Minister Stella Ndabeni-Abrahams brief media on 500 Million Spaza shop fund.

Added: 2026-05-31

[00:00:00]assist you uh to look at some of uh the issues and when we come to your Q&A question time we're able to look at that maybe I will request also the director general when she assume the platform to also introduce the team uh that is here and thank you very much >> department of small business development and I am accompanied by the interim chairperson of SETA, Mr. Patrick Makapa.

[00:00:33]The far right next to him is the acting CEO of SETA, Mr. Kosika Mata, and also I have the DDG uh from the Department of Small Business Development, Miss Anil Dewa. Thank you.

[00:00:50]Um government continues to make progress uh in the implementation of the 500 million spasa shop uh support fund with measurable advance advances in application [clears throat] processing verification and funding support to qualifying spasa shop owners across South Africa. The spasa shop support fund is a joint initiative led by the department of small business development and the department of trade industry and competition the DTI and implemented through the small enterprise development and finance agency which is set and the national empowerment fund the NF following president sir Ramaposa's announcement in November 2024 which emphasized the need to strengthen regulation improve compliance and form formalized the spasa shop sector in response to concerns around food safety, illicit trade and public health. Through the ministerial multi-disiplinary committee on foodborne illnesses and illicit trade government coordinated the reporting of national registration of spasa shop the registration process closed on the 28th of February 2025 with municipalities reporting approximately 82,000 spasa shop registered nationally.

[00:02:08]Subsequently, verification confirmed 44.696 registration businesses of which approximately 15,000 have obtained approved trading permits or licenses. It is important to distinguish that registration does not equate to licensing. Spa shop owners are therefore required to secure trading permits or licenses through their respective municipalities to achieve full compliance and access funding opportunities.

[00:02:37]This gap continues to highlight systematic challenges within the licensing environment, including municipal backlogs driven by manual processes, shortages of environmental health practitioners that are required for inspection and certificate of acceptabilities, h complex zoning requirements, high compliance cost and also verification challenges such as ownership discrepancies and non-operational businesses. To address these constraints, we are working closely with municipalities to promote conditional licensing, expand the use of digital and electronic licensing system, strengthen intergovernmental coordination.

[00:03:15]To date, since implementation, the fund has continued to gain traction, reflecting the the scale of demand for the fund. To date, 4522 complete applications have been received nationally, of which 4,240 have been assessed. The assessment process continues to highlight a key structural constraint within the sector with only 58% of applicants linked to valid business licensing or temporary permits issued by municipalities. As a result, a significant number of applications remain unable uh to progress until licensing and compliance requirements have been addressed. And as part of ensuring the integrity of the program, site visits and verification processes have identified that 354 applications that could not be processed due to non-compliance, including non-existent businesses, ownership discrepancies, and inconsistencies between the applicants and the operators. To date, 2,369 businesses have been approved to support uh for support through the the fund. For applications that have been completed, the verification and the compliance process and meet all the program requirements, approval rates remains at 100% demonstrating government's commitment to supporting qualifying South Africans owned Spaza shop. SEFA has approved 1,3 1,316 applications valued at 79.6 million while the National Empowerment Fund the NF has approved 1053 enterprises valued at 99.9 million. So collectively the two implementing agencies have approved support to the value of approximately 179.6 million across all the nine provinces. The approved support include the stock purchases, point of sale devices, infrastructure upgrades, inventory support, business improvements, and non-financial business development support, which is designed to improve sustainability and competitiveness within the township and the rural retail sector. The fund has contributed meaningfully towards government's transformation objective with about 43% of approved enterprises being womenowned businesses. 18% youth owned businesses and 2% businesses owned by a person with disabilities. This demonstrate the fund's contribution towards broadening economic participation and supporting greater inclusion within township and rural economies. Beyond the financial support, the fund is designed to drive long-term sustainability. SEFA and the NEF, they continue to provide targeted business development support including training and compliance assistance. This covers areas such as your business and financial management, point of sales system training, digital literacy, credit management, regulatory compliance, and business formalization support. In addition, the implementing agents will once again embark on a nationwide outreach and awareness program from June 2026 to encourage more qualifying SPA shop owners to apply and to assist enterprises requiring compliance support. The spasa shop uh support fund forms part of a government's broader commitment to strengthening township economies, supporting informal businesses, creating employment opportunities, and expanding economic participation within local communities through targeted support for women, young entrepreneurs, and other designated groups. The fund contributes to building a more inclusive representative economy while also advancing the objective of economic transformation and also localization.

[00:07:00]It is important to know that the fund supports South Africanowned spas shops with strict verification measures in place to present fronting and abuse. Only applicants who meet ownership compliance and operational requirements and who possess valid trading permits or licenses are approved. The due diligence process applied to the program are specifically designed to identify and mitigate risks such as fronting. I thank you.

[00:07:45]Thank you very much DG for the uh feedback but also thank you very much for touching on quite crucial points uh like one the issue of uh that the licensing procedure and criteria is designed to benefit South Africans. I think that is a is is a key issue and that's an issue also that uh contribute towards compliance also. Thank you very much DJI for touching on the issue of fronting. Um we know that uh that is still an issue uh that is uh facing South Africans >> [clears throat] >> uh of uh fronting and gentlemen on that note um I think that is here that will assist also in questions >> [clears throat] >> uh that have been that will be May I then invite the questions firstly from the house before I go to the online questions. I hope uh TK we will also share the statement with the colleagues uh so that colleagues can familiarize themselves with some of the numbers the percentages that uh the DG uh outlined the drill is the same colleagues uh you'll see there is a knob just where you seated you press it it becomes red and then uh when you are recognized you speak any takers DJ, it appears your message was quite quite clear and well delivered, but okay, I see a hint.

[00:09:46]>> All right. Thanks. This is from BNC. I'm just requesting a oneonone on a one-on-one.

[00:09:58]No, thank you very much. Any other question? Let me see. my my my colleague is uh is just seated between the two of you. Uh so he is the D guy for the one ones uh that will be delivered. May I check uh TK if we have any online questions?

[00:10:20]It appears no we we don't have any online questions uh for now. Digi on that note uh let us take this opportunity uh to thank you and the team uh that is here um as per the request of the colleagues I'm alerted that there is a burning hand I will uh note and recognize it you are recognized at the at the back >> thank you very much uh bring Thank you. Thank you [clears throat] Mr. The question is from representing the business days. The question is does government regard migrant old as networks as part of the township economy it wants to or as competitors to South African old businesses that should be that should be displaced through localization policy.

[00:11:22]Thank you very much. I'm not sure DJ if you got the question or should he come with it again? TK repeat the question.

[00:11:31]The question is does government regard migrant own networks as part of the township economy it wants to formalize or as competitors to South Africanowned businesses that should be displaced through localization policy?

[00:11:49]>> Thank you very much. Um DJ, you have the luxury of deciding who should respond to this question, including yourself. Thank you very much.

[00:12:00]>> Thank you very much.

[00:12:14]>> Thank you very much um for that question. Um I think it's best to answer this question in this way. When we analyze the township economy and especially the resale uh retail sector, we identified that South Africanowned Spaza shops and retail businesses were facing tough competition from their competitors who h are at times the big retails themselves. uh we know them who are in the uh township space and are operating mini uh spasa shops but also foreignowned um spasa shops as well. So the fund um leverages um the use of bulk buying because that is what we have found to be the competitive advantage from the other spasa shop uh owning networks and so that's what essentially the spasa shop fund tries to do through the stock that we provide which is bulk buying and leveraging the wholesale buying so that uh they get the pricing of the stock at reasonable prices. So it is in that way a direct intervention to make sure that locallyowned or South Africanowned spasa shops are not kicked out of the market purely based on the e economic advantage of uh the dominance by other networks who are using their bulk buying and their network power to to destabilize or to remove them from the market. Thanks.

[00:14:04][clears throat] >> Thank you DDG and thank you for that response. Um I think is one of the issues that has been um a boiling issue on the ground. Uh DG I'm not sure if uh we agend or you want uh one of the people to say something but DG in that uh time there is also an activation of a question that is coming.

[00:14:39]>> Thank you very much from I might have missed and I think Mr. I'll ask that you have the copy of her statement so that we have access to the to the figures. But I wanted to know if it would be possible for her to break down maybe the figures of you know how much support was given to respected provinces and also which provinces were receiving or have received um support so far. And then secondly, what kind of support um you know exist for applicants who are struggling with you know compliance um requirements and also what is being done to you know continuously get the message out there of the availability of of this funding. Thank you.

[00:15:25]>> Thank you very much. May I request that uh the statement be shared online with all the media groups uh colleagues.

[00:15:34]Thank you very much Di.

[00:15:37][clears throat] >> Uh thank you very much. Um in terms of the approvals uh what uh gives us the 79.6 6 million that I spoke to per province.

[00:15:56]Uh the Eastern Cape we approved 127.

[00:16:03]Uh, Free State 169, Kaeng 59, Quazulu Natal 496, Limbobo 243, Bumalanga 46, Northern Cape uh 96, Northwest 34, and the and Western Cape 46, which gives us uh the total for all the provinces of uh 1,316 to the value of uh 79626 uh million. done. I thank you.

[00:16:59]I think the statement colleagues would be shared including the um the information fact that uh the DG was uh referring to. I just got alerted by the G to say that you have two agencies or vehicles that assist in the process of uh checking compliance but also the issue of funding but also the whole issue of uh processing and the DG has uh requested that I invite the acting CEO to come and also touch on that issue because it's quite important uh is an information sharing session co acting CEO.

[00:17:53]>> All right. Um thank you um DG and thank you media houses uh present. I think um the DG was um just reading um the stats in terms of the provincial allocation and you could see that um some provinces are ahead and um you can easily link that with um the efficiencies in the different municipalities and provinces in terms of registering and issuing uh licenses and we are seeing quite a number of applications coming from the provinces of Kazaden coming from the provinces of um, Limbbo um, and to a certain um, extent um, also in the Eastern Cape. And um, the process in terms of us working and also um, making sure that um, the fund goes to the right uh, people is that post um, the application that would have received. We then um do our own internal um, verification of documents and those that have complete documents, we then do site visits um, for those um, businesses. But post the site visits you want that um then the next step will be to make sure we write to municipalities and ask them to confirm if indeed the licenses um that have been uh issued are uh indeed or that we've received ourselves they did issue those licenses. We do find in most in some of the circumstances for example we've got about 350 spa shops that had applied where upon um a verification of licenses we found that actually the licenses were not uh I mean were fraudulent. Some of them within that number we found that actually when you go on site there's no spasa shop uh at all or you go on site you find that the person who applied is not the same person that um is running the spasa shop or the location is totally different from what has been um declared and those are the challenges that we face and um we also would like to to call upon um the different associations you know that are assisting pasa shops um to contact us engage with us but also um make sure that they fight for the poster shops or there for their constituencies to make sure that they've got um the permits or um the licenses so that we are able to fund. We would like to complete um the fund basically as things stands um what we have and what we have complete in terms of applications um and that have all the documents and that we've verified. we've approved that we are busy distributing and dis dispersing stock um to um those applicants and we want to see more applications coming through so that we're able um to complete or to utilize the entire fund uh that uh we have. So it's important that then we work together with associations and the municipalities um to ensure that um we're able to get um the right applicants coming through. It is our interest that only South African um owned pasa shops are getting the funding and we make sure through the vigorous um checking checks that we have that actually the money only goes to South African-owned um spa shops and that is the interest and that's what we need uh to safeguard uh as the fund manages. Thank you very much.

[00:21:09]acting CEO, thank you very much, but also thank you very much for highlighting uh some of the uh challenges that uh are pertaining on the ground. It's quite important that uh we also be alive to them and uh we assist in resolving that. Ladies and gentlemen, on a Friday h let me thank you very much for uh indulging [clears throat] um in this uh important aspect of the economy but also an important aspect to the general populace of South Africa as we know that most of our outlining areas outlying areas depend on the spasa shops for uh the purchasing of whatever they need. So they are quite an important aspect of the economy and we want to thank also the department of small develop small business development for the update. We take it that it's a uh work in progress as it involves other spheres of government. On that note uh from the GCIS this uh media briefing is agenda and thank you very much.