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This review is the second stage of a comparative assessment of the business laws which affect small, micro and medium sized enterprises (SMMEs) in various SADC member states. The review is being undertaken on behalf of the Small Enterprise Promotion Advisory Council (SEPAC) Working Group on Policy Issues. Overall, the project is based on the premise that business laws have an important role to play in the development of a facilitative environment for SMME promotion. The fundamental aim of the project is to promote discussion of the most appropriate regulatory environment for SMME development in the various SADC member states.

The first stage of the project provided an overview of those areas of business law which have the greatest relevance to SMME development in eight countries: Botswana, Malawi, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. The first stage provided an overview of the following issues:

  • The framework of business registration (including business registration requirements, the licensing system, sectors reserved for citizens, occupational health and safety laws);
  • Investment incentives;
  • Public procurement regulations (such as tendering procedures); and
  • Legal forms of conducting a business (including partnership and company law, and the law of business names).

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Two broad conclusions emerged from the first stage of the review:

  1. That there are many similarities between the business laws of the countries surveyed; and
  2. That, overall, comparatively little has been done to develop business laws which are more appropriate for SMME development. In most countries, business laws still serve the needs of ‘big business’ rather than ‘small business’. Within the SADC region, there are comparatively few examples of laws specifically designed to facilitate SMME development. Many of the region’s business laws appear to have changed very little since colonial times.

The first stage of the review revealed that the most significant differences between the business laws of the countries surveyed are to be found in relation to licensing. Whereas South Africa and Zimbabwe have virtually abolished business licensing except for a limited number of business occupations (such as selling alcoholic liquor and business occupations affecting public safety), other countries such as Botswana, Swaziland and Tanzania have very extensive licensing regimes that also impact upon other issues such as zoning and the role of local government in business regulation. It was therefore decided that this second stage of the review of business laws should focus upon the policy issues that arise in relation to business licensing.

This review focuses upon licensing laws and policy in seven countries: Botswana, Mauritius, Namibia, South Africa, Tanzania, Zambia and Zimbabwe. The overall aim of the review is to promote discussion of the appropriate business licensing environment for SMME development in the region.

In order to complete this study, country consultants were invited to compile reports on the relevant business laws of their

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country. The services of these consultants were obtained with the assistance of member organisations of SEPAC, and of the relevant country offices of the Friedrich Ebert Foundation.

The consultants who contributed the country reports were as follows:

  • Botswana - Andrew Briscoe
  • Mauritius - Jairaz Pochun
  • Namibia - Peik Bruhns
  • South Africa - Septi Bukula
  • Tanzania - Bernard Msekwa
  • Zambia - Webby U. Mate and Naomy Kanyemba; and
  • Zimbabwe - John Saungweme

The study focuses upon five main areas: policy issues and licensing laws; licensing laws and the development of an informal sector; licensing laws and zoning regulations; the enforcement of licensing laws; and deregulation of licensing. Within each of these topics. the country reports present some specific issues in more detail:

  • In relation to policy issues and licensing laws, each country report considers recent changes in policy, and the policy rationale for requiring some businesses to be licensed but not others;
  • In considering the relationship between licensing laws and the development of an informal sector, each country report summarises the findings of recent studies of the informal sector; explains which licensing laws are most commonly infringed by informal sector businesses, and identifies the main compliance costs/issues which arise when an informal business graduates to become a registered or formal business. The country consultants were also asked to consider particular issues that arise in relation to unlicensed street traders, and unlicensed liquor bars (‘shabeens’);

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  • In discussing the relationship between licensing laws and zoning regulations, the country consultants were asked to have particular regard to the use of residential premises for business purposes. Each country report also examines the relationship between zoning laws and licensing laws, and considers the practical problems (if any) which have arisen in relation to the enforcement of zoning laws;
  • In relation to the enforcement of licensing laws, country reports describe the agencies that are responsible for enforcement of the various licensing laws, and the powers which these agencies have in order to enforce licensing laws. Each country consultant was also asked to consider what practical problems (if any) arise in relation to the enforcement of licensing laws;.
  • With regard to deregulation, country consultants were requested, in the light of national experience, to identify the public policy issues/problems that arise when a licensing system is dismantled. The effects of deregulation upon the establishment of new businesses, the growth of existing businesses, and competition between businesses are also examined. Finally, each country study reports on the interests that have been affected by deregulation, including both business and public interests.

© Friedrich Ebert Stiftung | technical support | net edition fes-library | November 2000

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