Rigid Labour Laws And Small Business Red Tape To Be Reviewed
In January we wrote that government was considering having a look at the country’s labour laws, in order to try and make the country more competitive with cheap manufacturers like China and so prevent China from almost demolishing other industries of ours besides the clothing and textile sector. Since then we haven’t heard much about it and with the government having successfully negotiated with China to curb textile imports into SA it looked like it might be on the back burner.
However two new reports released this week have highlighted the fact that SA is still not the easiest place in the world to do business. Despite being the only African country in the top 30 of the World Bank ‘Doing Business 2007’ report, SA slipped a place to 29th since last year. While SA’s rigid labour laws had good intentions, namely to protect vulnerable workers who under the Apartheid government were ritually abused, the consequences have meant that employers are now hesitant to hire new workers out of fear that they may never be able to get rid of them.
The report also noted that the red tape and regulations for small business are quiet onerous. SMME has long been seen as the true engine of economic growth in SA, and any limit on the growth of of small business can have negative consequences for the economy.
The report by the world bank also listed African countries that have made progress in making it easier for it’s citizens to create and operate businesses. South Africa was not mentioned.