Free State moots bill to limit foreign business ownership

The Free State government is looking to overhaul the province’s economy, if details of the mooted economic bill are anything to go by.

The department of small business development, tourism and environmental affairs (Destea), along with the legislature, is criss-crossing the province selling to the residents its Free State Integrated Local Economic Development and Transformation Bill.

One of the main features of the bill, which is in the public consultation phase, is to limit ownership by foreign nationals in the province’s economy and foster more localisation.

“This bill seeks to facilitate and promote inclusive economic growth along a transformative paradigm in order to build a cohesive and an equal society, which is underpinned by the economy with diversified ownership patterns,” Destea MEC Makalo Mohale said.

If the bill passes into law as it stands, it will introduce the following changes:

  • Local municipalities will be required to maintain ownership quotas of not more than 20% of foreign ownership.
  • The big retailers will be required to have a 30% quota of locally produced goods on their shelves.
  • The MEC will be expected to formulate, coordinate and implement policies and programmes for promoting and developing township-based enterprises.
  • Every municipality in the province must put in place an investment incentive policy aimed at promoting investment.

The bill also lists 28 economic activities reserved exclusively for people with “permanent residency status”.

The targeted businesses include bars and nightclubs, chisanyamas, cellphone repair shops, courier services, beauty salons, tuck shops, workshops of panel beaters and mechanics, as well as brick manufacturers.

Petrol filling stations, funeral undertaking services and equipment hiring services are also included in the list.

Mohale said in March, when he tabled his departmental budget for 2022/23 at the Free State legislature’s sitting in the Fourth Raadsaal, vowed to ensure that the government will spend its money for specific commodities on local manufacturers.

Free State had spent more than R37-billion on goods and services between 2015 and July 2021.

Gauteng premier David Makhura last month signed into law the Township Economic Development Bill, recently passed by the provincial legislature.

The law will allow the government to lease land to local SMMEs through the Rapid Land Release Programme for a period of 99 years, among other features.

The Gauteng law also mandates the provincial government to dedicate 40% of its procurement spend to township-based enterprises.

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