The department of small business development is working with provincial governments and municipalities to tighten operations of foreign nationals in the informal sector, employment & labour minister Thulas Nxesi said in a recent written reply to a parliamentary question.
“We believe that millions of South Africans can create self-employment in those sectors,” he said.
While no comment could be obtained from the department of small business development, DA small business development spokesperson Jan de Villiers said the issue often came up during meetings of the parliamentary committee on small business development. There had also been a lot of electioneering talk on the issue for some time but nothing concrete had been proposed.
“It is an issue often talked about but the reality is it is just talk,” De Villiers said. “What the minister said is said all the time.”
He said complaints about competition by foreign nationals had been raised countless times during provincial public hearings on the National Small Enterprise Development Bill which aims to create the Small Enterprise Development Finance Agency through the amalgamation of several other agencies. People complained they could not compete with foreign national businesses which did not comply with the law and had an unfair advantage over them.
There have in the past been outbreaks of xenophobic violence against foreign nationals operating spaza shops in various parts of the country and Nxesi has complained about the number of foreign nationals employed in low level jobs that could be filled by South Africans.
“It is easier to blame foreign nationals for not having access to a job or your business not working rather than the real cause which is an incapable state that is not growing the economy and creating the right climate for business to function,” De Villiers said. “There is a place in our economy for legal foreign nationals.”
De Villiers did not believe new legislative amendments were necessary to address unfair competition in the informal sector. Rather existing laws and regulations — for example on work visas, business registration and tax compliance — needed to be enforced.
Replying to a question by IFP MP Siphosethu Ngcobo, Nxesi said his department is introducing a National Labour Migration Policy whose main objective is to protect lower level workers from unfair employment competition.
According to the department of employment & labour, the National Labour Migration Policy will be complemented by a small business intervention and enforcement of a list of sectors where foreign nationals cannot be allocated business visas. Amendments to the Small Business Act will limit foreign nationals establishing SMMEs and trading in some sectors of the economy.
Also in the pipeline is the Employment Services Amendment Bill which was released for public comment in February 2022. Department spokesperson Teboho Thejane said Monday that the department had received correspondence from that state law adviser last week on the bill and aimed to submit it to the first cabinet meeting of 2024 “so the process can unfold”.
Nxesi said in his reply that the bill “will regulate the manner in which foreign nationals can be employed. It impose(s) conditions or obligations to transfer skills during the limited employment duration, it will restrict the total numbers of foreign nationals that can be employed at any point in any establishment and will strengthen the role of both employment inspectors and home affairs immigration officers in addressing the problem of undocumented foreign nationals employed in various sectors of the economy”.
The bill will impose quotas on the number of documented foreign nationals with work visas who can be employed in major economic sectors such as agriculture, hospitality, tourism and construction. Employers will have to ensure there are no qualified South Africans who can do the job.
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