Government’s R500m Spaza Shop Support Fund Launches to Boost Township Economies

In a bold move to revitalise township and rural economies, the South African government has allocated R500 million toward the development and support of spaza shops and community convenience stores through the Spaza Shop Support Fund, receiving praise from business experts and stakeholders alike.

Minister of Trade, Industry and Competition Parks Tau and Minister of Small Business Development Stella Ndabeni-Abrahams will officially launch the initiative in Soweto next week, signalling a renewed focus on empowering small businesses at the heart of local communities.

A Shot in the Arm for the Township Economy

Ndabeni-Abrahams explained that the fund will be administered by the National Empowerment Fund (NEF) and the Small Enterprise Development Finance Agency (SEDA). It aims to offer a combination of financial and non-financial support, tailored specifically for township-based spaza shops and community convenience stores.

“The fund provides various types of support, including initial stock purchases through delivery partners, infrastructure upgrades, refrigeration, security, and essential business training,” said Ndabeni-Abrahams.

The training element includes everything from digital literacy, business compliance, and point-of-sale systems, to food safety and credit health. The minister highlighted that supporting these small enterprises was key to job creation, poverty alleviation, and the growth of the rural and township economy.

Experts Welcome the Move—but Urge Accountability

Economist Professor Peter Baur from the University of Johannesburg welcomed the government’s commitment, describing it as a “positive move”.

“Spaza shops are vital to the informal sector and offer significant opportunities, particularly for women entrepreneurs,” said Baur. “This fund could go a long way in creating a more inclusive and vibrant economic environment.”

However, he emphasised that transparency and monitoring will be essential to ensure that the money reaches the right businesses.

“The real challenge lies in how these funds will be allocated. It’s critical to align support with the actual needs of shop owners—such as storage, security, and operational systems,” Baur added.

He also encouraged the government to adopt a holistic and inclusive approach, noting that both South African and foreign national shop owners contribute to the township economy and should be supported without bias.

Registration and Regulation Ahead

President Cyril Ramaphosa has previously called for the registration of all spaza shops, which would allow the sector to be better regulated and more effectively supported.

With the R500 million fund about to roll out, authorities and community members alike are hopeful—but also cautiously optimistic—about how fairly and effectively it will be managed.

“This fund is a significant step forward,” said Baur. “But success will ultimately depend on transparency, inclusivity, and community-driven oversight.”

{Source The Citizen}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com