What You Need to Know about Business Red-Tape in SA

2 weeks ago

Red tape. We’ve all heard of it, and probably been affected by it. It holds back individuals, businesses, entrepreneurs, frustrating and constraining our ability to help each other.

In South African government, red tape takes the form of regulations, rules and procedures that are needlessly complex, creating unnecessary road blocks to progress. This results in undesirable consequences on business, the economy and individuals.

There are three main types of red tape in any given problem:

  • Inefficient procedures as a result of administrative management
  • Inefficiencies in communication and information exchange
  • Rules that have unintended consequences, or fail to properly address problems

In the case of South African businesses in particular, red tape can prove disastrous – simply registering a new business take a period of over a month, an eternity to a new entrepreneur.

Aside from the difficulties in opening a new business, red tape also affects existing businesses, and can disrupt operations. This can have negative consequences for the business concerned, including potential loss of revenue.

Cutting the tape

Tackling and reducing red tape in South Africa requires action on two fronts:

  • In order to eliminate the problem, it is necessary for government to reform and adjust legislation
  • In the short term, strategy that can be used locally to combat red tape are needed

For instance, in the long term, it would be useful to amend the regulations regarding opening a business, making it easier and faster for entrepreneurs to do so.

In the short term however, it is necessary for municipal administrators to take a view to improve these processes internally as much as possible.

The solution to red tape in South Africa is not an easy one – we are inundated with it. But in order for local entrepreneurs to flourish, and contribute to the local economy, it is an absolute necessity.

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