South Africa’s proposed Business Licensing Bill of 2026 has sparked debate over how best to regulate small enterprises without stifling entrepreneurship, with the Black Business Council calling for a measured approach that protects both consumers and emerging traders.
Kganki Matabane, CEO of the Black Business Council, confirmed the organization supports the legislation in principle but has submitted targeted proposals to strengthen its implementation. The Department of Small Business Development is currently accepting public submissions on the revised bill, which President Ramaphosa says will create uniform licensing standards across all municipalities.
Despite this stated goal, the bill faces pushback from multiple quarters. The Centre for Development and Enterprise, the DA—a coalition partner in the National Government of Unity—and various civil society organizations have warned that mandating license renewals every five years for online sellers, informal traders, and micro-enterprises could fuel municipal corruption and administrative bottlenecks.
Matabane acknowledged these implementation concerns, noting that many municipalities already struggle to deliver basic services. “When you give municipalities those powers, they may face challenges,” he said. To ease the transition, he proposed that national or provincial government provide temporary support to help local authorities process applications.
A key recommendation from the Black Business Council is that first-time license applicants automatically receive a two-year temporary permit while their full applications are reviewed. Matabane explained this accounts for the reality that many startups do not survive beyond their initial years, preventing unnecessary regulatory burden on short-lived ventures.
The Council also urged that ministers be empowered to designate specific business categories or geographic zones exclusively for local entrepreneurs. Matabane emphasized that entry barriers for small businesses should remain accessible, expressing concern that foreign nationals currently dominate certain informal sectors intended to uplift South African citizens.
Turning to the spaza shop sector, Matabane argued that recent challenges—including public protests targeting foreign-owned outlets and incidents of food poisoning from contaminated products—stem from insufficient regulation, not excessive oversight. “Any person who comes to South Africa as a refugee or claiming to be a refugee can start a business and that business is not even registered,” he noted. He called for a balanced framework: mandatory registration for all small businesses, paired with streamlined processes that avoid bureaucratic obstruction.
Effective enforcement, Matabane stressed, hinges on inspection capacity. He urged municipalities to recruit additional health and compliance inspectors and to collaborate with business associations to supplement monitoring resources. “If you have legislation that is not monitored effectively, you’re running a risk of disaster,” he warned, adding that unannounced inspections are essential to ensure food safety and regulatory compliance.
On licensing costs, Matabane insisted that fees—including zoning and registration charges—must remain minimal. With unemployment at 45%, he argued that cost should never deter legitimate entrepreneurship. He also called on municipalities to embed small business support into annual budgets, including subsidizing levies when informal traders operate on state-owned land—mirroring support extended to larger commercial enterprises.
The Council further recommended distinct funding frameworks for online versus brick-and-mortar businesses. “Financial institutions know how to deal with funding a physical business but struggle to fund intellectual or online-type businesses,” Matabane observed. He noted that digital enterprises primarily require storage and connectivity, whereas physical outlets need infrastructure, utilities, and foot traffic—warranting tailored financial products.
Regarding the R500 million government funding initiative for spaza shops—reportedly allocated to approximately 1,300 businesses—Matabane said the sum falls short of what is needed to drive meaningful job creation or economic expansion. The Black Business Council, whose members have applied for the funding, is tracking the distribution process. Following media reports on the allocation, Matabane confirmed the Council plans to engage directly with the minister and department to verify that funds reach intended beneficiaries and that robust accountability mechanisms are in place.
Throughout his remarks, Matabane reiterated a central theme: regulation must serve as an enabler, not a barrier. “Register these companies, register the small businesses, but don’t impose more regulations that block them,” he said. As public consultations continue, the Black Business Council’s proposals aim to help shape a licensing framework that safeguards public health, supports local enterprise, and responds pragmatically to South Africa’s urgent employment needs.
