New law to bar foreigners doing business in Gauteng townships

New law to bar foreigners doing business in Gauteng townships

Gauteng will soon bar foreign nationals from doing business in the province’s townships unless they obtain permanent residency status according to a newly proposed law.

The Gauteng provincial government wants to stop foreign nationals from operating some businesses in the townships as part of plans to revitalise the economy in a number of the region’s most densely populated areas.

A proposed new law drafted by the Gauteng economic development department and premier David Makhura’s policy unit will reserve certain economic activities in townships for South African citizens and people with permanent residency status.

The draft Gauteng Township Economic Development Bill released this week does not identify the specific businesses it is targeting.

However, the proposed law will only assist township-based enterprises in agriculture, construction, manufacturing, transport, communications, tourism and services if they are owned by South African citizens or holders of permanent residency status.

Stakeholders making submissions on the bill will have to suggest the sectors and sub-sectors that should be reserved for South Africans and permanent residents.

Permanent residency is obtained by foreign nationals who have been residing in the country on the basis of their work permits for a minimum of five years, their spouses and the dependants of South African citizens/permanent residence permit holders.

It can also be obtained by foreign nationals who intend to establish a business in the country and are financially independent, among other criteria.

According to the draft bill, there will be a percentage of provincial government procurement set aside for township-based enterprises.

The proposed law will also establish specific procurement rules and programmatic support to allow the government and its main contractors to buy from a large group or groups of township-based enterprises.

The government’s contractors will be compelled to spend a certain percentage of their procurement budgets on town-based enterprises, entrepreneurs and co-operatives.

A year ago, Justice and Correctional Services Minister Ronald Lamola revealed that the government was developing tough legislation to prevent foreign nationals from operating in certain sectors of the economy but denied that this was protectionism.

At the time, Lamola said his small business development counterpart, Khumbudzo Ntshavheni, was “developing legislation in relation to foreign nationals doing business in our country and which sectors of the economy they can play in, where and how.”

He assured foreign nationals that the country was not about to “wake up” and have a massive deportation of Zimbabweans, Mozambicans and Lesotho nationals.

However, Lamola said that there was a need to put in place legislation to in order to strike a clear balance that will help the government to grow the economy for the benefit of everyone, but still enable it to set aside some sectors that need regulation, and for it to be clearly stipulated that these are for local citizens.

Gauteng Premier David Makhura, at the time of advocating for relaxations to lockdown, warned of massive job losses in the province due to the Covid-19 pandemic, warning the economic impact would be more than at first anticipated and have a ripple effect across the whole economy.

Meanwhile, a march held in Pretoria this week against foreign nationals – targeting specifically Nigerians and Zimbabweans – has been condemned by the Centre for Human Rights at the University of Pretoria.

The march organisers protested about illegal migrants and drug trafficking, but the centre’s Professor Frans Viljoen said this kind of march underlined the need for government to cultivate social cohesion between South Africans and foreign nationals.

“It is evidently wrong to target people from particular countries or label them as criminals, drug dealers or persons responsible for the social ills in the country,” he said.

“Such rhetoric only seeks to reinforce xenophobic and populist narratives, from which South Africa strongly distances itself, both constitutionally and in the 2019 National Action Plan to Combat Racism, Racial Discrimination, Xenophobia and Related Intolerances.”

Gauteng is currently home to the highest number of foreigners in the country.

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