Business
South Africa Launches R500 Million Fund to Boost Spaza Shops and Ensure Food Safety Compliance
The South African government is set to launch a R500 million spaza shop support fund within the next two weeks, aiming to boost local small businesses and ensure compliance with food safety standards. The initiative, announced by Minister for the Department of Small Business Development Stella Ndabeni-Abrahams, is part of a broader effort to assist small businesses and curb foodborne illnesses.
A Lifeline for Spaza Shops
Spaza shops, which are small convenience stores often found in townships, play a vital role in South Africa’s informal economy. However, many of these businesses struggle to meet food safety regulations due to financial and operational challenges. The new fund aims to address these issues by providing financial and non-financial support to spaza shops and food-handling outlets.
Ndabeni-Abrahams emphasized that the fund will help businesses achieve compliance with food safety standards while also improving their competitiveness. “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,” she said during a media briefing in Pretoria.
Key Features of the Fund
The R500 million fund will focus on several key areas to support spaza shops:
- Bulk Purchasing: The initiative will link spaza shops to buying groups, enabling them to purchase stock in bulk at lower prices.
- Business Training: Capacity-building programs will be rolled out to improve shop operations and enhance market competitiveness.
- Financial Support: Start-up businesses will receive a minimum allocation of R10,000 to test the market and scale up their operations. An additional R40,000 will be provided for bulk-buying of stock, while a R100,000 financial package will cover infrastructure-related expenses to ensure compliance with regulations.
Ndabeni-Abrahams acknowledged that the R500 million budget may not be sufficient given the size of the spaza shop industry but stressed that the fund is a critical step toward supporting deserving businesses in need.
Registration Drive and Compliance
The announcement follows a nationwide registration drive for spaza shops and food-handling outlets, which concluded on February 28. The drive aimed to ensure compliance with food safety standards and rebuild a more competitive and compliant business environment.
Gauteng MEC for Finance and Economic Development Lebogang Maile provided an update on the registration process, revealing that 17,617 applications were received across the province. Of these, 7,107 were from foreign nationals. While 4,610 certificates of acceptability were issued, 15,478 businesses were deemed non-compliant, with 498 closed immediately due to safety concerns.
Bringing Government Services Closer
As part of the initiative, the Department of Small Business Development plans to roll out a multi-disciplinary outreach program to bring government services closer to communities. “The purpose of the outreach program is to disseminate information on community convenience shops and support offerings,” Ndabeni-Abrahams said.
The program will also provide non-financial support to businesses that have applied for registration but are not yet compliant. These businesses will receive assistance over the next six months to meet the required standards.
A Step Toward Economic Recovery
The R500 million spaza shop fund is a significant step toward supporting South Africa’s informal economy and ensuring food safety. By empowering small businesses and improving compliance, the initiative aims to create a more resilient and competitive business environment.
As the fund is launched in the coming weeks, spaza shop owners and entrepreneurs will have access to the resources they need to grow their businesses, contribute to the economy, and provide safe, reliable services to their communities.
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