minister of Trade and Industry, Dr Rob Davies says many small, medium and micro enterprises (SMMEs) are unable to survive because of the unnecessary burden placed on them by red tape. Minister Davies was speaking at the launch of the Guidelines for Reducing Municipal Red Tape in support of SMMEs held in Midrand today.
“Red tape is inappropriate or unduly restrictive legislative and regulative conditions and relate to overlaps and duplication caused by unnecessary or inflexible regulations, where the convenience of bureaucracy overrides the impediment which is imposed on the clients and this is against Batho Pele,” said Davies.
He emphasised that red tape places a burden on the small enterprise and that Red tape reduction is not equivalent to de-regulation.
According to Davies, the red tape reduction guidelines project was based on a recognition that small businesses in South Africa are suffering from excessive red tape, not only in municipalities but at provincial and national level, in all their interactions with government and with big business.
“This kind of red tape is not only a cost and a burden but also means that the effectiveness which is the regulatory outcome, is put in question,” he added.
Davies said the dti has introduced at national level, the new Companies Act which reduces the burden of registration on companies and that the department is also tweaking the BEE codes to assist partnerships with big business, also trying to remove private sector red tape. “We have also said that we need an instrument to create a database of businesses operating in the municipalities,” he added.
The Deputy Minister of Cooperative Governance and Traditional Affairs, Mr Yunus Carrim said government was aware of the capacity challenges experienced at municipalities and that these guidelines will strengthen municipalities.
He 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.
The Deputy Chairperson of SALGA, Councillor Mpho Nawa pledged SALGA’s support for the guidelines and encouraged municipalities to fully implement the guidelines in support of SMMEs.
“We are fully committed to this programme and I urge all our members to take it with the urgency that it deserves,” he said.
The guidelines for the reduction of red tape in municipalities in support of SMMEs were developed by the Department of Trade and Industry (the dti) in conjunction with the Department of Cooperative Governance and Traditional Affairs (CoGTA), and the South African Local Government Association (SALGA) as a support partner.
The guidelines serve as a practical implementation framework to reducing local government or municipal red tape for the enhancement of business environments with specific attention to SMMEs. These guidelines are also aimed at enhancing municipal officials’ capacity to improve the local business environment via local red tape reduction and contribute towards improved service delivery, job-creation and poverty reduction.
The development of the guidelines emanated from the findings of a study conducted by CoGTA and the dti in twelve municipalities across the country, which revealed that there are red tape issues at local government level that affect the operation of SMMEs. The guideline document makes proposals on how to improve the local business environment with measures specific to issues that affect SMMEs.
The guidelines will be rolled out will to other municipalities throughout the country, which were not part of the pilot project. This will be intended to ensure that all municipalities have access to this guiding tool. The national roll-out will provide an opportunity for these other municipalities to establish mechanisms to reduce barriers and increase SMMEs’ access to business opportunities.
Enquiries:
The Department of Trade and Industry (the dti)
Sidwell Medupe-Departmental Spokesperson
Tel: 012 394 1650
Cell: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Follow us on Twitter: @the_dti
Department of Cooperative Governance and Traditional Affairs (CoGTA)
Dr Nghamula Nkuna – Ministry Spokesperson
Tel: 012 334 5781
Cell: 071 393 4727/ 076 227 5907
E-mail: NghamulaN@cogta.gov.za
South African Local Government Association (SALGA)
Buhle Ngwenya (Manager: Marketing)
Tel: 012 369 8000
Cell: 083 626 9431
E-mail: Bngwenya@salga.org.za
