Govt Launches R500M Fund to Support Township and Rural Businesses Amid Food Safety Efforts

Minister of Justice and Constitutional Development, Thembi Simelane, outlined the fund's framework during a media briefing, emphasizing its role in supporting local entrepreneurs.

The South African government has announced progress in establishing a R500 million joint fund aimed at bolstering township and rural businesses, including local convenience shops and spaza stores. This initiative is part of broader efforts to mitigate the rising foodborne illnesses and strengthen the informal economy.

Funding Framework and Purpose

Minister of Justice and Constitutional Development, Thembi Simelane, outlined the fund's framework during a media briefing, emphasizing its role in supporting local entrepreneurs.

The departments involved are finalizing the operational procedures and guidelines for the fund, with completion expected within two weeks. Approved businesses will receive funding to improve infrastructure, regulatory compliance, and capacity-building efforts.

“The operational fund application and disbursement process will begin once the registration process is complete. All activities will be subjected to regular audits to detect and prevent fraudulent practices,” Simelane stated.

Eligibility Criteria for the Fund

To qualify, business owners must meet the following conditions:

Citizenship: Applicants must be South African citizens operating within the country.

Registration: Businesses must be registered with local municipalities and compliant with SARS regulations.

Prioritization: Entrepreneurs aged 18 to 35, particularly women, will be prioritized for funding.

Additionally, the Department of Small Business Development is creating a centralized nerve center with geo-mapping capabilities to track and regulate township and rural businesses. This national database aims to enhance regulatory oversight and ensure compliance to prevent future health crises.

Efforts to Curb Illegal Registrations

Minister Simelane raised concerns over reports of South Africans illegally registering spaza shops on behalf of foreign nationals. She warned that such practices constitute "fronting" and violate the Immigration Act.

“This illegal activity must stop. Landlords renting out premises for businesses must ensure tenants comply with the Immigration Act and local by-laws. The government will take strict action against those aiding and abetting illegal foreigners to conduct business,” Simelane said.

She also addressed allegations of civil servants participating in fraudulent business registrations, cautioning that offenders would face legal consequences.

Public Participation and Safeguards

Simelane called on the public to support the registration process and avoid interfering. She highlighted the government's commitment to ensuring fair and lawful participation in the process for all legitimate traders.

“Extortionists using this process for personal gain will face severe consequences. Citizens should report corrupt activities through the National Anti-Corruption Hotline at 0800 701 701,” she urged.

Broader Interventions for Business Compliance

President Cyril Ramaphosa’s directive for all spaza shops to register within 21 days has led to intensified scrutiny of the informal sector. The government’s multidisciplinary approach includes enhanced inspections of food-handling facilities, stricter oversight of business operations, and educational campaigns for compliance.

Path Forward

The R500 million fund and accompanying measures signal a robust effort to formalize and support township and rural businesses while addressing public health concerns. By ensuring compliance and fostering entrepreneurship, the initiative aims to build resilient local economies and safeguard community well-being.

Simelane concluded, “We are committed to creating an inclusive environment where legitimate businesses can thrive while upholding the law and protecting our citizens.”