Municipality Accused of Prioritising Foreign-Owned Spaza Shops as South Africans Register on Behalf of Foreigners

Newcastle – ActionSA in Newcastle has levelled serious accusations against the Newcastle Municipality, alleging that the registration of spaza shops owned by foreign nationals is being prioritised over those owned by South African citizens.

This claim, highlighted by ActionSA Newcastle councillor Zwe Nxumalo, stems from observations made on the municipality’s official Facebook page. The allegations come amidst a 21-day registration deadline imposed by President Cyril Ramaphosa in response to a recent foodborne illness outbreak that claimed the lives of over 20 children, primarily linked to food purchased from spaza shops.

Nxumalo expressed his deep concern, stating that if the allegations prove true, it would be unacceptable and undermine the interests and livelihoods of South African citizens. He issued a formal request for transparency and accountability, demanding clarification on the registration criteria and assurances that stringent inspections are being conducted to ensure the safety of food products sold in registered spaza shops.

“In the interest of transparency and accountability, we request that you urgently address these accusations. And also provide clarity on the criteria being applied in the registration process. Additionally, we seek reassurance that the municipality is conducting strict inspections to ensure that registered spaza shops are not stocking contaminated or unsafe food products that could endanger public health,” Nxumalo stated.

Going further, Nxumalo urged the mayor to adopt a policy that reserves spaza shop opportunities exclusively for South African citizens, believing this would empower local entrepreneurs and benefit the community.

“We urge Newcastle Municipality to adopt a similar policy that safeguards the economic opportunities of South Africans. Therefore, we demand that the current spaza shop registration process be halted immediately,” he declared.

He warned that failure to address these concerns would erode public trust in the municipality. “We trust that you will act with urgency and commitment this matter demands. And failure to do so will undoubtedly erode public confidence in the municipality’s commitment to serving its residents,” he added.

However, Newcastle municipality mayor Xolani Dube strongly refuted these allegations. He clarified that the municipality’s role is not to open spaza shops but to facilitate the establishment of small businesses by providing suitable land and an enabling environment. He highlighted that economic development initiatives are underway, seeking support from government, private companies, and NGOs. Dube presented data indicating that while 76% of spaza shops in the area are operated by foreign nationals, 33% are operated by South African citizens.

“It’s essential to state that data is still trickling in from the field workers for further processing. And these figures do not represent a complete scenario. Based on the above, it is evident that proportions reveal that more is owned by foreign nationals compared to SA citizen. The municipality has prioritised all tuck shop operators regardless of their nationality. This is just for statistical recording at this juncture,” Dube explained.

Meanwhile, concerns about the 21-day registration deadline are emerging from other areas. In Durban, some spaza shop owners expressed anxieties about meeting the deadline, citing a complex and time-consuming registration process.

One owner complained, “I have not yet registered. The process is too long and stressful. There are too many documents required, and the 21 days is too short. I stay in an area ruled by a traditional leader and getting proof of residence is an issue. There are many other documents they want, and you can’t get urgently. They need to extend the dates.”

Another voiced similar concerns, stating, “I run a fruit and vegetable business in a container but due to the demarcation I have to move it to a more suitable place according to municipality. I don’t have a place and money to do so. I fear I might lose my only source of income.”

Despite these challenges, the Ethekwini Municipality is actively campaigning for compliance within the spaza shop industry, which contributes approximately R55 billion to the metro’s GDP and employs over 260,000 people. They have received over 2,500 new registration applications, while the City of Cape Town reported 4,000 applications and Gauteng received 13,000.

The registration drive, prompted by over 800 reported incidents of food poisoning linked to pesticides, including the highly hazardous chemical Terbufos, resulting in at least 22 child deaths, has created a complex situation requiring careful management and transparent communication to ensure fairness and compliance.