News agency, Cape Town, South Africa
Tuesday March 19th 2019

Cape informal trading crackdown “extremely detrimental”

Peter Luhanga

A City of Cape Town crackdown on informal businesses has been described as “extremely detrimental” and exacerbating “an already very serious situation” in the context of widespread unemployment and poverty.

This is the view of two researchers involved in studying poverty and urban development.

The city is using the Land Use Planning Ordinance (LUPO) 15 of 1985 and a Streets, Public Places and the Prevention of Nuisances By-Law to clampdown on small businesses operating out of shipping containers or on pavements in areas not zoned for business.

But it denies a clampdown, arguing that it is trying to promote fair and legal trade amongst businesses without business permits.

City Specialised Law Enforcement Services chief Rudolf Wiltshire said 23 containers from Delft, Belhar and Mitchell’s Plain had been impounded since November 16.

The approach to informal traders has sparked anger, with about 300 traders marching to the Cape Town civic centre in protest on Tuesday, threatening to disrupt 2010 if their concerns are not heard.

David Neves, a researcher at the University of the Western Cape’s Institute for Poverty, Land and Agrarian Studies (PLAAS) said many traders counted on the December holiday period to boost incomes.

Closures were likely to be “extremely detrimental” to the livelihoods of informal traders and their larger households, he said.

And Caroline Skinner, a senior researcher at the University of Cape Town’s (UCT) African Centre for Cities, said 770 000 jobs had been lost in the South African economy from September 2008.

In this context, the city’s actions would “exacerbate an already very serious situation”.

This was not to say that the city did not have a right to move traders, she said, but that viable alternative trading spaces needed to be found.

She said data showed that informal traders had large numbers of dependents and provided an important service to poorer households.

Neves said consumers in the communities the traders served might spend their money elsewhere.

Poor communities were not only poor because of the absence of resources, but rather that the resources they accessed such as social grants and small irregular wages did not circulate within these communities, instead swiftly leaving to fill the tills of large corporations, he said.

If informal traders were being displaced without the provision of alternative trading sites it was “extremely disconcerting”.

“Due attention ought to be provided to the provision of viable, alternative trading sites for informal traders, and this should obviously be done before their livelihoods are disrupted,” he said.

Businessman Sulayman Arnold, who has seven shipping containers in Delft from which he runs fruit and vegetable shops, said he employed 15 people. None of his containers had been closed, but he said city officials had told him they would “be back”. He accused the city of not doing what was in the interest of the community.

When asked why the city was now taking a tough line, Wiltshire said previously there had not been enough resources to act.

He said the City had responded to complaints from communities and had then moved to city-wide enforcement.

He acknowledged it was “unfortunate” that the enforcement of the law had coincided with the festive season.

Specialised Law Enforcement Services deputy chief Neil Arendse said the city’s department of economic development was looking into creating more designated informal trading areas so as to enable those who applied for business permits to trade there.

— West Cape News

Tags: cityofcapetown, plaas, UCT, uwc

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One Response to “Cape informal trading crackdown “extremely detrimental””

  1. Director-General
    Department of Trade and Industry
    Private Bag X84
    Ms Baneka Dalasile

    Re: Commentry on Draft licensing of Business Bill

    Dare to Believe Trading (DTB TRADING) has been assisting small businesses in various local areas in the Eastern Cape and especially in the Western Cape in legalizing their businesses. Thousands of SME’s have been knocking it our doors for assistance. With the partnering and support of various Government Departments e.g. SARS, DTI, SAPS and many others we trained and educated SME’s owners, employees and local community members (landlords) in legalizing their businesses and the process of registering their businesses, employees and individually for tax, etc.

    While we encouraged the clumping down of illegal trading and the selling of counterfeit goods, we are completely against the passing of the New Licensing of Business Bill.

    80% of all the businesses we inspected are struggling to make R300-00 rand a day. They are selling their goods not with the desire to make great profit but to have a piece of bread at the end of a long business day on the street or behind their windows, on their own tables. They life from hand to mouth. These are very poor people who are already being exploited by the huge sums of registration cost and the thousands of rands they have to fork out for their rezoning certificates (Business License). While the municipality already accepted their applications and fees, they are often intimidated by Police officers or Law Enforcement Officers. Some are even fined continuously for not having a Business License in their possession.

    Poor Foreigners who own or run Tuck-shops are being victimized by corrupt Government officials. Many of these foreigners are to apply several times for business licenses before they are given permits. Some are forced to pay thousands of rands to corrupt officials to secure the success of their applications. This is happening on a daily basis and nothing ever comes from reporting this injustice.

    Currently the municipalities in the Western Cape can’t cope with the amount of applications for business licenses, with the result that applicants are waiting for years to receive their certificates or are simply informed by letter that their application failed.

    According to the Bill, municipalities will have to register businesses for a license within 30 days, renew licenses every five years and with the assistance of appointed inspectors, the SAPS, as well traffic officers, ensure that businesses are compliant with a variety of laws. How they will be able to do this, is going to be a miracle as they currently as stated can’t do it in one year.
    Zodwa Ntuli, the deputy director general for the department of trade and industry, said that the license fee will not be exorbitant as it is not seen as a revenue generation mechanism. Yet currently it is expected from poor shop owners to fork up thousands of rands. In most cases these small business owners have no alternative but to trade illegally.
    Ntuli said that the registration process is not meant to hinder business, but is being put in place to allow municipalities to have a database of which business and hawkers are operating in a certain area. Can this justify the changing of our laws?

    The City should assist small businesses in legalizing themselves and not make it more difficult for them to get a business license.

    DTB have invited Mr. Loen Wentzel on numerous occassions as well as other senior Law enforcement officers to come to our combined workshops with SARS, SAPS, DTI, etc. Since 2012 we are still waiting for a reply. I quest the reason why the City is not for legalizing them, is that the issuing of fines (R1500-00 X 1000 Tuchshops) is a great source of income.


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