LUNCEDO MTWENTWE | Save our struggling spaza shops

South Africa’s township spaza shop has long been a symbol of resilience and one of the clearest entry points into black entrepreneurship. These small family-run businesses fed communities, created jobs and gave many South Africans their first chance at owning a business.

Today, many of them are struggling to survive.

Across townships in Midvaal, Khayelitsha, KwaMashu and Soshanguve, two different realities are playing out on the same street. One South African-owned shop has limited stock, rising costs and shorter trading hours because of safety concerns and pressure on margins. Next door is a fully stocked store operating late into the night, selling goods at prices local traders say they cannot match.

Too often, this debate gets reduced to foreigners vs locals. But that misses the issue. Many township entrepreneurs are trying to compete without proper support, supply chains or access to affordable finance.

At the same time, concerns are growing around an informal retail economy operating outside proper oversight.

Communities across South Africa have raised alarm over counterfeit products, expired food, altered expiry dates and illicit cigarettes being sold through some township retail channels. Authorities have conducted raids and confiscated goods, but the problem continues.

According to the Transnational Alliance to Combat Illicit Trade, South Africa loses more than R100bn annually to illicit economic activity, with township retail networks increasingly becoming part of that conversation.

Frustration has intensified following recent allegations of spaza shop intimidation and syndicate activity, including a recent kidnapping case.

Violence and xenophobia can never be justified. Criminality must be dealt with firmly. But South Africa cannot ignore the economic frustration building in township communities.

Many local traders argue they are competing against businesses with stronger buying power, co-ordinated supply chains and lower operating costs. Others say regulations are enforced unevenly and that small businesses are left to navigate complex systems alone.

The frustration is not only about competition. It is about feeling abandoned by systems meant to support small enterprises

For many township business owners, the frustration is not only about competition. It is about feeling abandoned by systems meant to support small enterprises.

In Emfuleni, spaza shop owners Joyce Radebe and Pule Seroto say they have been waiting nearly two years for operating licences. Without registration, many township businesses remain locked out of funding opportunities and support programmes.

Compliance itself has become another barrier. Small township traders are often expected to meet the same administrative requirements as much larger retailers. For businesses already dealing with rising electricity costs and expensive stock, the process becomes discouraging and costly.

The result is an uneven playing field where many South African-owned businesses remain trapped in informality while larger and better organised operators continue to expand.

There are also growing concerns around unlawful card transaction charges in some township shops. Consumers report being charged extra fees when paying with bank cards, despite regulations prohibiting merchants from passing card transaction costs directly onto customers.

For households already under financial pressure, even an extra R2 or R3 added to daily purchases quickly mounts up.

The government has introduced interventions such as the spaza shop support fund and township economy programmes, but many traders say these have not helped much.

There was a nationwide push in 2024 for spaza shops to register and comply with municipal bylaws. While some complied, many foreign-owned spaza shops disappeared for a few months before returning and operating as normal again. This has raised concerns about weak enforcement.

What township businesses need now is practical support. One example is a manufacturing company in the Vaal that has started a programme to assist spaza shops with compliance and access to finance. More such initiatives are needed to help township traders compete.

That starts with simpler licensing processes, proper enforcement of trading laws and better access to finance. Small traders also need co-operative buying structures that allow them to purchase stock at competitive prices.

Training matters too. Many township entrepreneurs need support in stock management, pricing, bookkeeping and compliance.

Competition itself is not the problem. When the rules are fair and applied equally, competition benefits consumers and strengthens local economies.

The spaza shop is more than just a place to buy bread and airtime. These businesses are woven into township life. They extend informal credit to struggling families, support funerals and school events, and keep money circulating within communities.

If South Africa is serious about inclusive economic growth, township traders cannot be expected to navigate these pressures alone. What they need is practical reform, consistent enforcement and support that reaches the ground.

Right now, too many local entrepreneurs are not competing on equal terms, but simply trying to survive in a race they were never equipped to run. If South Africa is serious about inclusive and fair growth, township economies must move from the margins of policy to its centre.

• Luncedo Mtwentwe is MD of Vantage Advisory and host of the SAICABIZ Impact podcast