Spaza Shops
By Thobeka Makume
Johannesburg, 02 March 2025 – Gauteng MEC for Finance and Economic Development, Lebogang Maile, announced this during a provincial update on spaza shop registration on Sunday, revealing that over 15,000 spaza shops and food-handling facilities in the province have been found non-compliant as the registration deadline of 28 February 2025 passed. Speaking at a media briefing, Maile highlighted the challenges faced during the process, which aimed to ensure food safety and rebuild a competitive business environment following a series of food poisoning incidents. “A total of 15,470 spaza shops and food-handling facilities have been deemed non-compliant, with 498 of these closed with immediate effect,” he said, underscoring the government’s commitment to addressing the crisis while supporting struggling businesses.
Background to the Registration Drive
The spaza shop registration drive was launched 107 days ago by President Cyril Ramaphosa on 16 November 2024, in response to widespread food poisoning outbreaks that led to child deaths and hospitalizations across South Africa. The initial 21-day registration period, set to end in December 2024, was extended to 28 February 2025 after consultations with stakeholders, reflecting the government’s effort to include as many businesses as possible. The directive mandated all spaza shops and food outlets to register with their local municipalities and comply with health and safety standards, with non-compliant shops facing closure.
Maile noted that the Gauteng provincial government began inspections as early as July 2024, even before the president’s announcement, to proactively address the issue. This early action, combined with monthly media briefings since November, aimed to keep residents informed about progress, including digitization efforts, inspections, and training interventions. The final briefing on 2 February 2025 provided a detailed update, setting the stage for Sunday’s announcement of the registration outcomes.
Alarming Non-Compliance Figures
As of 28 February 2025, Gauteng received 17,620 applications for registration, including 7,107 from foreign nationals. The City of Johannesburg led with the highest number of applications, while the City of Tshwane recorded 2,543 applications from foreign nationals. However, the approval process lagged behind, with only 4,610 certificates of acceptability issued under Regulation R638, which confirms compliance with food safety and hygiene standards. Of these, 128 were awarded to foreign nationals.
The discrepancy between applications and approvals stems from several issues, including fraudulent documentation, delays in verification by the Department of Home Affairs, incomplete paperwork, and violations of building regulations. Maile emphasized that the high cost of business licenses also hindered compliance. “Non-compliance has been a significant challenge in the registration program,” he said, adding that 15,470 shops failed to meet standards, with 498 closed immediately.
Recent reports from SABC News (1 March 2025) corroborate these figures, noting that the closures targeted shops using hazardous pesticides, a key concern following the outbreaks. The government’s swift action has been praised, though some community leaders, as reported by EWN, argue that more support is needed for affected owners.
Reasons Behind Non-Compliance
Non-compliance is often linked to structural and operational challenges. Many spaza shops operate in undeclared townships, where township establishment requires complex processes involving town planners, geologists, land surveyors, and engineers. Environmental impact and traffic assessments are mandatory, and properties on agricultural land must be rezoned, a process that can take at least two months. Where regularization is not possible—such as structures on critical infrastructure—demolition may be considered, though Maile stressed this is a last resort. “Our approach to this matter is developmental; demolishing structures is our last resort,” he said.
Other factors include a lack of training among owners, many of whom belong to historically disadvantaged groups. The provincial government conducted 2,028 training interventions, reaching 7,801 informal traders and food handlers, focusing on food safety and hygiene. However, a shortage of environmental health practitioners, due to budget constraints and market volatility, has limited these efforts. Partnerships with non-governmental organizations are helping to bridge the gap.
Government Support and Next Steps
Despite the high non-compliance rate, the government is adopting a supportive stance. Maile outlined plans to sustain monitoring and evaluation to prevent future crises, including deploying building inspectors, environmental health officers, and local economic development officers. Law enforcement, through the South African Police Service and NATJOINTS, will support prosecutions for shops operating after prohibition orders.
Financial and non-financial support is also on the horizon. The provincial government is exploring funds under the Inclusive Economy Programme and partnerships with fast-moving consumer goods companies to offset the high costs of compliance, estimated at R25,000 for registration and up to R150,000 for new setups. Nationally, Small Business Development Minister Stella Ndabeni announced a R500 million support fund, with R150 million from her department and R350 million from the Department of Trade, Industry and Competition (DTIC), set to launch in two weeks.
Ndabeni’s six-month support plan includes non-financial assistance like training and equipment, such as point-of-sale systems, to help non-compliant but registered shops achieve compliance. “We understand the difficulties and costs associated with becoming compliant, and this is why we have committed to supporting those spaza shops who applied,” she said during her Sunday briefing. The fund will also promote bulk purchasing to enhance competitiveness against larger retailers.
Provincial Efforts Across South Africa
Provinces are complementing national efforts. In the Free State, Coca-Cola is refurbishing spaza shops, a programme started in July 2024, while a blended finance model combines grants and loans. The Northwest has deployed 600 ambassadors and established nine one-stop shop centres, with the Northwest Development Corporation incubating businesses. The Eastern Cape, a rural province, offers grants through the Eastern Cape Development Corporation (ECDC) and a procurement framework prioritizing 60% local spending, including for women, youth, and disabled traders.
Ndabeni also introduced the “DSBD Connect” platform, a digital tool to streamline registration, verify businesses, and provide access to funding and procurement opportunities. With only 60 municipalities nationwide having digitized systems, provincial working groups are assisting with e-registration to reduce red tape.
Addressing Community Concerns
The registration drive has sparked debates about foreign ownership, with 7,107 applications from foreign nationals raising concerns about local displacement. Maile clarified that foreign nationals must hold valid business visas or work permits, requiring a R5 million capital contribution or a business plan of national interest, as per the Immigration Act. The government is cracking down on illegal operations, with criminal cases opened against those submitting fraudulent documents, a issue uncovered by municipal officials who found duplicated permits and corrupt practices.
Community imbizos hosted by the Gauteng Department of Economic Development are addressing property ownership and zoning challenges, aiming to regularize township properties and educate owners. Ndabeni urged entrepreneurs to familiarize themselves with compliance laws, countering media claims of poor communication. “The fact that we are talking to the media does not mean everyone can consume the content,” Maile added, highlighting the need for broader outreach via radio and community engagements.
Economic and Social Impact
Spaza shops are a lifeline for township economies, supporting jobs and local growth. The registration drive aligns with the Gauteng Investment Conference on 3 April 2025, which aims to attract investment by ensuring a compliant business environment. Premier Panyaza Lesufi, in his 24 February 2025 State of the Province Address, identified lawlessness as a key challenge, linking compliance to crime reduction and economic prosperity.
However, the R500 million fund has drawn scrutiny. Divided across nine provinces, it averages R55.5 million per province, or less than R100,000 per shop if spread across 4,500 nationwide, as noted by a Newzroom Afrika caller. Ndabeni acknowledged the limitation, emphasizing ongoing support through township and rural enterprise programmes and provincial development finance institutions (DFIs).
Challenges and Criticism
Business owners have complained about the process’s complexity and cost, with some left behind due to bureaucratic delays. Maile defended the approach, noting 90 registration centres were set up to improve access, though he admitted challenges varied by municipality. Critics, including on SABC News (28 February 2025), pointed to insufficient communication, while a caller questioned the allocation of a R200 million road tender to a foreign company in Johannesburg, raising fairness concerns for black-owned businesses.
Ndabeni responded that legal compliance under the Immigration Act allows foreign participation, urging follow-ups on specific tenders. The government is addressing internal issues, with actions taken against officials aiding foreign nationals with fraudulent registrations, as reported by MMC officials in Tshwane and Johannesburg.
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