1. State Regulation of Business Activity

• 1.1 Policy Background
• 1.2 State Monopolies
  • 1.2.1 Botswana
  • 1.2.2 Malawi
  • 1.2.3 Namibia
  • 1.2.4 South Africa
  • 1.2.5 Tanzania
  • 1.2.6 Zambia
  • 1.2.7 Zimbabwe
• 1.3 Framework of Business Registration
• 1.4 Licensing system
  • 1.4.1 Types of licences required
  • 1.4.2 Licence application procedures
  • 1.4.3 Criteria applied in issue of licences
  • 1.4.4 Cost of licences
  • 1.4.5 Transfer and withdrawal of licences
  • 1.4.6 Any special regulations regarding foreign ownership
  • 1.4.7 Occupational health and safety laws

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1. State Regulation of Business Activity

This section reveals the greatest differences between the regulatory systems of the countries surveyed.

1.1 Policy Background

All countries currently have broadly similar economic policies, which emphasise the role of the private sector in driving economic development. In all countries, emphasis is placed upon encouraging the development of SMMEs. In Malawi and Namibia, the right to engage in economic activity has been given constitutional protection.

Since Independence in 1966, Botswana has had a mixed economy, in which government-owned parastatal enterprises play a significant role. Very recently (in 1998), the government produced its first SMME policy paper, based largely upon the recommendations of a specially appointed Task Force with majority representation from the private sector. Legislation to implement this policy has yet to be introduced.

From the late 1980’s onwards, the Government of Malawi has attempted to liberalise the economy. Prior to that period, the Government was an active player in the economy, and many laws have been repealed in order to create a conducive environment in which the private sector can drive the economy. Section 29 of the Constitution of Malawi provides that „Every person shall have the right freely to engage in economic activity, to work and to pursue a livelihood anywhere in Malawi.’’

In Namibia, Article 21 of the Constitution enshrines the right to occupation, trade and business as part of the constitutionally guaranteed fundamental rights and freedoms. Article 21 of the Constitution grants this right to "all persons", not distinguishing between Namibians and non-Namibians. In other instances the Constitution refers to "all citizens".

South Africa operates in a traditionally free market economy, although it is characterised by a domination of the economy by a

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limited number of large organisations. Recent surveys have suggested, for example, that one company alone ultimately holds the shares of almost two thirds of South African shareholding on the Johannesburg Stock Exchange. The present government, while recognising a need to adhere to free market principles of minimal intervention, is concerned that these large organisations have limited capacity to contribute all that is needed for the growth of the economy, and has a stated aim to promote small businesses. This is also in line with the government's policy of redressing imbalances of the past and promoting opportunities for entrepreneurs. Evidence of the policy position of the government is to be seen in legislation such as the National Small Business Act, 1996. This Act provided for the establishment of the National Small Business Council and the Ntsika Enterprise Promotion Agency, both designed to promote the interests of small business in South Africa. The position of government has also been set out in the White Paper on the National Strategy for the Development and Promotion of Small Business of 1995.

The Ntsika Enterprise Promotion Agency is currently conducting a comprehensive review of the legislative environment affecting small business in South Africa. The study is examining areas from the perspective of company issues, tax issues, access to finance and the like.

In Tanzania, the economy is being slowly liberalised following a period of 30 years when the economy was centrally controlled by the government. During this period, the only economic activity, which was left to the individual, was farming and whatever was harvested was sold to cooperatives at controlled prices.

Zambia became a Third Republic in 1991 following the holding of multiparty elections, which saw the end of Dr Kaunda's UNIP one party rule. During UNIP's rule from independence to 1991, the Government felt that it was important not only to have complete political power but also to have complete control of the economy. In that way, it was perceived that Zambia would be master in its own house. The Government accordingly followed a form of African socialism known as "Humanism". In pursuance of the

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principles of this doctrine, the Government nationalised much of the economy ranging from giant companies in the mining sector to small businesses such as dry-cleaning and driving schools. Over the years, the UNIP Government consolidated its hold on the economy by becoming involved in virtually all business activities including retail trading through various parastatal companies. The country's economy was truly state-dominated. However, the nationalised businesses soon lost vigour and enterprise and had to be heavily subsidised by the Government to keep them going. Rigorous prices and exchange controls also militated against private enterprise.

The change of Government in 1991 brought with it a change in economic policies. The new Government believes that it is not the business of government to run business. Deliberate efforts have therefore been made to break up state monopolies in virtually all sectors of the economy, and to set the stage for private initiative in the running of business with the facilitation of Government.

1.2 State Monopolies

In most countries, attempts have been made to reduce the role played by state monopolies. Malawi, Namibia, Tanzania and Zambia have gone the furthest in this respect. In Botswana and Zimbabwe, the process of privatisation has not yet really begun.

1.2.1 Botswana

Since Independence, the government has been firmly committed to the concept of a mixed economy, in which certain key public services are provided by the state through parastatal corporations. In recent years, the government has encouraged public debate about privatisation, and approximately 12 months ago, a Task Force recommended the introduction of a privatisation policy. However, it remains unclear whether or when government will commit itself to implementation of such a policy.

There are at present a comparatively large number of parastatals in Botswana, some of which have responsibility for commercial

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operations such as:

• Broadcasting (Radio Botswana is a parastatal, but other broadcasters have recently been permitted to tender for licences);
• Printing (the Government Printers is a parastatal but private printers also operate)
• Air carriage (Air Botswana is a parastatal which competes with other aircarriers);
• Water supply (Water Utilities is a parastatal which has a virtual monopoly);
• Power supply (Power Corporation is a parastatal which competes with other suppliers of energy);
• Certain financial services are provided by the Botswana Savings Bank and the Botswana Building Society, which compete with private sector financial institutions;
• Post (Postal Services is technically a government agency rather than a parastatal and competes with private transporters of goods);
• Telecommunications (Botswana Telecom is a parastatal with certain monopoly rights);
• Railway (Botswana Railways is technically a government agency rather than a parastatal and competes with private road haulage carriers); and
• Development (BDC is parastatal but it does not enjoy a monopoly).

1.2.2 Malawi

In Malawi, until quite recently, the government actively participated in many commercial activities through parastatal enterprises that directly competed with the private sector. Examples of such parastatals include the Smallholder Coffee Authority, the Smallholder Sugar Authority, the Kasungu Flue Cured Tobacco Authority, the Malawi Dairy Industries, and the Cold Storage Company. However, in 1996, as part of an economic liberalisation policy, the Public Enterprises (Privatisation) Act (No. 7 of 1996) was enacted in order to promote increased

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efficiency in the economy, and to encourage citizen participation in business activities. The Act established the Privatisation Commission as a statutory body to plan, manage, and implement the privatisation of public enterprises in Malawi. The exercise is reported to be fairly well advanced, and the „very few" state monopolies which remain are „in line to be privatised".

1.2.3 Namibia

In post-independent Namibia, many state monopolies have been abolished. Article 98 of the Namibian Constitution states:

„(1) The economic order of Namibia shall be based on the principles of a mixed economy with the objective of securing growth, prosperity and life of human dignity for all Namibians."

Article 100 of the Constitution requires the "Sovereign Ownership of Natural Resources", and gives the state monopoly rights over:

• the issuing of wood cutting concessions;
• the issuing of fish harvesting concessions;
• the issuing of mining concessions; and
• national security and defence.

The parastatals which remain have responsibility for the following activities:

• Broadcasting (NBC is a parastatal, but there are also other broadcasters such as Reho TV and Radio 99);
• Air carriage (Air Namibia is a parastatal which competes with other aircarriers);
• Water supply (Namwater is a parastatal which competes with other water suppliers);
• Power supply (Nampower is a parastatal which competes with other suppliers of energy);
• Post (Nampost is a parastatal but there are private transporters of goods);
• Telecommunications (Telecom is a parastatal but other providers are in theory permitted; however, Telecom contributed greatly to the infrastructural development and is

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hostile to 'newcomers');

• Railway (Transnamib is a parastatal); and
• Development (NDC is parastatal but there are many other national and foreign development agencies).

1.2.4 South Africa

The government is committed to the principles of a free market economy, and state monopolies exist only in certain industries, such as postal communications and rail transport. There are also parastatal bodies such as Telkom and Eskom, which are being commercialised if not privatised.

1.2.5 Tanzania

The only business activities at present reserved exclusively for the state are:

• The manufacture, marketing and distribution of armaments and explosives of all types
• The provision of public water for domestic and industrial purposes
• The building and operation of all railways.

Special licences may also be granted on the advice of the Tanzania Investment Centre.

1.2.6 Zambia

From 1970 onwards, the government of President Kaunda assumed control over a large part of the economy. Parastatal companies were established to control many commercial and industrial sectors, and in agriculture, statutory boards and corporations were created, often with monopoly powers. The activities which only government was permitted to undertake included integrated the manufacture of iron and steel, fertilisers, arms and ammunition; utilities such as public air transport, railways, power, water, and telecommunications; the operation of wholesale outlets for building materials; development financing and banking. The state also enjoyed, through its parastatal companies, a monopoly in

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many areas of commerce and industry. In the financial sector, the Zambia National Building Society and the Zambia State Insurance Corporation Limited were not permitted to face any competition from the private sector. The State Lotteries Board and the Zambia National Provident Fund Board were the only bodies in Zambia entrusted with the business of conducting a national lottery and providing some form of social security to employees when they retired. In the industrial sector, companies such as Zambia Sugar Company Limited, Chilanga Cement Limited, Nitrogen Chemicals of Zambia Limited, Refined Oil Products Limited, Premium Oils Industries Limited, to mention a few, enjoyed monopoly in their respective business undertakings. The communications sector was monopolised by the Posts and Telecommunications Limited, Zambia Airways Corporation Limited and Zambia Railways Limited. The mining sector was dominated by the Zambia Consolidated Coppermines Limited, which had a monopoly in the mining of copper, cobalt and other minerals apart from emeralds and other precious and semi precious stones. Maamba Collieries Limited enjoyed a monopoly in the excavation and sale of coal.

The change of Government in 1991 brought with it a change in economic policies. The new Government believes that it is not the business of government to run business. Deliberate efforts have therefore been made to break up state monopolies in virtually all sectors of the economy, and to set the stage for private initiative in the running of business with the facilitation of Government. The Competition and Fair Trading Act was introduced in 1994 to encourage competition in the economy by prohibiting anti-competitive trade practices. The Act seeks to prevent monopolies and the concentration of economic power as well as to protect consumers. The Zambia Competition Commission has been established under the Act to monitor and control and prohibit anti-competitive behaviour and unfair trade practices.

1.2.7 Zimbabwe

State monopolies in Zimbabwe include activities, which in other countries are firmly in the private sector such as fuel procurement and the export/import of maize and wheat. Other state monopolies

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include:

• generation and transmission of electricity
• dam construction and distribution of water
• postal services
• telecommunications
• railways
• the provision of public roads, and
• the procurement of armaments

1.3 Framework of Business Registration

All countries surveyed have a broadly similar business registration framework:

• Persons who trade under a name which is different from their own true names are required to register a ‘business name’ (see below at 4.4);
• Persons who wish to take advantage of incorporation and limited liability must register a company (see below at 5);
• Persons who conduct certain types of business are required to obtain a licence. However, licensing laws within the various countries differ very greatly (see below at 1.5); and
• A business should be registered with the revenue or income tax office. A typical requirement of such registration is that the business owner should keep a ‘proper record’ of all business transactions, so that an accurate income tax return can be submitted each year. In Botswana, for example, the Income Tax Act [Cap 52:01] states that a ‘proper record’ should reflect the true and full nature of the transactions of the business, taking into account the nature of the activities concerned and the scale on which they are carried on. This means that smaller businesses may keep less formal records than larger businesses.

1.4 Licensing system

The licensing rules showed the greatest variation of any issue

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studied in the report. South Africa and Zimbabwe have reformed their licensing laws and virtually abolished business licensing except for a limited number of business occupations (such as selling alcoholic liquor and business occupations affecting public safety). In other countries such as Botswana, Swaziland and Tanzania, the licensing laws have changed little in over thirty years, and licenses are still required to conduct a very wide range of business activities.

In all countries, the penalties for carrying on a business without a licence appear to be similar: the unlicensed business owner may be fined, and his/her stock or equipment is liable to be confiscated.

1.4.1 Types of licences required

1.4.1.1 Botswana

The main pieces of legislation governing business licensing in Botswana are the Trade and Liquor Act [Cap. 43:02, amended by Act No 15 of 1993], the Industrial Development Act of 1988, and the Mines and Minerals Act of 1976. However, many other statutes also provide that certain specified business activities may only be conducted by licensed operators including activities as diverse as diamond cutting [Cap. 66:04], the provision of security guards [Cap. 21:07], the provision of road transport services [Cap. 69:03], and ‘tourism enterprises’ such as travel agents [No. 22 of 1992]. Certain professions such as attorneys and public accountants may not be conducted without a practising certificate obtained from the appropriate authority.

In terms of the Trade and Liquor Act, a licence to conduct specified business operations must be obtained from either the national or local licensing authority. The Act is extremely wide, and effectively requires that any type of retail activity must have a licence. Aspects of the licensing regime were strongly criticised by the recent SMME Task Force, which recommended a radical reform of the rules, and the introduction of a system of ‘negative licensing’ for citizen-owned businesses. Government has responded to this criticism by proposing that the rules will be relaxed for certain categories of hawkers and vendors, pending a

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further review of the Trade and Liquor Act.

A licence is needed from the National Licensing Authority for the following types of business:

• Agent
• External Representative
• Auctioneer
• Driller
• Exporter-Importer

Licences for other business activities are issued by the Local Licensing Authorities:

• Dry Cleaner and Laundromat
• Petrol Filling Station
• Fresh Produce
• Pharmacy
• Garage and Workshop
• Restaurant/Takeaway
• General Dealer
• Specialised Dealer
• Hairdresser
• Supermarket
• Motor Dealer
• Hawker
• Street Vendor
• Club Liquor
• Bottle Store Liquor
• Bar Liquor
• Restaurant Liquor
• Temporary Liquor
• Special Liquor
• Hotel Liquor

Licences to carry on some of these activities can only be issued to citizens of Botswana, or to companies wholly-owned by citizens of Botswana (see 1.6, below).

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In terms of the Industrial Development Act, any manufacturing business is required to obtain an Industrial Licence if it:

• Employs ten or more persons at any given moment anywhere in Botswana, including managers, directors, sales and clerical staff; or
• Uses 20 kW or more of any form of energy; or
• Is carried on by a non-citizen, either individually or with others (regardless of the number of employees or power usage).

Mining activities are governed by the Mines and Minerals Act [Cap. 66:01] which states that all rights of ownership in minerals are vested in the Republic of Botswana. The Act permits companies to apply for three main types of mining concession: a reconnaissance permit, a prospecting licence and a mining lease. A reconnaissance permit or prospecting permit will only be granted to companies that have established a domicile (for service of legal summons and execution) in Botswana. A mining lease will only be granted to companies incorporated in Botswana.

1.4.1.2 Malawi

The licensing system in Malawi appears to be in effect a business registration system. Although the rules require that virtually every type of business must obtain a licence, there are few formalities to be complied with. The Businesses Licensing Act (Cap.46:01) provides that no person (whether an individual, or a company) may sell any goods by way of business or carry on a business without registering and securing a licence. The term „business’’ is defined to include any trade, industry or occupation and „sale’’ includes exchange, barter, or offering or exposing for sale. The licensing authority for the purpose of the Act is the District Commissioner’s office, which issues the licence upon being satisfied that the form has been properly completed.

The Industrial Licensing Act (Cap.51:01) requires every person manufacturing a product specified in the Schedule to the Act to be in possession of an industrial licence. The Schedule lists the following products:

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• Fire arms, ammunition and chemical and biological weapons
• Explosives
• Hazardous waste
• Products, the manufacture of which includes the use of radio - active material.

Since the Act was passed, no one has applied for a licence because there are no enterprises in Malawi, which manufacture the listed products.

1.4.1.3 Namibia

The Trades and Occupational Repeal Act, 10 of 1995, abolished the general need for all enterprises to obtain a licence. Some business activities still require licences (although this is under review). The following list is not complete:

• Hawkers
• Transporters
• Woodcarvers, Firewood traders, wood processors: The permissions to harvest, transport and export (if applicable) are to be obtained from the Director of Forestry.
• Home occupations: The simplified procedures enforced by the City of Windhoek for home occupations are now also recognised in most other local authorities. Home occupations are businesses carried out from home such as General offices, professional practices, small scale home industries and occupations, agencies which carry no stock other than samples, and others as determined by the City Council operating from a living premises, are subject to registration procedures. Most important features:
  • a) the number of employees is restricted to two;
  • b) the floor area used for the business shall not exceed 25% of the total area of living;
  • c) the neighbours are requested to hand in to the Municipality a letter of consent.

• Mining operations, and
• Liquor traders

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1.4.1.4 South Africa

The business activities which require a licence are defined in Schedule 1 to the Businesses Act, 1991:

• Sale or supply of meals or perishable foodstuffs;
• Provision of certain types of health facilities or entertainment (such as providing Turkish baths, saunas or other health baths; and providing massage or infra-red treatment);
• Provision of the services of an escort, whether male or female, to any other person;
• Keeping three or more mechanical, electronic or electrical contrivances, instruments, apparatus or devices which are designed or used for the purpose of the playing of any game or for the purpose of recreation or amusement, and the operation of which involves the payment of any valuable consideration, either by the insertion of a coin, token coin or disc therein or in an appliance attached thereto or in any other manner; keeping three or more snooker or billiard tables; keeping or conducting a night club or discotheque; keeping or conducting a cinema or theatre; conducting adult premises referred to in section 24 of the Films and Publications Act, 1996; and
• Hawking in meals or perishable foodstuffs.

1.4.1.5 Swaziland

Trading licences are regulated by the Trading Licences Order No. 20/1975 as amended. A list of licences are stated in a Legal Notice which lists 77 business activities that require licences - some activities are subdivided into further sub-categories (for example, there are 34 sub-categories of „dealer’s license).

There are also other trading licences required by the various statutes that govern on specific businesses and professions such as medicine, engineering, law, accounting and auditing.

Also, in terms of the Liquor Licences Amendment Act of 1981, application for a liquor licence must be made to the Liquor Licensing Board for the following licences:

• Breweries Licence;

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• Bottle Store Liquor Licence;
• Unfortified Wine and Malt Liquor Licence;
• Restaurant Liquor Licence;
• Restricted Bottle Store Liquor Licence;
• Club Liquor Licence;
• Wholesale Liquor Licence;
• African Beer manufacturers Wholesale Liquor Licence;
• Canteen Liquor Licence;
• Temporary Liquor Licence;
• Employer's Liquor Licence; and
• Occasional Liquor Licence;

Also, the Road Transportation Act No. 37 of 1963 provides for the granting renewal and amendments of road transport permit for the conveyance of goods and passengers.

1.4.1.6 Tanzania

Any business conducted in Tanzania is required to obtain a licence, because of a „catch-all provision" in Schedule C (see below).

Schedule „A" licences are issued by the Ministry of Industry and Commerce:

1. Commission agent
2. Manufacturer’s representative
3. Estate agent
4. Broker
5. Travel agent
6. Shipping business
7. Shipping business
8. Commercial traveller
9. Clearing and forwarding
10. Insurance
11. Tourist hotel
12. Banking
13. Transportation of passengers or goods by air
14. Postal services
15. Transportation of passengers and goods by railway

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16. Telecommunication services
17. Cargo valuation
18. Harbours cargo handling
19. Electricity production and distribution
20. Bureau de change
21. Stevedoring or lighterage
22. Buying and selling motor vehicles local
23. Courier services and mail agent
24. Broadcasting & television
25. Ship chandlers
26. Refining crude oil
27. Urban water supply
28. Casino

SCHEDULE „B" licences are issued by the regional Trade Office:

1. Export
2. Import
3. Regional trading companies
4. Cooperative Societies
5. Wholesale
6. Building contractors
7. Specified profession
8. Manufacturing & selling
9. Printing & publishing newspapers & books
10. Spare parts
11. Hunting

SCHEDULE „C" licences are issued by the district licensing officer, town municipal or city council:

1. Insurance agent
2. Restaurants and ordinary hotels & guest house
3. Auctioneer
4. Itinerant trade
5. Any other business not shown in the schedules

1.4.1.7 Zambia

The following categories of business require licences:

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1. Trading and manufacturing. Under the Trades Licensing Act, Cap 393 of the laws of Zambia, the following licences may be issued:-
   1. a trading (wholesale) licence
   2. a trading (retail) licence
   3. a hawker's licence
   4. a peddler's licence
   5. a peddler's (restricted) licence
   6. a stall licence
   7. a restricted licence
   8. an agent's licence
   9. a manufacturing licence
2. Projects to be located and/or undertaken in National Parks and Game Management Areas. Under the National Parks and Wildlife Act, Cap 201, the following licences may be issued:-
   1. district game licence
   2. bird licence
   3. national game licence
   4. supplementary safari licence
   5. elephant licence
   6. safari licence
   7. special licence
   8. professional hunter's licence
   9. apprentice professional hunter's licence, and
   10. professional tour guide's licence.

   Applications for any of these licences are to be made to the Director of National Parks and Wildlife Services.

3. Fishing: under the Fisheries Act, Cap 200 of the laws of Zambia, the Minister responsible for fisheries may declare any area of water to be a prescribed area and may regulate the method of fishing in such area.
4. Air transport: the approval of the Ministry of Transport and Communications (Department of Civil Aviation) must be sought before such a business is established.
5. Tourism: under the Tourism Act, Cap 155 of the laws of

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   Zambia, nearly all tourist enterprises require approvals from the Zambia National Tourist Board.

6. Banking and financial services require the approval of the Bank of Zambia; and
7. Mining

This list suggests that many service business do not require a license in Zambia.

1.4.1.8 Zimbabwe

Anyone engaged in the business of supplying or selling of liquor should hold a liquor license. An agent’s license is required where the sale or letting for hire of any particular good is effected by an agent on behalf of a principal, whether it be in a shop, store, or other fixed place of business.

Trades or businesses for which such licenses are not required include letting for hire of:

• Books.
• Aircraft.
• Public service vehicles.
• Contract cars.
• Telex, telephone and private wire installations and apparatus let on hire by the PTC.
• The selling of produce on the land, on which it is grown, cultivated or produced by the grower.
• The selling at the factory by the manufacturer of goods manufactured at the factory, and
• Selling by means of vending machines.

1.4.2 Licence application procedures

It is difficult to generalise about this matter. Procedures vary greatly from country to country, and even different licences issued within the same country are often accompanied by vastly different procedures.

However, procedures for liquor licences appear to be generally

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uniform throughout the region. By way of example, the procedure of Swaziland is described in some detail (see below).

Complaints about delays in issuing licences appear to be loudest in Tanzania, where applications may remain unprocessed for two years or longer.

1.4.2.1 Botswana

Applications for the various Trade and Liquor Licences must be made on the correct form, which requires information about matters such as the applicant’s proposed source of funding, details of any premises to be used (including whether the premises have been inspected by the Health Inspector), etc. The procedure requires that the application must be advertised in the Government Gazette, and in a local newspaper. A frequent complaint by business owners is that they will not be granted a licence unless they have already signed a lease for the business premises (this procedure requires the tenant to commit himself to a lease before he knows whether the licence application will be successful).

Applications for Industrial Licences are considered by the National Industrial Licensing Authority (NILA). Following complaints, the Authority’s procedures were streamlined in 1992, in order to improve efficiency. The NILA Board now meets twice a month to consider applications, which are no longer advertised in the Gazette for objections to be made. Under this new procedure, the owner should know the result of his/her application within 14 days from submitting the forms. Under the new procedure, the Board no longer makes commercial judgements on applications. But the Board must be satisfied that planning, zoning and health regulations are being followed.

Applications should be made (in duplicate) on Form AIL (1), copies of which can be obtained from the Licensing and Protection Division of the Department of Industrial Affairs at the Ministry of Commerce and Industry. The application procedure requires that:

• The application must be made by a company locally registered with the Registrar of Companies
• The share certificates of the promoters should be submitted

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• There should be a Project Description, which outlines the product to be manufactured, and gives details of proposed marketing, financing, technical support and land/plant/ premises needed.

1.4.2.2 Namibia

Application procedures vary greatly. Complaints about delays and unnecessary bureaucracy in issuing transportation licences have led to a review of the presently applicable legislation. A decentralised licensing regime is proposed.

1.4.2.3 South Africa

General conditions associated with the licensing of businesses are contained in the Businesses Act, 1991. This contains provisions relating to the appointment of licensing authorities, the manner in which licences are granted and matters to be taken into account when granting licences (e.g. conditions relating to the premises upon which the business is to be run).

The costs and procedures of application, as well as the time periods involved, vary according to the different types of licence. For example, an application for a hawker's licence may be relatively straightforward, whereas an application for a liquor licence is a far more complex affair, requiring professional assistance.

1.4.2.4 Swaziland

Here again, costs and procedures vary according to the different types of licence. The consultant’s report described the procedure for obtaining a liquor licence in some detail. This is worth summarising because a similar procedure appears to be followed in all countries before this type of licence is issued:

1. An application for a liquor licence must be made to a liquor licensing board;
2. The application fees are as follows:

   Grant	E200.00 to E250.00
   Renewal	E100.00 to E150.00
   Transfer	E150.00 to E250.00

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   Removal

   E150.00 to E200.00

   A liquor licence has to be renewed every calendar year. The application fee is not refunded if the applicant is unsuccessful.

3. Once an application for a licence is granted, the Applicant is also required to pay an annual licence fee, which ranges between E200.00 to E300.00.
4. Any individual or individuals with sufficient interest may object in writing to an application for a liquor licence. The Objector is required to serve the Secretary to the Board and the applicant with his objection not later than ten (10) days prior to the date of hearing.
5. Legal representation is not required but is advisable. At the hearing the Applicant and the Objector are given an opportunity to present their cases and lead evidence in support.
6. At he hearing of an application, the Applicant must prove:
   (i) that there is a need for the proposed liquor outlet. He must satisfy the board that the proposed business will not unfairly compete with existing outlets.
   (ii) that he has sufficient knowledge of the applicable law regarding the sale, storage, consumption, or manufacturing of liquor as the case may be.
   (iii) that he is fit and proper to hold a liquor licence. The Applicant's age, character, social standing and criminal record become relevant in support of good character.
   (iv) that he has sufficient capital to operate the proposed business. The building plans, interior designs, specifications and availability of cash, loan and assets become relevant to prove this requirement.
   (v) The Applicant must be lawfully resident in Swaziland. If the Applicant is not a citizen, he must possess a valid residence permit to reside in Swaziland.
   (vi) The Applicant must satisfy the Board that the equipment, fixtures and fittings, and premises where he proposes to operate his business have been inspected by the Health Officers and are found suitable.
   (vii) The Applicant has to file a favourable police report.

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   (viii) The Applicant must satisfy the Board that the public is protected from harm by his trading in liquor. His customers have sufficient access to public transport to take them home after drinking liquor. There must be sufficient security on the premises to protect children under the age of 18 years from drinking or purchasing liquor. The public must also be protected from harassment and noise pollution caused by liquor drinkers.
   (ix) The Board will further require the Applicant to prove either ownership of the premises where he intends carrying on the proposed business or a right of possession (such as a current lease).
   (x) The Board will further consider whether there is an objection to the application. If there is an objection, it will be heard and a decision be made on it.

1.4.2.5 Tanzania

In practice, approximately 60% of businesses in Tanzania do not obtain the necessary licence because of the bureaucratic system for processing applications (most of these are informal sector businesses). An indication of the bureaucracy was provided in November 1998, when the Tanzania Investment Promotion Agency complained publicly that Hyundai had decided not to invest in Tanzania because its licence application remained unprocessed two years after it had been submitted.

The licensing procedure in Tanzania also requires the application forms to be sent to the Income Tax Authority for tax assessment (In Tanzania, the consultant reports that income tax must be paid in advance before starting a business).

1.4.2.6 Zambia

The licensing authorities under the Trades Licensing Act are local authorities (city councils, municipalities, township councils and district councils). A person who intends to apply to a licensing authority for a trading (wholesale) licence or a trading (retail) licence must give notice of such intention. The notice must be in a prescribed form and must be published in the government gazette

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and in two issues of a newspaper circulating in the district where it is intended to sell the goods under such licence at least fourteen days before the application. The licensing authorities may in certain cases exempt applicants from complying with this requirement where the applicants are already holders of the relevant licences.

When a notice of intention to apply for licence is published, any person who wishes to object to the issue of such a licence must within twenty one days from the last publication of the notice of intention give his objection in a prescribed from to the licensing authority and to the applicant named in the notice. Grounds of the objection must be stated clearly.

An application for a licence must be made in the prescribed form to the licensing authority for the area in which the applicant intends to carry on the activity to be licensed. The application must be accompanied by the prescribed fees. On receipt of the application, a licensing authority has power to take evidence on oath or affirmation, to summon any person to give evidence in respect of such application or to produce any book or plan relating thereto. It can also make any investigation as may be necessary.

1.4.2.7 Zimbabwe

The license application procedure is that:

1. The applicant should publish in a newspaper circulating in the licensing area of the licensing authority to which application will be made of his intention.
2. First publication should not be more than 42 days or less than 28 days before the date of meeting at which the application is to be heard. Second publication shall not be less than 7 days or more than 14 days after the first publication.
3. Within 7 days of the last publication, the applicant is supposed to lodge with the Licensing authority, an application for a new license. If this is not done, then the notice is withdrawn and the applicant needs to start afresh.
4. The application should be accompanied by:
   • A fee, documents, plans, and specifications, as may

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     be prescribed.

   • Proof that the provision of any other enactment relating to the trade or business for which the license is required has been complied with.

1.4.3 Criteria applied in issue of licences

The licensing laws of the countries surveyed usually do not specify the criteria, which the licensing authority should apply in deciding whether to issue a licence. However, the rules normally indicate the grounds on which a licence may be refused.

For example, in Botswana, the Trade and Liquor Act provides that a licence should not be issued where:

• the applicant is a minor (under 21), an unrehabilitated insolvent, or has been convicted of an offence involving dishonesty within the previous two years; or
• the issue of a licence would conflict with planning regulations or any health or other regulations

Similarly, in Zambia, a licensing authority may refuse to issue a licence if it is satisfied that:-

1. the applicant is under the age of eighteen years
2. the issue of such licence is likely to cause a nuisance or annoyance to person residing, or occupying premises, in the neighbourhood of the premises in respect of which the licence is sought;
3. the premises on which the applicant intends to conduct his business would not conform to the requirements of any law for the time being in force; or
4. the issue of the licence would conflict with any approved or proposed town planning scheme or zoning area; or
5. the issue of such licence would operate against the public interest.

The licensing authority is obliged to give reasons for the refusal of any application for a licence.

In addition to the above grounds for refusal of a licence, a

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licensing authority shall refuse to issue a licence to any person who:

1. is an undischarged bankrupt or has entered into a composition or a scheme of arrangement with his creditors which is still binding;
2. has, within a period of five years immediately preceding the date of application, been convicted of an offence against the Bankruptcy Act; or
3. has, within a period of five years immediately proceedings the date of the application, been disqualified from holding a licence by order of a court.

1.4.4 Cost of licences

In those countries, which have more extensive licensing regimes, the cost of the different types of licence varies considerably. For example, in Botswana the cost of licences under the Trade and liquor Act varies from P10 to P200. In Tanzania there is a similarly wide range of fees.

In Zimbabwe, where few occupations require licences, the fee for obtaining a licence to operate a vending machine varies according to the location of the business - the fee in an urban area is $100, and in an rural area - $50.

The entrepreneur’s costs increase where professional assistance is required to obtain a licence. Again, there is no general pattern discernible. Some licensing procedures such as hawking and vending licences are uniformly straightforward, whilst others (for example, those associated with the sale of liquor) are more technical and may require professional advice or representation.

1.4.5 Transfer and withdrawal of licences

Rules regarding these issues are fairly uniform. Licences typically expire at the end of the year in which they were issued and must therefore be renewed annually.

The general principle applied in most countries is that a licence is issued to a specific applicant and cannot therefore be transferred to

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another person without the consent of the licensing authority. An application for transfer of a licence is generally treated in the same way as an application for a new licence, although a temporary licence may be granted to allow the business to continue while the application is being considered.

In Malawi, where the issue of a licence under the Businesses Licensing Act is regarded as a formality requiring only the correct completion of an application form, rules on transfer are slightly more liberal, and permitted in circumstances such as:

1. in the case of the death of the licence holder, to the widow or widower or the legal personal representative of the deceased holder;
2. in the case of bankruptcy of the licence holder or assignment of the benefit of his creditors generally, to the lawfully appointed trustee or assignee;
3. in the case of a company in liquidation, to the lawfully appointed liquidator;
4. in any case where the licence holder becomes subject to any legal disability, to any person lawfully appointed to administer his affairs;
5. on sale of the business, provided the purchaser makes an application for the licence to be transferred to him/her.

Similar rules apply in Zambia, where licences issued under the Trades Licensing Act are generally not transferable. However, in the case of death of a licence holder, the Licensing Authority may on request by the widow or widower or legal personal representative transfer the licence to such widow, widower or legal representative. Also in the case of bankruptcy of a licence holder, the Licensing Authority may transfer the licence to the appointed trustee or assignee on request. Where the licence holder is a company, the licence may be transferred to the liquidator on request by the liquidator and in any case where a licence holder becomes subject to any legal disability, the licence may be transferred to any person lawfully appointed to administer his affairs if so requested by such person.

Rules regarding the withdrawal of licences are also fairly

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uniform. Typical provisions are those of:

• South Africa, which state that licences may be withdrawn under circumstances such as a failure to observe a condition imposed in the case of that particular condition, failure to adhere to requirements relating to the premises of the business, if the business does not comply with relevant health laws and if the licence holder does not produce his licence within 14 days of a written request to do so, and
• Zambia, where the Minister has power to revoke any licence issued under the Act if the licence holder obtained the licence by fraud or deliberate or negligent submission of false or misleading facts or statements or he contravenes the terms of the licence. In such circumstances, the licence holder is given notice by the Minister of his intention to revoke the licence and is given twenty-one days in which to show cause why the licence should not be revoked.

1.4.6 Any special regulations regarding foreign ownership

Most countries surveyed have liberal rules regarding foreign ownership, and have not designated any sectors or activities as being reserved only for citizens. However, Botswana, Tanzania and Zimbabwe are exceptions to this general rule.

Botswana has had a fairly elaborate ‘reserved activities’ policy since 1984. The following economic activities are reserved exclusively for citizens and companies which are wholly-owned by citizens:

• In terms of commercial activities: bars (except for those in hotels); hawker; street vendor; bottle store; butchery and fresh produce (including milk); chibuku bar; general trading; petrol filling station; simple speciality operations, e.g. clothing boutique, footwear; supermarkets, excluding chainstores and franchise operations; village type restaurant/takeaway including restaurant liquor; taxi service; security guard; and dairy produce.
• In terms of manufacturing activities: the baking of bread; the manufacture of burglar bars; the manufacture of school

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  uniforms; the manufacture of protective clothing; the milling of sorghum; the manufacture of school furniture; and the manufacture of cement and baked bricks.

• The following road and railway maintenance contracts are reserved for citizens and wholly-owned citizen companies: fencing; maintenance of roads; reserve and drainage; clearing bush; culvert construction; transport and plant hire; stock piling of materials; carting gravel and chippings; bridge painting; and road marking, fog spray and resurfacing bitumen roads (for this category, non citizen firms are only to be considered when citizen contractors have tendered unsuccessfully). In addition, the Central Tender Board should only consider applications from firms wholly owned by citizens for registration in certain categories of building contractor; maintenance and minor building works for government properties is reserved for citizen contractors; transportation of mail is also usually reserved for citizens.; and directives to central government, local authorities and parastatals require that tendering for furniture, uniforms, overalls and dust coats is restricted to local firms (which need not necessarily be citizen-owned).

In Tanzania, the following business activities are reserved for citizens:

• Retail or wholesale trade
• Product brokerage
• Business representation for foreign companies
• Operation of public relations business
• Operation of taxis
• Barber shops, hair dressing and beauty saloons
• Butcheries, and
• Ice-cream making and parlours.

In Zimbabwe, the following activities are reserved for citizens or joint ventures in which foreign shareholding is limited to 25% (which may be raised to 30% in certain cases):

• Certain forms of agricultural forestry

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• Road haulage
• Passenger bus, taxis and car hire service of any kind
• Tourist transportation (excluding airways)
• Retail / wholesale trade, including distribution of local and other locally produced goods
• Barber shops, hairdressing
• Commercial photography
• Employment agencies
• Estate agencies
• Valet services
• Armaments manufacture, marketing and distribution
• Public water provision for domestic and industrial purposes
• Railways operations
• Grain mill products
• Bakery products
• Sugar products
• Tobacco packaging and grading (post auction)
• Tobacco products

Foreign participation in service sector activities other than those listed above is generally limited to 70%.

1.4.7 Occupational health and safety laws

These laws were studied in outline, primarily in order to see whether small and micro enterprises are governed by the same rules as the very large enterprise. All countries covered in the survey have uniform occupational health and safety laws, which apply to businesses of all sizes, whether very large or very small. Exceptionally, in Namibia, a workplace with four or fewer persons is exempted from the registration requirements contained in the Factory Machinery and Building Work Ordinance.

In Botswana, the Factories Act [Cap. 44:01] is concerned with protecting the health, safety and welfare of persons working in places which fall within the definition of a „factory". To this end, the Act imposes fairly strict standards in relation to matters such as the construction and maintenance of premises and equipment, the

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fencing of dangerous machinery, the provision and wearing of protective clothing, and so on. These standards are supported by criminal sanctions and enforced by a factories inspectorate. The Act also requires that new factories be registered before they are occupied or used.

In Malawi, the recently introduced Occupational Safety, Health and Welfare Act (No. 21 of 1997) regulates the safety, health and welfare of persons at work, and provides for the inspection of certain plant and machinery. In Namibia, the principal health and safety laws are to be found in the Public Health Act and the General Health Regulations. Additionally local authorities may have their own health regulations. Any workplace with more than 4 persons must be registered in accordance with the Factory Machinery and Building Work Ordinance of 1952 at the Ministry of Labour. This office will provide with a certificate of registration.

In South Africa, all businesses are required to observe the provisions applicable to the industry within which they operate. Certain aspects of this are universal, such as meeting the requirements of the Occupational Health and Safety Act, 1993, the Basic Conditions of Employment Act, 1997 and the Labour Relations Act, 1995. Others are industry specific, such as bargaining council agreements. The latter can sometimes be disadvantageous to small businesses, as they may not be represented on such councils but are still required to observe the terms of agreement negotiated between labour and business on such councils.

In Tanzania, the occupational health and safety laws are currently being examined with a view to their reform.