Business lobby groups are demanding accountability from departments to tackle the numerous obstacles that companies of all sizes encounter when doing business with the state. They want ministers and public officials to be taken to task for not cutting red tape. This follows an announcement by President Cyril Ramaphosa that a team headed by Small Business Institute chairperson Sipho Nkosi will review regulations that are unduly complicated, costly and difficult to comply with.
The team will identify priority reforms for this year, including mechanisms to ensure that government departments pay suppliers within the required 30 days. It will work with departments and agencies to unblock specific obstacles to investment and growth. And, it will also support current initiatives to simplify processes relating to property legislation, cross-border trade and construction permits.
Business Unity South Africa (Busa) and the National Union of Municipal Chambers of Commerce and Industry (NUMCCI) told Vutivi News that it would not be an easy task for the red tape team, which would be situated in The Presidency.
Busa CEO Cas Coovadia said there were numerous municipal bylaws and regulations that needed to be reviewed. “The Presidency would have to look at all departments responsible for issuing any licence to operate businesses and other permissions, to ensure that these are streamlined, efficient and there is no duplication,” Coovadia said.
“The principle should be to minimise (the) requirements businesses need to meet to start and grow businesses, particularly in areas where government licensing and permission is sought after.” Coovadia also said that Ramaphosa must ensure that ministers toed the line. “Relevant government departments must demonstrate the commitment and capability to make necessary changes to implement recommendations coming out of the task team in The Presidency,” he said.
“Government, as a whole, must have a mindset that facilitates business creation and growth.” NUMCCI president Albert Jeleni believes a review of regulations is not needed, but rather accountability from the Small Business Development Department and the Trade, Industry and Competition Department. He told Vutivi News that the issue of red tape would not solve itself unless there were targets set for departments and state institutions.
“What is needed is monitoring compliance and accountability from those in charge of developing SMMEs,” Jeleni said. “Corruption and fraud flourishes in the face of regulations because the moment we have regulations in place, fraudsters take the opportunity to extort bribes from businesspeople. “What is stopping development and creating more red tape is not the lack of regulation, but the lack of oversight to safeguard against this level of corruption in institutions like the Small Enterprise Development Agency and the Small Enterprise Finance Agency,” he said.
Jeleni also said that department heads must be monitored to ensure that targets were met, and if they failed, they should be axed. “What government must be aware of is that in the business world, if a CEO fails to reach the target that the company sets, they are fired,” he said. “We need to hold the state officials to the same standard so that this can change.”