The Black Business Council (BBC) has weighed in on South Africa’s revised Business Licensing Bill of 2026, cautioning that while regulatory frameworks are necessary, they must not create barriers that prevent small businesses from obtaining licenses.
Kganki Matabane, CEO of the Black Business Council, said the organization supports the bill in principle but has submitted proposals to ensure it serves small enterprises effectively. His comments come as the Department of Small Business Development invites public comment on the legislation, which President Ramaphosa says will streamline uniform licensing across municipalities.
However, the bill faces significant opposition. Civil society groups, the Centre for Development and Enterprise, and the DA—a key partner in the National Government of Unity—have raised concerns that requiring online sellers, informal traders, and small businesses to renew local licenses every five years could enable municipal corruption and bureaucratic red tape.
Matabane acknowledged these concerns, particularly regarding municipal capacity. “Most municipalities are struggling with providing basic services,” he noted. “When you give municipalities those powers, they may face challenges.” He suggested that provincial or national government should initially assist municipalities with processing applications.
To address implementation concerns, the Black Business Council has proposed that first-time license applicants automatically receive a two-year temporary license while their applications are processed. “Most businesses fail within the first two years,” Matabane explained, noting this approach would prevent unnecessary burdens on ventures that may not survive long-term.
The Council also proposed that ministers should have the authority to designate certain business types or geographic areas exclusively for local entrepreneurs. Matabane stated that barriers to entry for small businesses should not be so high that foreign nationals dominate sectors intended for local economic participation.
Addressing the spaza shop sector specifically, Matabane argued that current challenges stem from a lack of regulation, not excessive oversight. He referenced recent incidents of food poisoning linked to unregulated outlets selling contaminated products. “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 said. “We need a middle way: register these companies, register the small businesses, but don’t impose more regulations that block them.”
Effective enforcement, Matabane emphasized, requires adequate inspection capacity. He urged municipalities to appoint more inspectors and partner with business associations to bolster monitoring capabilities. “If you have legislation that is not monitored effectively, you’re running a risk of disaster where people will just do as they wish,” he warned.
On licensing costs, Matabane stressed that fees must remain minimal to avoid deterring entrepreneurship amid South Africa’s 45% unemployment rate. He also called for municipalities to incorporate small business support into their annual budgeting, including subsidizing levies when small traders use state-owned land—similar to support provided to larger enterprises.
The Council further proposed distinctions between online and brick-and-mortar businesses regarding funding structures. “Financial institutions know how to deal with funding a physical business but struggle to fund intellectual or online-type businesses,” Matabane said, noting that operating models differ significantly and require tailored financial approaches.
Regarding the controversial R500 million spaza shop funding initiative—allocated to approximately 1,300 businesses—Matabane said the amount is insufficient if the goal is meaningful job creation and economic growth. The Black Business Council is monitoring the allocation process and plans to engage with the minister and department following media reports on the distribution.
Matabane concluded by reaffirming the need for balanced regulation: frameworks that protect consumers and support local enterprise without stifling the entrepreneurial activity essential to addressing South Africa’s economic challenges.