Pretoria - The South African Chamber of Commerce and Industry (Sacci) has welcomed the publication of the Guidelines for the Reduction of Municipal Red Tape, calling it a “significant step” towards creating a supporting environment for small business growth in the country.
“The implementation of these guidelines will be a significant step towards creating a supporting environment for SME growth across the country. Redundant, burdensome and inflexible regulations on a local level of government are often the biggest impediment to broad economic growth and job creation,” Sacci CEO Neren Rau said on Wednesday.
Earlier today, Trade and Industry (dti) Minister Rob Davies launched the small, medium and micro enterprises (SMMEs) Guidelines for the Reduction of Municipal Red Tape. The guidelines serve as a practical implementation framework to reduce local government or municipal red tape in support of SMMEs.
The guidelines have been developed by the dti in partnership with the Department of Cooperative Governance and Traditional Affairs (Cogta), and are supported by the South African Local Government Association (Salga).
“The guidelines are an ideal foundation to inform regulation on a provincial and national level as well. Sacci agrees with Minister Davies that cutting red tape is not synonymous with deregulation.
“However, the root of all red tape is regulation. This means all levels of government need to be pro-active to stop red tape from entering the economy to start with, as opposed to cutting the red tape once it has caused damage to economic activity. The guidelines can therefore stop and cut red tape on all levels of government,” explained Rau.
Rau said that the urgency of the guidelines was apparent, given the damage caused by red tape to economic development.
“The estimated annual cost of red tape to South African SMMEs is R80 billion and the recent World Economic Forum (WEF) survey placed South Africa in 123rd place in terms of burden of government regulation.
“Sacci is heartened by the joint initiative between the dti, Cogta and Salga, and looks forward to the implementation of the guidelines in municipalities across the country,” said Rau.
Speaking at the launch of the guidelines in Midrand, Davies said that research has shown that of every seven registered small businesses that are opened in South Africa in a year, only two will still be in existence a year later - which is a little bit higher than in most countries in the world.
This, said the minister, was telling that running a business required effort, sacrifice and vision, among others. Active support, mentoring and incubation are elements that are necessary in ensuring the success of business, he added. The dti is involved in mechanisms to support this.
Red tape can be defined as rules, regulations and/or bureaucratic procedures and processes that are excessively complex and impose unnecessary delays, inaction and or costs that exceed their benefits. Red tape further has undesirable economic, business or social impacts. - SAnews.gov.za
