Low participation in the City’s Spaza Shop Fund continues to limit support for township traders, as compliance challenges, costs and regulatory barriers keep many small businesses out of the system.
The R500-million fund was introduced in 2024 following a food safety crisis that left more than 20 children dead after consuming contaminated food bought from spaza shops, prompting stricter registration and compliance requirements across the sector.
Spaza shop owners were required to register their businesses or risk closure, with deadlines initially set for December 2024 and later extended to February 2025.
However, uptake remains low. Of the 13,500 spaza shops identified across Johannesburg, only about 200 have applied for the fund, raising concerns about access, awareness, and compliance costs.
To address these gaps, the City hosted the Gauteng Spaza Shop and Informal Traders Summit & Expo yesterday, which provided guidance, training, and practical support to traders.
Compliance and access hurdles for traders
The summit comes amid ongoing tension between informal traders and the City over trading regulations and space allocation.
A recent Johannesburg High Court ruling involving inner-city traders highlighted confusion around designated trading areas, after traders were removed for operating outside approved zones. Many argue that allocated spaces are not commercially viable, while the City maintains that bylaws must be enforced.
Stringent registration requirements remain a barrier, particularly for traders without proper documentation, valid permits, or approved business locations. Costs for renovations, health and safety equipment, and permits further limit participation.
In Meadowlands Hostel, about 30 spaza and parcel shop owners are affected by zoning challenges. While their shops meet health and safety standards and have been serviced by the government for decades, the Department of Land Use has not approved their locations. Owners say the area is also flooded by foreign traders operating outside formal regulation, adding further pressure on compliance.
On the ground, traders voiced practical challenges.
Ntombizodwa Mzombe, a spaza shop owner, has applied to the fund since 21 August 2025 but has not received any response.
“I submitted my application long ago, but nobody has called me. I attend these events hoping to get guidance and funding, but it feels like nothing is happening,” she said.
Mthokozisi from Alexandra, an informal street trader, highlighted gaps in access to information.
“We don’t know where to go for permits or how to get guidance. Many of us are trying to comply, but the process is confusing and unclear,” he said.
A new spaza shop owner attending the summit for the first time said she hoped the government would assist with registration and support her goal of creating jobs for young people in her community.
Some traders also questioned why the summit was held in a suburban area rather than in townships, saying this limits participation for those most in need.
City commits to support while enforcing standards
Mayor Dada Morero stressed that compliance is non-negotiable.
“The gaps raised at the summit were mainly about compliance. Some owners requested waivers, but there is no compromise when it comes to standards. Full compliance protects both traders and their customers.”
Requirements include submitting building plans, obtaining municipal approvals and, in some cases, rezoning properties, all of which come at a cost for small businesses.
MMC for Economic Development Nomoya Mnisi said the City is committed to supporting township businesses while ensuring safety and order.
“Spaza shops are critical to the township economy, and we want to ensure they operate in a safe and compliant environment,” she said.
Officials acknowledged the ongoing tensions around trading spaces, immigration documentation and enforcement, and said future initiatives will focus on practical guidance and accessibility to help more township traders access the fund.
The summit reflects the City’s ongoing effort to formalise the informal sector, support township businesses, and strengthen the local economy.
The following website can be used to apply for funding:
Spaza Shop Support Fund – www.spazashopfund.co.za
NEF – www.nefcorp.co.za
SEDFA – https://systems.sefa.org.za/SMMEPortal/
The contact details for the Spaza Shop Support Fund Call Centre are 01 1 305 8080 or via email: Spazafund@nefcorp.co.za
Contact details for the NEF Call Centre are 0861 843633, SEDFA Call Centre 012 748 9600 or an email can be sent to helpline@sefa.org.za.
