Professor Bonke Dumisa, an economist and Public Investment Cooperation board member, has warned the government against creating false hope and unnecessary expectations that local people will immediately take over spaza shops that would have been abandoned by illegal foreigners following the Friday’s registration deadline.
Dumisa was weighing on the delivery of the State of the Province addresses where most premiers pinned their hopes on economic growth and job creation in township and rural areas, saying this could be created by the takeover of spaza shops.
Delivering his state of the province address on Friday, KwaZulu-Natal Premier Thamsanqa Ntuli commended the Department of Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa, for the publication of the Standard Draft By-Law for Township Economies, saying the initiative marked an exciting yet challenging moment, as it invited his administration to reflect on the potential for township and rural economies.
Ntuli said It was his administration’s firm belief that the township and rural economy in the province plays a vital role in both economic growth and job creation for local communities, with substantial value and employment opportunities across informal sectors like spaza shops, street vendors, and small-scale manufacturing.
Dumisa said as much as it was a good decision for government to return the township and rural economies back to its original hands, local people, in the form of rooting out illegal foreigners, the government should carefully manage a transition of spaza shops from illegal foreigners to the local people.
He said the incorrect perception that had been created is that locals will wake up tomorrow as owners of those abandoned shops. He said this would be disastrous because the government would have to close them again due to illegal operations.
“I listened to Minister Hlabisa saying there is an opportunity for local people to take over many spaza shops since most of them were run by illegal foreigners who had not qualified for registration certificates because they did not have permits to be in the country. For me this created a false expectation from local people that on Monday they would wake up as new owners of the abandoned shops. The government must emphasise that the registration was not only for foreigners, but for everyone.
Dumisa also cast doubt that the township economy will create jobs, arguing that these spaza shops had previously been owned by the locals, who because of a culture of entitlement and lack of business acumen, eventually rented them out to foreigners.
Ntuli in his address said the 2024 Township Economy Survey recorded that the township economy in KwaZulu-Natal is valued at R7,3 billion, with untapped innovation and entrepreneurial potential, that reflects the diverse needs and aspirations of township residents.
He added that in the coming weeks, Economic Development, Tourism and Environmental Affairs MEC Reverend Musa Zondi will provide a comprehensive report on the progress of the spaza shop registration process in KwaZulu-Natal.