In the Legislature today, Western Cape Minister of Economic Opportunities, Alan Winde, responded to a question about the volume of cases received by the Red Tape Reduction Unit. MEC Winde provided a status report on the unit, which included the latest case numbers and the most common red tape-related concerns. The unit has received over 3 000 cases with an increasing number of queries from businesses in Mitchells Plain and Khayelitsha.
Kindly see Minister Winde’s full reply below:
One of the key deterrents to economic growth and jobs in this country is unnecessary red tape. According to the World Economic Forum’s Global Competiveness Forum, inefficient government bureaucracy and policy instability are amongst the most problematic factors for doing business in South Africa.
Overall, since President Zuma took office our global competitiveness has declined from 50 in 2010 to 56 in 2014. Out of 144 countries, we rank 120th for the burden of government regulations on business and 90th for the amount of time it takes to start a business. Unnecessary legislation has a high economic cost for the country.
In the case of the new visa regulations, an independent study found that the economic cost of the new laws to South Africa could run as high as R10 billion, and place 21000 jobs on the line.
We have repeatedly raised our concerns around these regulations and last year I petitioned Parliament to postpone the implementation of these laws. Yesterday, Minister Malusi Gigaba took an important step in the right direction when he announced that he was considering extending the ten-year multiple-entry visa for businesspeople to other markets outside BRICS. And I would like to see this visa being extended to business travellers from Africa and other strategic regions.
Here in the Western Cape, our Red Tape Reduction Unit has been working to streamline the visa applications of investors to ensure they can do business in the Western Cape. The unit is analysing and comparing our visa regulations to that of our BRICS partners as well as our key trading partners in Africa, such as Angola.
Since its launch in 2011, the unit has received 3 733 cases, achieving a resolution rate of over 90%. There are currently 58 unresolved cases where the unit is awaiting feedback from the relevant government official, mainly at a national level.
Over the past three months, the most cases came from residents in Bellville, Mitchells Plain and Khayelitsha.
There are 11 categories of concern, namely:
Building plans and certification
Health and environment
Land use management
Permits and licences
Tenders and procurement
Between January and March, we received the most cases in Tenders and Procurement, with 125 cases; Business Support with 109 cases and Business Registration with 48. The unit works to speed up business registrations so companies are able to start trading quicker.
Through their efforts, they are helping small businesses to obtain the approvals they need to access tenders and employ more people. The Red Tape team have saved hundreds of jobs in the Western Cape through their interventions.
In one case, the team saved 85 local jobs when it facilitated permanent residency for an overseas businessperson who would otherwise have shut down his business. If we want to remain a globally competitive destination, we have to cut red tape.
The Red Tape Reduction Unit is sending a clear message that we are doing our best to create the right environment to do business. I have been calling on national government to establish its own red tape reduction programme and I was encouraged by the National Department of Small Business’ decision to do just that earlier this year.
Going one step further, I reiterate my appeal to the national government to conduct Regulatory Impact Assessments to assess the cost of all proposed legislation. We need to make our laws work for us, laws that make economic sense. That’s how we are going to create an investor-friendly environment. But the only way we can we can achieve that goal is through consistency, clarity and certainty.
For media queries, kindly contact:
Spokesperson: Alan Winde, MEC of Economic Opportunities
Tel: 021 483 3550
Cell: 060 970 4301