BY: Saneliso Mlambo
South Africa’s Small Business Development Minister, Stella Ndabeni-Abrahams, has announced a R500 million support fund aimed at helping spaza shops and small businesses in townships.
The initiative, which involves R150 million from the Department of Small Business Development and R350 million from the Department of Trade, Industry, and Competition, seeks to enhance the competitiveness of township convenience stores against larger retail chains.
The fund will focus on helping spaza shops access economies of scale by linking them to buying groups for bulk purchasing, thereby reducing costs. Additionally, it aims to offer training and business support to improve shop operations and overall efficiency.
Minister Ndabeni-Abrahams highlighted that this support will contribute to the growth of these businesses, bolstering South Africa’s economic development.
The fund follows the closure of a registration period for spaza shops and food-handling businesses at the end of February 2025. The registration aimed to ensure compliance with food safety standards and gather data to inform support initiatives. However, challenges were noted, with less than 25% of municipalities possessing the digital infrastructure to process these registrations efficiently.
While the announcement has been welcomed by many, some political parties are calling for transparency regarding the fund’s allocation and management.
The government is urged to provide detailed explanations to Parliament to ensure proper accountability and transparency in the fund’s deployment.