Only 387 out of 3 269 applications have been successfully processed for the R500m spaza shop support fund under the Department of Small Business Development.
This was revealed by the department during a meeting of parliament’s portfolio committee on small business development.
“The portfolio committee on small business development has issued a call to all South Africans who own registered spaza shops and food-handling businesses to apply for funding from the R500-million Spaza Shop Support Fund under the Department of Small Business Development,” said portfolio committee spokesperson Justice Molafo.
“The committee made this call after a briefing from the department on the disbursement of the fund on Wednesday, whereby it learnt that only 387 out of 3 269 applications have been successfully processed since the fund was launched in April this year,” said Molafo.
According to Molafo, the department said that although the processing of applications is ongoing, most unsuccessful applications were due to non-compliance with the requirements, primarily proof that the business is registered in the owner’s municipality.
“The chairperson of the committee, Ms Masefako Dikgale, said although the fund is relatively new, the committee expected the number of applications to be much higher than the figure reported by the department,” said Molafo.
Nationwide roadshow planned
Dikgale said the fund’s recipients are able to use the grant for business refurbishment, wholesale aggregation, and non-financial support, such as skills training, regulatory compliance, and capacity building.
“We expected our people from townships and villages throughout the country to take advantage of this fund to uplift their businesses and create jobs,” said Dikgale.
“Funds of this nature are there to make a real impact in the lives of small business owners who have a collective duty to help government grow the economy.”
Nonetheless, Molafo said the committee welcomed the news that the department is embarking on a nationwide roadshow to explain the application process and documents required when applying for funding.
“The committee understands from the oversight visits conducted that most spaza shop and food-handling business owners face serious challenges with limited access to capital, high operating costs, and lack of bulk purchasing options, which have the benefit of optimising revenue and cost reduction,” said Molafo.
Dikgale said that the committee will continue to monitor the implementation of the fund to ensure it achieves the desired objectives.
“The issue of spaza shops is very serious. It has the potential to uplift our people from poverty and create employment in the villages and townships.
“We want to see our spaza shops growing from this funding to become self-sustainable,” said Dikgale.
Spike in food-borne illnesses
Spaza shops were thrust into the limelight in 2024 when the country experienced a rise in reported cases of food-borne illnesses and deaths.
Countless people, particularly children, became severely ill and even died after consuming contaminated food.
It was discovered that some of the contaminated food items were purchased from spaza shops and street vendors.
Since the beginning of September 2024, there have been more than 890 reported incidents linked to foodborne illnesses. More than 20 children have died since then.
In October, six children died in Naledi, Soweto, from allegedly eating snacks bought from a spaza shop.
The children were killed by a highly hazardous chemical used as a pesticide known as terbufos.
Terbufos is an organophosphate chemical that is registered in South Africa for agricultural use. It is not allowed to be sold for general household use.
In November, in response to the foodborne illnesses scourge, President Cyril Ramaphosa said all spaza shops and other food-handling facilities must be registered within the municipalities in which they operate within 21 days from November 15.
The initial deadline was December 15, 2024, and was extended to December 17 before it was revised to a deadline of February 28, 2025.
