Government to launch R500 million spaza shop support fund

The government is set to launch a R500 million spaza shop support fund within the next two weeks with the aim to boost local small businesses in need of funding.

Minister for the Department of Small Business Development Stella Ndabeni-Abrahams announced the initiative on Sunday in the wake of the February 28 deadline for registration of spaza shops and food handling outlets.

The funding was part of the interventions by her department and the Department of Trade, Industry and Competition to assist small businesses and curb further foodborne illnesses.

The registration drive, Ndabeni-Abrahams said, was to ensure compliance with all food safety standards and to rebuild a more competitive and compliant business sector in the country.

Cognisant of the challenges and costs spaza shops face in becoming compliant, the minister said government will provide non-financial support to those that have applied but are not yet compliant over the next six months.

“We will now take this initiative to scale with the R500 million spaza shop support fund that will soon be launched to support township convenience shops, including spaza stores. The fund will be launched in the next two weeks and a date will be communicated,” she said.

Ndabeni-Abrahams said the fund aims to achieve economies of scale by linking spaza shops and food handling outlets to buying in groups for bulk purchasing.

It also aims to build business capacity through training and support to improve shop operations, including enhancing market competitiveness to help spaza shops and food handling outlets compete with larger retailers.

Ndabeni-Abrahams said: “We are planning to roll out a multi-disciplinary outreach programme. The purpose of the outreach programme is to bring government services closer to the people through disseminating information on community convenience shops and support offerings.”

To support start-up businesses, the department has a minimum allocation of R10 000 per needy business.

Additionally, R40 000 will be provided to facilitate bulk-buying of stock, enabling the new businesses to get off the ground and operate more efficiently.

Ndabeni explained that an allocation of R10 000 for a start-up is meant to provide assistance for an entrepreneur to test the market, gauge the demands, and then scale up a business from there.

Her department has also put together a financial package worth R100 000, which includes R50,000 specifically allocated for infrastructure-related expenses, such as basic building necessities, to ensure compliance with regulations.

“When we are talking about the money that we have put in place it is to intervene to assist those that are deserving and in need of that,” she said.

She acknowledged that the R500 million budget may not be sufficient due to the significant size of the spaza shop industry.

Earlier during the day Gauteng MEC for Finance and Economic Development, Lebogang Maile, also provided an update on the outcomes of the province-wide spaza shop registration process.

The total number of applications for the registration by spaza shops and food-handling facilities across the province is 17 617, which includes 7107 applications by foreign nationals.

The City of Joburg recorded the highest number of registration while Ekurhuleni has the highest number of applications by the foreign nationals with a total of 2543.

The Gauteng municipalities issued a total of 4610 certificates of acceptability, a mandatory business permit issued under Regulation R638 confirming compliance with basic food safety and hygiene requirements for food permit handling and transportation.

At least 128 of the certificates were issued to foreign nationals.

Maile said: “A total of 15 478 spaza shops and food-handling facilities have been deemed non-compliant, with 498 of these closed with immediate effect.”

Cape Times