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Although SADC (unlike other regional communities such as the European Union or the West African Economic and Monetary Union) has not yet undertaken a programme of business law harmonisation, this study suggests that in many areas of business law affecting SMMEs, there are few significant differences between the regulations of the countries surveyed. The company laws of the countries surveyed, particularly those, which apply to private and public companies, bear a striking similarity to each other, as do the laws regarding the use of business names.
In terms of laws that facilitate or promote SMME development, the study suggests that:
- Malawi, Namibia, Tanzania and Zambia have made most progress in creating business opportunities by removing state monopolies, whereas Botswana and Zimbabwe have yet to undertake any significant privatisation of state-owned enterprises (see 1.2 above);
- South Africa and Zimbabwe have radically 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 (see 1.4);
- All countries provide investment incentives, which are generally available to both domestic and foreign investors. Most of these incentives appear to have been designed primarily with a view to attract foreign investment, and are thus of marginal value to the small or micro enterprise. However, a clear exception to this general rule is provided by the small-scale Financial Assistance Policy available in Botswana, which is specifically targeted at small-scale manufacturers, and the incentives developed in South Africa by the Small Business Development Corporation (see 2.);
- In Malawi, Tanzania, Zambia and Zimbabwe, public
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procurement is based upon the application of objective competitive factors such as price and quality, which tend to favour the larger enterprise that can benefit from economies of scale. However, in Botswana, Namibia and South Africa, procedures have been introduced to favour certain categories of small and/or local business in the tendering process (see 3.1);
- Government payments system are generally regarded as efficient in the surveyed countries, except in Botswana, Zambia and Zimbabwe (see 3.2); and
- Only three countries - Namibia, South Africa and Zimbabwe - have developed a more modern corporate vehicle, which is especially suited to meet the needs of the small business (see 5.).
The most significant differences between the business laws of the surveyed countries are to be found in relation to licensing (see 1.4). It is therefore proposed that the second part of this study will focus upon the policy issues that underlie this issue. Amongst others, the study will seek answers to the following questions:
- What is the relationship between licensing laws and the development of an informal sector?
- What is the relationship between licensing laws and zoning regulations?
- What is the rationale for requiring some businesses to be licensed but not others?
- What issues arise in relation to the enforcement of licensing laws by local authorities and other agencies?
- What policy issues arise when licensing systems are dismantled?
© Friedrich Ebert Stiftung
| technical support | net edition
fes-library | November 2000