They don’t care if it’s red, black or white, so long as it’s tape that tapes us down.
They don’t care how often they promise ‘less red tape’, so long as they impose more.
They don’t care how often they say they want investment and enterprise, so long as their red tape smothers it.
Maybe that is about to change after President Ramaphosa’s latest promise. Since countless promises by him and other politicians at all levels of government to cut ‘red tape’ always coincided with more, why should we believe him this time?
Something about it seems different. There was a sense of urgency if not desperation when he said at the ANC’s 111th birthday celebrations, “We must create our towns, our rural areas, as places of economic activity. The informal sector is held back by too many … laws, and I’m saying to our local authorities, ‘Let us free the economic energy of our people. Let us allow our people to trade (and) to engage in economic activity …”.
If he delivers, it will have huge benefits for “township” and “rural” communities that have been victimised for a century.
I am proud to have been directly involved with all positive developments historically, even though every measure was followed by regression. Promises to liberate consumers and people who serve them, started under apartheid when then Minister Eli Louw introduced the 1988 Temporary Removal Restrictions Act. After a brief respite, it was followed by more permanent restrictions. Then there was the 1991 Businesses Act, which promised freedom for small, medium and micro enterprises (SMMEs). Again, after a lull, the opposite happened.
Broken post-apartheid promises emulated their pre-94 experience. During the late 1980s, the regime created the Small Business Council, which was liquidated after being unfunded. It was followed by the 1996 Small Business Act 102 of 1996, intended to end the municipal war against SMMEs. It was and remains sabotaged by the exploitation of a loophole.
The grandest post-apartheid broken promise has been the creation of a dedicated Small Business Department and Ministry (DSBD). It was still borne because it could not “interfere” with departments that pressed on undeterred. All the DSBD was allowed to do was try to help SMMEs strangled by the rest of government.
The government is like a mother with a baby on her lap. With one hand she feeds it; with the other she strangles it.
Will Ramaphosa get the mother to stop throttling the baby? If he means what he says, he will face a more daunting challenge than he knows. There are (roughly) 28 central government departments, 9 provinces (each with 10 departments), 278 municipalities (each with 10 departments), and other regulatory organs of state. In other words, he wants to get 3000 entities, all in love with power, to give it up. A tall order for Ramaphosa.
Apart from wanting 3000 power-hungry entities to relinquish power, the President seems to have little understanding of what the “informal sector” is. There is no such thing.
“It” is neither a sector nor informal.
The so-called “sector” is as formal as his Presidency, and active in all sectors of the economy. Failure to appreciate this has devastating impacts. Whilst being neither a sector nor informal, it is oppressed by around 500 laws, policies and practices. It is more accurately the “banned sector”. It is a bird trying to fly with a block on its legs.
A prominent example of perverse impacts is the Johannesburg council. It wages war relentlessly against SMMEs. It tried total prohibition, but we (in the old Free Market Foundation) managed to secure an urgent Constitutional Court ruling against it. Now, as the President urges them to back off, they are pressing ahead with a proposed by-law that seeks to “formalise street traders” by stifling hi-tech licencing, herding into “markets”, and related controls, which victims will get to know when hounded or bribes are demanded by police.
Perhaps the most perverse irony is that no one wants to control street “trading”. Having asked dozens of regulators why none said: “because they trade”. Why then? “Oh, because of littering, illegal immigrants, obstructing pedestrians, disrupting traffic, lack of ablution facilities, drugs, bribes, street crime”, and so on. Since trading is never the problem, a “Street Trading” by-law is non-sensical. Every objection is subject to separate controls, which are – as required by our Constitution – equally applicable to all people, whether or not they trade.
There is no plausible case for “street trading” measures. What they need, if anything, is Public Open Space policies.
Another myth is that regulators regulate traders. No, they do not. They regulate consumers.
When they pretend to control, relocate and ban traders, what they are really doing is imposing high prices and inconvenience on consumers, especially the “poorest of the poor”. They violate the right to accessible and affordable goods and services.
What should President Ramaphosa do to end broken promises? He must invoke the support of experts with their feet on the ground, such as the African Council of Hawkers and Informal Businesses (ACHIB). He must be clear about why “removing red tape” seldom happens. Is he?
Our beloved and beleaguered country needs success at last, and we stand ready to do our very best to help him help others.
Supplied by the Leon Louw Freedom Foundation
BUSINESS REPORT