The implementation of new By-Laws could force up to 70% of SPAZA shops in Cape Town to close!






Joint Press Release (6 March 2013)


A Coalition of organisations has been formed to challenge the City of Cape Town on its recently promulgated By-Laws that will have a dramatic impact on the continued viability of SPAZA shops in Cape Town’s townships. The coalition consists of the following organisations: Western Cape Informal Traders Coalition, the Somali Association of South Africa, COSATU Western Cape, PASSOP, the National Consumer Forum, the South African Council of Churches, the Scalibrini Foundation and the Legal Resources Centre.

The Coalition believes that despite the fact that the preamble of the By-Laws stating that the intention of theses By-Laws are to stimulate the job creation in the informal sector and make it easier to trade, the application of the provisions of this By Law will have the opposite effect. The Coalition estimates that up to 70% of existing SPAZA shops in the greater Cape Town municipality will have to close because they will not be able to meet the stringent requirements.

The most harmful of these provisions is section 5.2.3 which requires that there should be a separate structure for trading, and that no area used for trading should open into a bedroom or toilet. These provisions clearly targets the most vulnerable of subsistence traders who reside in one roomed RDP houses and one roomed shacks in informal settlements and are therefore automatically disqualified from trading.

The restrictive trading hours will have a dramatic impact on consumers who rely on Spaza Shops for their daily essentials with residents having to commute to formal shopping malls at night and on Sundays to purchase a loaf of bread. The restricted trading hours is of further concern in that many formal shops in residential areas are trading for 24 hours especially forecourt convenience stores, but these shops charge a premium which impoverished consumers cannot afford.

The Coalition has asked the City to place a moratorium on the implementation of these By- Laws to allow for further consultation and broader participation. The Coalition contends that there was insufficient stakeholder participation and that these By-Laws are being implemented without due process and without sufficient dissemination of the new requirements to those directly affected.

The position of the City that there is no longer an opportunity for dialogue and that the consultation process exceeded the statutory requirements is a point of dispute as no correspondence about the implementation of the impending by-laws were received by any of the recognised Informal Traders representative organisations.

The Coalition wishes to draw attention to the social impact that these regulations will have on the informal and formal economy with many poor families being left disempowered and the supply chain upstream already in economic crises. Further job losses especially in the Wholesale industry will become inevitable. With unemployment on the Cape Flats hovering at 40 percent is it morally defensible to penalise those in our communities who display the entrepreneurial initiative to fend for themselves and create more jobs both in the informal and the formal economy?

We ask the question: were these By-Laws designed to benefit the Corporate Retailers who are increasingly encroaching on the townships with the proliferation of shopping malls? Are these unrealistic and unjustifiable requirements placed on SPAZA shops a disguised attempt to eliminate competition for Big Business especially Corporate Retailers? There seems to be a hidden agenda whether it is to satisfy Corporate interest or to target Foreign Nationals most of the new requirements have no logical basis.

The criminalising of the informal sector has severe implications for law enforcement agencies with their focus changing from real crime to the enforcement of ridiculous by-laws. The renewed harassment of informal traders by the police and city officials results in a breakdown of trust and makes informal traders especially vulnerable to criminal elements who extort “taxes” and victimise them without them being able to rely on the police for protection due to the police being seen as part of an oppressive system.

The Coalition wishes to raise the plight of the informal sector in the public domain in order to get support for our call for further consultation and a moratorium on the implementation of the provisions in these By-Laws that have direct impact on the sector. Our appeal is for the respect of Democratic principles of full stake-holder participation and mutual consultation with those directly affected.

We are currently mobilising within the Informal Sector especially SPAZA shops to make submissions on how these By-Laws are most likely to affect them. We are busy establishing a fund to assist Informal Traders to defend their livelihoods in Court should these By-Laws be enforced.

We withhold our right to challenge these bylaws in Court should the City continue refuse to engage us in a meaningful discussion and commit to resolve this matter in an amenable and amicable fashion.


For more information contact any of the participating organisations as indicted below.

Issued by:

The Western Cape Informal Traders Coalition – Riedewaan Charles 083 965 6324

The Somali Association of South Africa – Abdi Kader 084 775 5668

The National Consumer Forum – Imraahn Mukaddam 073 794 6092

COSATU Western Cape – Mike Louw 082 3395 443

PASSOP – Braam Hanekom 084 319 1764

The South African Council of Churches – +27 21 423 4261

The Scalibrini Foundation – Miranda Madikane 083 380 3572

The Black Business Chamber – Sizwe Ngqame 072 109 5259
Khaya Cishe 073 605 3209

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