By Jane Sithole
Government should listen when legislation intended to support entrepreneurs threatens to make their lives harder. The legal concerns raised about the Business Licensing Bill reinforce warnings I put in my letter to the Minister.
On 2 June 2026, I wrote to Minister Ndabeni stating plainly: “I have carefully considered the Business Licensing Bill and remain firmly opposed to its introduction in its current form.”
That position was informed by the realities facing small businesses and by serious concerns about the powers the proposed legislation would place in government’s hands.
The Bill has now been sent back following legal scrutiny.
The department’s portfolio committee progress presentation of 7 October records target not met and substantive concerns raised.
Those findings substantiate key elements of my original assessment, particularly the justification for restrictions on who can and who can’t operate a legal business in SA, the breadth of ministerial discretion and the protection of lawful businesses.
This is an important victory for accountable lawmaking and for entrepreneurs whose livelihoods depend on fair, predictable rules.
Broad powers require more than good intentions
One of the most troubling provisions would allow the Minister to decide who can or can’t do legal business in SA. Who can and can’t participate in the economy.
Concerns were raised that the reservation power under clause 17(1) remains potentially overbroad and insufficiently constrained because the legislation does not clearly identify the categories of activities that may be reserved.
These are fundamental questions about who may participate in the economy and how far executive power may reach.
In my June letter, I warned: “Furthermore, the provisions relating to non-citizens are, in my view, constitutionally questionable and potentially discriminatory.”
I also questioned the implications of allowing a Minister to prohibit participation in particular sectors despite existing immigration and visa frameworks.
The legal findings reinforce the need to address those concerns before proceeding.
Government must enforce immigration law and act against unlawful business practices. But restrictions affecting lawful businesses require proper justification and clearly defined limits.
Entrepreneurs deserve protection from arbitrary decisions. Shortcomings were identified in the proposed exemptions under clause 17(4).
The legal advise called for clearly formulated guidelines and proper consideration of the rights and interests of affected lawful businesses and applicants.
That matters because a business cannot plan, invest or employ people confidently when its future depends on loosely defined ministerial decisions.
Small businesses often operate with narrow margins. Regulatory uncertainty can threaten an owner’s income, employees’ jobs and the families who depend on both.
Legislation should provide certainty. It should establish clear rules, transparent procedures and meaningful safeguards.
The wider objections remain
In my letter, I wrote: “This Bill simply introduces an additional layer of bureaucracy and red tape, increasing compliance burdens for entrepreneurs, informal traders, cooperatives and small businesses.”
Existing legislation and municipal by-laws already regulate many licensing, registration, health and safety matters. Government must demonstrate why those laws are insufficient before imposing further requirements.
I also warned about municipal capacity. Councils struggling to fulfil existing responsibilities cannot simply be assigned more complex duties without the personnel, expertise and resources to carry them out.
Entrepreneurs will bear the consequences through delays, inconsistent decisions and opportunities for corruption.
My position remains the one I expressed in June: “Our focus should be on reducing red tape, improving municipal efficiency, strengthening enforcement of existing legislation where necessary, and creating an environment in which businesses can start, operate and grow with certainty and confidence.”
SA needs a Red Tape Reduction Act, an Act will hold regulators accountable, while retaining necessary sector-specific protections.
We must simplify processes and remove duplication.
The Legal opinion vindicates key warnings that deserved attention from the outset. Government should now act on them.
Entrepreneurs need a state that enables them to build businesses and create jobs. Every new regulatory burden must earn its place.
Jane Sithole is Deputy Minister: Department of Small Business Development.
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